Hilton Group Plc May Start 2nd Hotel Brand

LONDON— According to a report in The Guardian newspaper, Hilton Group, formerly Ladbrokes, is said to be interested in starting a second hotel brand to reflect its ambitions to expand further into the three-star market and to possibly franchise the business. Hilton, headed by CEO David Michels, is seeking to license a brand from its U.S. marketing partner and sister company Hilton Hotels Corp., signifying a growing closeness between the two hotel empires. Hilton Group is understood to be keen to favour HHCs DoubleTree label for a second-tier brand. It is an unprecedented move for the hotels group, which has made it corporate policy to only use the Hilton name for all its 230 properties. The switch in strategy follows the hotel companys pounds 612m acquisition of mainly three-star Scandic hotels earlier this year. Michels said that in the event of acquiring another three- to four-star hotels company, the group would need another name for the second tier business. “If and when we buy another Scandic we will be left with a split of two hotels brands. Then we would be likely to import a brand from our American sister company, such as Embassy, DoubleTree or Hilton Garden Inn”, said Michels. HIlton intends to spend six to 12 months bedding down Scandic, but has sufficient financial power buy another company in this consolidating sector at any time, said the paper. In a related move, the company is also likly to use the DoubleTree name to start a franchising operation in Latin America, leaning heavily on HHCs expertise in the area. The venture will be a test case to investigate the viability of running a franchising division overseas, said the report. Of the 154 Scandic hotels acquired, 14 were sold, 40 will become Hiltons and 100 will remain under the Scandic label for the time being. SOURCE: The Guardian