While Hilton clinched the lead in terms of value of top performing brands in a recent ranking, it is also playing catch up with Marriott in the luxury space.
According to Brand Finance’s latest hotel sector report released in May, the value of Hilton brands that made the top 50 ranking this year was at US$14.7 billion – over US$1 billion ahead of Marriott’s US$13.4 billion portfolio. Hilton achieved overall brand value growth of 41 per cent, while Marriott saw a 27 per cent decrease, making way for Hilton in the top spot. Hilton has six brands in the top 50, compared to Marriott’s 13.
Brand recognition and innovation are driving Hilton’s performance, Daniel Welk, the group’s vice president, luxury and lifestyle, Asia Pacific, told TTG Asia on the sidelines of ILTM Asia Pacific.
“We’re not saying we’re the biggest hotel company in the world, just the most recognisable and trusted throughout the globe. It’s rankings like this that allow us to hang our hat on (that claim),” said Welk.
“We’re (akin to a) 100-year-old start-up. Everyone at Hilton believes that innovation is in our DNA. Today we are leading digital technology by (pioneering a) mobile app that allows room selection, digital key (and more).”
The Hilton Hotels & Resort flagship, already the most valuable brand on the ranking, this year extended its lead over Marriott, after growing 17 per cent in value to US$7.4 billion. This was largely driven by strong revenue increase over the last year, according to Brand Finance.
Moreover, the independent brand-valuation company found the top three fastest growing brands all coming from Hilton’s portfolio, led by Homewood Suites (brand value up 99 per cent to US$800 million), followed by Double Tree (up 79 per cent to US$2.1 billion) and Hampton (up 78 per cent to US$3.2 billion).
On the other hand, Marriott is holding strong in luxury. Notably, the group’s only two brands in the top 10 growth ranking were both from the luxury category (W and Luxury Collection).
Travel agents polled at ILTM Asia Pacific said the giant’s luxury brands continue to score high on brand trust and recognition, despite Brand Finance partly attributing Marriott’s decline in brand value to a recent cyber security incident.
Buyer Vikram Kajaria of Makson Travels said: “Hilton’s Waldorf Astoria aside, Marriott’s luxury brands such as the Ritz-Carlton and St Regis are more trusted and recognised among high-end Indian travellers.”
Nevertheless, Hilton’s luxury portfolio is on a steady climb. Welk said “incubating new brands” is another way the group is working to stay ahead in luxury. After recent debuts, Hilton today counts four of its 17 brands in luxury and lifestyle.
Hilton recently debuted the Canopy brand before bringing it to Asia with an opening in Chengdu this year. It also introduced LXR late last year, a new soft brand of individual properties, each distinct from the other, but all carrying the promise of uncommon and personalised experiences.
Asia-Pacific represents an important region as the world’s two most valuable hotel groups pursue growth in the luxury sector.
“The whole centre of gravity in the hospitality world is moving to Asia-Pacific. Throughout the region, we have in excess of 20 luxury and lifestyle hotels in the pipeline. There are 24 hotels (in the region) across the three brands – Waldorf Astoria, Conrad and Canopy by Hilton,” Welk shared.
Rival Marriott is also making big investments in the Asia-Pacific luxury space. It announced last week that there will be 13 new luxury projects to open in 2019, a feat considering the size of the high-end sector, according to Bruce Ryde, vice president, luxury brand management, Asia Pacific.
Ryde added that the hotel giant is rolling out a “luxury countdown process”, an internal initiative that originated with a Ritz-Carlton, to all its luxury brands. “It’s where senior people and luxury resources descend on a hotel eight to 10 days out (from its opening) to envelop the team at the property with (passion) and brand speak. This is so we give the hotel the best possible start in the luxury space.”
New and upcoming luxury hotel openings the St Regis in Hong Kong, while the Ritz-Carlton is set to launch in Xi’an (China), Perth (Australia) and Pune (India).
Brand Finance also pointed out that Marriott’s recent announcement to enter the longer-stay market to take back share from Airbnb could drive its brand value back up in the coming year.