Hilton Strategic Management Presentation

Hilton
Alex Mutch
- Marketing Management
Brenna Adamski
David Hong
Edwin Chao
Leslie Teater

Hilton Worldwide Brands
Introduction Mission Statement Opportunity Statement Sustainable Competitive Adv.

Background & History
1919
1927
Conrad
Hilton
bought
first hotel
First hotel
to add
amenities
1946
Hilton
Hotels
Corporation
goes public
Multi-hotel
reservation
system
1948
1957
Marriot
enters
industry
Hyatt
founded
1959
First
airport
hotel
opened
1929 - 1939
Great
Depression
Introduction Background & History Mission Statement Opportunity Statement

1962
1964
Hyatt goes
public
Hilton
International
Corporation
splits to go
global
Barron
Hilton
replaces
Conrad
Hilton as
President
1967
1973
Hilton has
customer
service
breakthrough
Introduces
HHonors
loyalty
program
1987 1995
First Hilton
website
launches
Hilton
International
sold
Conrad Hilton
passes away
1979

1996
2006
Stephen
Bollenbach
is first non-
Hilton CEO
Hilton
International
reacquired
Blackstone
Group buys
Hilton and
goes private
2007
2008
Airbnb
founded
Lightstay
introduced
2009
2013
Hilton
returns to
NYSE
Christopher
Nassetta
becomes
president
and CEO
Become
Hilton
Worldwide
and changes
HQ
Hilton
launches a
vacation
subsidiary
2002

Mission Statement
“To be the preeminent global hospitality company - the first choice of guests, team
members, and owners alike.”
Background & History Mission Statement Opportunity Statement Sustainable Competitive Adv.

Opportunity Statement
The hospitality industry is highly competitive, filled with pricing and sales
promotions, resulting in price wars. In this industry, Hilton possesses a pristine
brand image that has the ability to be further leveraged in order to differentiate itself
from competitors in the future. With the current influx of consumers in the lodging
industry, Hilton is now presented the opportunity to further utilize its intellectual
capital and create sustainable competitive advantage.
Mission Statement Opportunity Statement Sustainable Competitive Adv. Significance to Leadership

Definition of Sustainable
Competitive Advantage

Sustainable Competitive Advantage
A long-term competitive advantage that is not easily duplicated by other competitors.
This is developed by solidifying a pristine brand image, utilizing intellectual
capital, offering exceptional services, and strengthening customer loyalty.
Opportunity Statement Sustainable Competitive Adv. Significance to Leadership Research Methodology

Significance To Leadership
Hilton is a part of a highly competitive and fast growing industry in hotel service.
As a result, we have uncovered new forms of underleveraged resources within the
company and have developed detailed programmatic recommendations that will
maximize these forms of sustainable competitive advantage.
Sustainable Competitive Adv. Significance To Leadership Research Methodology Expected Outcomes

Research Methodology
Secondary research
Environmental scanning & monitoring
Trusted, peer-reviewed sources
Google Finance
Business Insider
Forbes
Wall Street Journal
Domestic focusSignificance to Leadership Research Methodology Expected Outcomes Leadership

Expected Outcomes
Improved customer database
Differentiated customers
Increase in customer loyalty
Increased customer share
Move to value-based pricing
Leverage strategic alliances
Movement away from third-party sources
Decrease in long-term debtResearch Methodology Expected Outcomes Leadership Corporate Culture

Leadership
● Three Presidents; Nine Executive Vice Presidents
● Most have worked with Hilton eight years or less
● High levels of experience in the hospitality industry
Joe Berger Kristin Campbell
Christopher Nassetta
Kevin JacobsIan Carter Jim Holthouser
William
Margaritis
Matt Richardson Martin Rinck Matthew Schuyler Chris Silcock Simon Vincent Mark Wang
Expected Outcomes Leadership Corporate Culture Human Resources Management

Conrad Hilton
CEO & Founder of Hilton
Emphasis on innovation and empowerment
Focus on charity and developing the community
“Success seems to be connected with action. Successful people keep
moving. They make mistakes, but they don't quit.”
“Enthusiasm is a vital element toward the individual success of every man or
woman.”
“The practice of charity will bind us... will bind all men in one great
brotherhood.”
(CEO 1919-1967)

