Hilton Plans To Make Most Of Its Promus

<B>Hilton Plans To Make Most Of Its Promus</B>

By Bruce Serlen

Following its year-end $4 billion acquisition of the Promus Hotel Corp., Hilton Hotels Corp. earlier this month brought 450 general managers and company executives together in San Francisco to focus on, among other things, retaining and building both units' corporate accounts business.

"Corporate accounts are an extremely important segment for us and the merger with Promus only makes this more so," said Steven Armitage, senior vice president for sales. "While the former Hilton business was roughly one-third corporate group, one-third corporate transient and one-third leisure travel, Promus was about two-thirds transient (corporate and leisure combined) and one-third corporate group."

As of Dec. 1, Hilton brands such as Hilton, Conrad International, Hilton Suites and Hilton Garden Inns joined hands with such Promus brands as Doubletree, Embassy Suites, Hampton Inn, Harrison Conference Centers, Homewood Suites and Red Lion hotels. Overall, the portfolio now numbers 1,900 hotels operating in a variety of market segments in more than 50 countries.

Naturally, with two such large companies, there was a fair amount of overlap of key accounts. "All existing agreements remain in place," Armitage said. "What we're starting to do is talk with customers to see how they want to proceed. We're certainly not looking to create a situation where anything is taken away. Rather, we're looking to add greater value than it may have been possible to provide before."

Similarly, there likely will be some overlap of national sales people post-merger. "But we plan to integrate our efforts quickly," said Armitage. "We want to determine what's best for each account on a case-by-case basis and move forward accordingly."

With a new and expanded base of operations, Armitage said clients can look for greater account coverage. "We will work as clients prefer, encouraging them to look at their total travel needs, both in the short and long term," he said.

As for the value of the national sales account representative, "it often comes down to helping coordinate the relationship between the corporate travel buyer and our hotels. Reps have the big picture in mind and can effectively facilitate these discussions."

Armitage's focus is global. Hilton International properties are included as a result of Hilton's recent marketing agreement with the United Kingdom-based Hilton Group Plc, which formerly was known as the Ladbroke Group. Also included are Stakis Hotels, also in the United Kingdom.

"We live in an increasingly global business community today," he said. "For multinational clients especially, accounts are becoming so large. We can provide one sales representative for an account or we can provide specialists for different geographic regions, depending on what makes the most sense."

In addition to the global reach, Hilton's strengths in the marketplace include its varied product, according to Armitage. At the time the merger was announced last fall, Hilton CEO Stephen Bollenbach told Business Travel News that Hilton was eager to grow its presence in the extended stay and budget segments and to move more of its business to franchising, "where we are earning fees rather than owning" hotels outright. Of Promus's 1,443 hotels, 1,112 are franchised.

Does Armitage see the profusion of brand names as a potential liability? "To the contrary, as it's working out, the two companies' brands are complementing each other really well. Also, having new brands creates a sense of competition for us internally, which can be very healthy."

The only consolidation in the brands to date is a small one: Hilton had planned on opening a residential suite product, but the four that were planned in the initial phase now will move forward as Homewood Suites.

"There is so much equity built into each of the brands we have," said Armitage, each being well known to clients that use them. "The challenge is to make sure their positioning in the market is clear to potential users." This may mean providing additional marketing support to certain brands in order to raise their visibility.

On issues of interest to corporate travel buyers ranging from single image inventory to full folio data, Hilton intends to be proactive. "Single image inventory is on our radar screen," he said. "It's crucial that we be consistent on inventory and pricing if we want to retain our credibility."

Similarly, full folio data is "in the cards," though nothing is imminent. "We want to work jointly with our clients on making this a reality. From a budgeting and tracking point of view, we know the information is valuable."

Frequent guest award programs, designed to encourage repeat business, can be another source of this information. At Hilton, the program is called Hilton HHonors. "Promus had no comparable program," he said, "so Promus business travelers now gain a whole new benefit.