BEVERLY HILLS, CA- Hilton Hotels Corp. wants to manage more hotels and own fewer, and is prepared to buy back shares in order to boost its stock price, CEO Stephen Bollenbach said yesterday.
Hilton now earns about 70% of its income through owning hotels and 30% from management contracts, but Bollenbach would like to retool the equation to more like 50-50, according to a Reuters interview with the CEO.
That means Hilton would likely sell up to 50 of the 85 hotels it owns over the next decade.
Bollenbach also said Hilton expects to have “significant” free cash flow next year, and will likely use the money to pay down debt and buy back Hilton shares if they remain trading at or near their current levels. Hilton stock is now trading at about $11 a share.
In a bid to boost its luxury hotel group, Bollenbach said Hilton is in advanced talks with Hilton Group Plc to create more upscale Conrad brand of hotels. Hilton Hotels Corp. now has 9 Conrad properties worldwide, and Hilton Group Plc has none.
In the present, Bollenbach said Hiltons integration with the operations of Promus Hotel Corp., which it completed about three months ago, should save Hilton $65 million this year and $95 million to $100 million in 2001. (9/19/00)
Source: Reuters