Stephen Bollenbach
Prior CEO of Hilton
Worked as Donald Trump’s CFO
Worked with Disney & Marriott as CFO & Treasurer
Recruited by Barron Hilton in 1996
Focused on making profit with every decision
“There are a lot of bargains out there, ... Every acquisition you make is
accretive to earnings. It's a real value creator.”
“We want to continue getting out of the real estate business and more into the
(CEO 1996-2007)

Previously worked for Host Hotels and Resorts as COO
Later became CEO
Hired by Jonathan Gray of Blackstone Group as President and
CEO for Hilton in 2007
Made a worldwide Hilton tour
Began changes in organizational structure
“People were living in ivory towers. Some in Beverly Hills. We didn’t have
the connectivity. The hotels were saying, ‘Leave us alone. I don’t like you
corporate types.’ We had become siloed.”
(CEO 2007-Present)

Implemented a corporate wide CRM system
Emphasis on leveraging intellectual capital
Customer focused
“Even the posters listing corporate guidelines differed from hotel to
hotel, driving Nassetta — who puts great stock in business culture —
crazy.”
“There was a lot of what he did that was simply listening to the
customer.”
(CEO 2007-Present)

Joe Berger
Executive Vice President and President of the Americas
Oversees the operations of over 350 corporately owned Hilton
hotels in the Americas
Graduated with a masters degree in finance
Career in the Hotel Industry
Prior to Hilton, four years at LXR as Co-President
Worked internationally in operations and finance for
Marriott
(VP 2007-Present)

William (Bill) Margaritis
Oversees corporate branding, internal and external
communications, government relations, issues and crisis
management, and corporate responsibility programs
Been with the company since August 2015
Spent prior fifteen years at FedEx as Senior Vice President,
Global Communications & Investor Relations
One of the only Executives without hospitality
experience
Graduated from Michigan State with a degree in business
(VP 2015-Present)

William (Bill) Margaritis
"As we continue to gain momentum and accelerate our growth around the world, finding
additional ways to reach, engage and connect with our most critical stakeholders becomes even
more important. Bill’s breadth of experience and his broad understanding of global business and
markets will help us build, strengthen and execute an integrated strategy across Hilton that will
enhance our industry leadership position and our ability to differentiate ourselves in the
marketplace.”
- Christopher Nassetta
Background & History Mission Statement Opportunity Statement Significance of LeadershipExpected Outcomes Leadership Corporate Culture Human Resources Management

Chris Silcock
Leads the company's global commercial team, including sales,
revenue management, regional marketing and eCommerce,
and Hilton reservations and customer care
Twenty years in Hilton
Began his career with Hilton as a catering and banquet
waiter
Head of Sales and Revenue Management
Head of Online and Regional Marketing
Degree in Computer Studies from University of Essex
(VP 1995-Present)

Values
Hospitality “We're passionate about delivering exceptional guest experiences.”
Integrity “We do the right thing, all the time.”
Leadership “We're leaders in our industry and in our communities.”
Teamwork “We're team players in everything we do.”
Ownership “We're the owners of our actions and decisions.”
Now “We operate with a sense of urgency and discipline.”
Leadership Corporate Culture Human Resources Management Operations

Corporate Culture
Hilton’s Diversity Statement
“Our priority is to understand and embrace unique global cultures to ensure that our Team
Members are seen, heard, valued and respected. As a result, our senior leadership is
committed to investing in programs that promote diversity such as, inclusion training and
celebrations of international traditions and customs. Globally, we also aim to increase our
presence in local communities through employee volunteerism, partnerships and giving
programs.”
“Ultimately, I have a very simple philosophy on diversity: It is what allows us to perform and
deliver for our customers and, frankly, outperform the competition.”

