S&P Global Market Intelligence caught up with Christopher Nassetta, president and CEO of Hilton Worldwide Holdings Inc., at the NYU International Hospitality Industry Investment Conference. During a news conference with the media and in a one-on-one interview afterward, Nassetta discussed the company's reluctance to launch an Airbnb-style home-sharing business, and Hilton's relationships with two Chinese companies that have invested in hotels.
On home-sharing …
Nassetta said Hilton has researched the home-sharing industry — in which Hilton's top competitor, Marriott International Inc., has launched a London-based pilot program — but has concluded that the business is too different from traditional hotels.
"It's not that the customers don't cross over. I think they do," Nassetta said. Even so, he added, home sharing involves customers accepting greater variation between rooms, and no services, in exchange for lower prices.
"That is not what we do, that is not what I want us doing, because I think there is a cognitive dissonance that occurs when you say to your customer, 'You're going to get X,' and you give them Y," he said.
He added: "I have not been convinced yet, in all the work that we've done — and it's considerable — that you can really, on that distributed a basis, do what we do well in that context and make money doing it. So at the moment, if I don't think we can do it well, or make money on it, it's not something I want to do."
The Waldorf Astoria hotel in New York City. |
On the status of the shuttered Waldorf Astoria New York hotel, on which Hilton holds a long-term lease from owner Anbang Insurance Group Co. Ltd., which was recently taken over by the Chinese government …
Nassetta said there is heavy, floor-by-floor demolition underway to get the property ready for renovation.
"I have met with [Anbang] very recently, and what they have strenuously suggested to me is, they have every intention to continue on with the plan and get the renovation done, and bring the Waldorf back to its prior glory," Nassetta said.
"Everything they're doing in terms of the demolition, the planning — which we've been working very closely with them on — suggests that to be the case. Time will tell."
He added that it will probably be three years before the renovations are complete. "But as far as what they've told us, their intentions are to move forward, and to move forward with it in the relative short term, in terms of rebuilding once the demolition work is done," he said.
On the sale of a 26.1% stake in Hilton by HNA Group Co. Ltd., a Chinese conglomerate that was under pressure from that country's government to pay down debt …
"The HNA position … was a serial topic of discussion in meetings with investors," Nassetta told S&P. "So it was great that we could figure out a way, with HNA, to help them accomplish something that they wanted to accomplish, which was liquidity, and we were able to do it in a reasonably neat way, in terms of going out and doing a marketed deal, which we bought a big chunk of, and clean it all up in one big trade."
On the fate of various synergies between Hilton and HNA's other travel businesses that both sides had envisioned
"We're working on those things. I will not deny that when we did it, we had much bigger plans for what we thought that overlap might be, in terms of, particularly, their airline business, but also their online business, their tour and travel business," Nassetta said. "We thought there would be a lot more synergy, and while we've been working with them on a number of things, it has not developed to the scale that we would have hoped."
The CEO said the two companies parted ways amicably. He said Hilton continues to work with HNA on "a host" of projects that he thinks have the potential to develop into bigger things.

