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Hilton CEO predicts more M&A, outlines 2016 optimism

Presidentand CEO Christopher Nassetta took a cool view of the planned merger between and on an April 27 conference call, but said there will likely be more M&A amonghotel operators.

Nassettaalso said 2016 results so far — including in April — have been encouraging in comparisonto 2015.

Askedabout the Marriott-Starwood transaction, Nassetta said that Hilton had not beeninvolved in the bidding war for Starwood, because Hilton was "very focusedon having purebred brands" that were leaders in their individual segments.

"Idon't want to get snarky about what our competitors are doing," he said. "Ithink the way to think about it is that we have chosen a path, proactively, whichis a different path than others, including them, have taken."

He added:"I think we'll continue to lead the industry, and I think what we're focusedon is making sure that every brand we have really resonates with customers and withowners and that we continue to drive that growth."

With1.1 million rooms in the company's system and its acquisition pipeline, "we'rebig enough, and we're in the game of quality at this size as opposed to quantity,"Nassetta said.

He predictedfurther consolidation among hotel operators, however.

"Therearen't tons of logical combinations, when you really dig into it, but my view is,you're at that stage of the cycle," Nassetta said. "I think people havefigured out that scale matters. There are some that have it, and some that don't."

He added:"I'm not going to, in any way, suggest anybody's scrambling around, becauseI don't see that. But I do think people are taking deep breaths and saying, 'Arethere things that we could do to try and get some of that scale?'"

Nassettasaid on the call that Hilton is maintaining its predictions of full-year 2016 RevPARgrowth in the range of 3% to 5%. Results in the fourth quarter of 2015 and in early2016 "were a bit lower than we would have hoped or expected," he said,adding that the world "froze up" amid concerns about China's economy,terrorism in Paris and Brussels and capital market volatility.

Lookingahead, "there are things going on in the world that aren't great," Nassettacontinued. "But relative to what we saw at the end of last year and the firstcouple of months of this year, there's a heck of a lot more stability."

In particular,he said, April "feels pretty darn good," with corporate bookings havingrebounded.