Internal Diversity Programs
Executive Diversity Council
Team Member Resource Groups
Diversity Compliance Training
Diversity, Inclusion You e-Training course
Internal Communications
“As a part of our commitment to diversity and inclusion, we created the Executive Diversity Council,
comprised of the company's most senior leaders, and chaired by our President and CEO, Christopher J.
Nassetta. The Executive Diversity Council provides oversight and direction to the overall diversity
strategy related to our culture, talent and marketplace.”

Organizational Structure
CEO
Jim Holthouser
Kevin Jacobs
Matthew Schuyler Simon VincentMatt Richardson
Kristin Campbell Ian Carter
Martin Rinck
Mark Wang
William Margaritis
EVP Corporate Affairs
Joe Berger
EVP, President, Americas
Chris Silcock
EVP and CMO
Middle Management
Staff Members

Organizational Structure
“People were living in ivory towers. Some in Beverly Hills. We didn’t have the
connectivity. The hotels were saying, ‘Leave us alone. I don’t like you corporate types.’
We had become siloed.”

Human Resources
Corporate Culture Human Resources Management Operations Finance
“You first have to get the right people on the bus, get the wrong people off the bus, make sure the
right people are in the right seats before you decide where you’re driving the bus’ … that was a
philosophy that I followed.”

Human Resources: Recruiting
Core School Alliances
16 schools where recruiters look for potential interns
Career page
Indeed.com
● Hilton Worldwide University

Human Resources: Hiring
Corporate Culture Human Resources Management Finance Marketing
Application is online
Resume sent to different departments

Human Resources: Training
Part-Time: 20 hours
Full-Time: 45 hours
Hilton Worldwide University
Five Different Colleges
Corporate Culture Human Resources Management Finance MarketingCorporate Culture Human Resources Management Operations Finance

Human Resources: Training

Human Resources: Retaining
“Our Team Members are at the heart of our success and we are committed to ensuring Hilton is a
place where they can grow both personally and professionally.”
-Christopher J. Nassetta

Human Resources: Retaining
Professional development opportunities
Nassetta’s annual “Catch Me at My Best”
30 paid days of holiday/vacation
Tuition reimbursement of $1200
GED Assistance Program
Parental Leave Program

Operations: Overview
HQ in McLean, Virginia
Previous HQ was in Beverly
Hills, California until 2009
Total of 157,000 Team Members
around the world
Human Resource Management Operations Finance Marketing

Operations: Statistics
Brand Hotels Total Rooms
Hilton 560 28.1%
Hampton 2,005 27.8%
Doubletree 410 14.1%
Hilton Garden Inn 618 12.0%

Operations: Ownership
Hampton Inn Franchise Ranking by Entrepreneur.com

Human Resources Management Finance Marketing Conclusion
Financial Introduction
Operations Finance Marketing External Analysis

Stock Price (2 Years)
Human Resources Management Finance Marketing External AnalysisOperations Finance Marketing External Analysis
IPO: $20; 117,640,624 Shares (NYSE: HLT)
Current: $23.37; 1.232 M Shares

Income Statement - Numbers in Millions

Balance Sheet - Numbers in Millions

Current Ratio
Measures a company’s ability to
pay short-term obligations
Current Assets
Current Liabilities
Short-Term Solvency

Cash Ratio
Measures the ability to pay off
debt obligation using cash on
hand
Cash and Equivalents
Current Liabilities
Short-Term Solvency

Total Debt Ratio
A conservative measure of long-
term solvency
Total Liabilities
Total Assets
Long-Term Solvency

Debt-to-Equity Ratio
A measure of debt leverage
Total Liabilities
Total Stockholder’s Equity
Human Resources Management Finance Marketing External Analysis
Long-Term Solvency

Total Asset Turnover
Sales generated per dollar of
assets
Sales
Total Assets
Asset Utilization

Profit Margin
Shows what percentage of every
dollar is kept in earnings
Net Income
Sales
Profitability

Return on Assets
Earnings that are generated
from invested capital
Net Income
Total assets
Profitability

Price Earnings Ratio
Amount investors pay for one
dollar of earnings
Market Value per Share
Earnings per Share
Market Value

The percentage of all rental
units (rooms) are occupied or
rented at a given time
Occupancy Rate

Products
Finance Marketing ConclusionFinance Marketing External Analysis SWOT

Products
Finance Marketing External Analysis SWOT

Price: Average Daily Rate (ADR)
$141.52 $150.67$169.89

$369.00 $357.00$349.00

$111.21 $103.00$113.00

Price: Pricing Strategies
● Premium pricing strategy
○ High-level prices
■ Perceived to have excellent
quality and additional
characteristics and features
● Variable pricing

Price
● Guaranteed lowest price
● Why book directly with Hilton?
○ Always find the lowest price on our
websites or we'll give you $50.

Place
Website booking on
hilton.com
Third-party booking

Place
4,440 hotels
Over 730,000 rooms
97 countries and territories
All 50 states

Place
Three major factors when a new Hilton location is considered:
Where - The Geographical location must be convenient
When - Timely response to a customer’s schedule
How - Events and meetings tailored to customer’s needs

Advertising
Average: $246 Million per Year

Public Relations
● “Nassetta Inducted into Hospitality Industry Hall of
Honor”- 10/21/2015
● “Hilton Hawaiian Village Prepares Thanksgiving Meals for
Hundreds in Need”- 11/25/15
● “Hilton Atlanta Sells for $146 million”- 10/30/15
● “Hilton Hotel Reports POS Data Breach” 11/26/15
● “Hilton Brings Digital Key to Android”- 10/6/15

Sales Promotion

Personal Selling
Finance Marketing Conclusion
● “Globally Motivated, Individually
Focused”
● Over 700 sales professionals in 34
regional offices around the world
● Strategic Account Management
team dedicated to negotiating
customizable deals with
customers
● Drives profit and leads to stronger
and more committed relationships

Direct Marketing
● HHonors program and app
○ Various tiers
● Developed customer database
● Strong social media presence and
interaction

Direct Marketing

Macroeconomic Factors
● Volatile industry
● Changes in demands for hotel rooms, occupancy levels, and room rates
○ High dependency on the economic cycle
● Changes in the consumer location preference
● Dependent on transportation industry
● Cyclical and seasonal
● Environmental laws
● Government regulation
Marketing External Analysis SWOT Sustainable Competitive Adv.

Macroeconomic Factors
Finance Marketing External Analysis
● War, political conditions or civil unrest
● Decreased corporate or government travel-related budgets and spending
● Statements, actions, or interventions by governmental officials
● Negative media exposure in certain locations (Ebola, Sars, H1N1, Avian flu)
● Cyber-Attacks
● Natural or man-made disasters

Industry Competition: Direct
● Current Stock Price: 71.11 per share
○ P/E Ratio: 26.45
○ Average Volume of 26.2 M
● Social Involvement
● “We Embrace Change”
○ Innovation has always been part
of the Marriott story

Industry Competition: Direct
● Current Stock Price: 50.06 per share
○ P/E Ratio: 27.42
○ Average Volume of 440,492
● Environmental Friendly
● “We make a difference in the lives of
those we 'touch' every day.”

Industry Competition: Indirect
Finance Marketing ConclusionMarketing External Analysis SWOT Sustainable Competitive Adv.

Industry Technology
● Apps
● Digital Key
● Website

Industry Consumer
● According to “Small Business” by Demand Media, “Trend Watching”, and
“Hospitality Technology”, the industry consumer is:
○ Looking for value
○ Typically possesses disposable income
○ Appreciates option of Rewards program
○ Prefer self-service check-ins and online transactions
○ Interested in personal health and wellness

Positive Negative
Internal Strengths Weaknesses
External Opportunities Threats
SWOT Analysis

Strengths
Corporate leadership
Corporate culture
Strong intellectual capital
Ethnic diversity amongst employees
Organizational structure
HRM
HHonors database & app
Industry leader in market share
Positive Negative
Externa
l
Opportunitie
s
Threats
External Analysis SWOT Sustainable Competitive Adv. Viable Alternatives

Weaknesses
Lack of advertising measurability
High long-term debt
Decreasing timeshare profitability
HHonors promotions
Underleveraged HHonors database
Underleveraged strategic alliances
Lack of room standardization
Research and Development department
Positive Negative
Externa
l
Opportunitie
s
Threats

Opportunities
Exclusive booking to Hilton.com
App & technology development
Economic recovery
Increase in consumer disposable income
Decreased transportation costs
Growing availability of strategic alliances
Reduced threat of disease
Increased credit card security
Positive Negative
Externa
l
Opportunitie
s
Threats

Threats
Increase of competition (direct and indirect)
New forms of travel stay
Growth of third-party booking sites
Marriott’s recent acquisition of starwood
High market volatility
International civil unrest
Decrease in international travel
Industry wide cyber attacks
Positive Negative
Externa
l
Opportunitie
s
Threats

Sustainable Competitive
Advantage

Sustainable Competitive Advantage
A long-term competitive advantage that is not easily duplicated by other competitors.
This is developed by solidifying a pristine brand image, utilizing intellectual
capital, offering exceptional services, and strengthening customer loyalty.
SWOT Sustainable Competitive Adv. Viable Alternatives Minor Recommendations

New Sources of Sustainable
Competitive Advantage
Develop our database asset
Comprehensive loyalty program and application
Leverage intellectual capital
Empower front-line employees
Promote and enhance positive consumer perception of brand image
SWOT Sustainable Competitive Adv. Viable Alternatives Minor Recommendations

Viable Alternatives
Implement an on-going immersion program
Management develops a stronger connection to employees and customers
Expensive and time-consuming
Initiate a Business Leadership Summit
Collaborate with and learn from leaders in other industries
Difficult to implement
Sustainable Competitive Adv. Viable Alternatives Minor Recommendations Major Prog. Recommendation

Viable Alternatives
Standardize, renovate, and modernize all rooms
Provides brand continuity
Expensive
Create a new Research & Development department
Leverages new opportunities and fosters innovation
Costly undertaking
Sustainable Competitive Adv. Viable Alternatives Minor Recommendations Major Prog. Recommendation

Minor Recommendations
Streamline distribution channels
Utilize our leverage in relationships with third party sources
Strengthen and create strategic alliances
Establish Matrix structure
Develop an Employee Service Representative position
Connect with employees
Viable Alternatives Minor Recommendations Major Prog. Recommendation Areas of Future Study

Major Programmatic
Recommendation

Customer Tiers
Blue (0 Points) Silver (1,000) Gold (7,000) Diamond (12,000)
● Room
selection
● Digital key
● Room
customization
● Blue rewards
● iPads
● Premium Wi-fi
● Spa access
● Premium
Spotify & Hulu
access
● Late check-out
● Digital check-in
● Silver Rewards
● Personal
assistant
● Premium Starz
access
● VIP parking
● Exclusive hors
d’oeuvres
● Gold Rewards
● Exclusive
concert access
● Sleep Number
bed
$1 of hotel = 1 Point
$1 of spa = 2 Points
$1 of event space = 2 Points
Minor Recommendations Major Prog. Recommendation Areas of Future Study Would You Invest?

A continuation of some of the services from HHonors
Selecting a specific room
Digital room key
Additional customization options that Hilton can store in database
Number of pillows
Housekeeping times
Temperature of the room
Shampoo type
Blue Tier
(0 Points)

Premium Wi-fi
Exclusive spa access
Pool, sauna, and shower access
Spotify & Hulu access
Late check-out
Digital check-in
iPads
Silver Tier
(1,000 Points)

Menu of options
Per geographic location
Uncovered during research
Personal assistant per Dwell floors (as needed)
Digital access to assistants
Starz premium access
VIP parking
Exclusive hors d’oeuvres upon arrival
Gold Tier
(7,000 Points)

Exclusive event access
Meet and greets
Concert access
Red carpet access
Sleep Number beds
Diamond Tier
(12,000 Points)

Cultural Feasibility
Corporate philosophy
Positive attitudes toward change and innovation
Customer focus
Eager to improve
“We were complacent. There was no culture of innovation. It was more a culture
of do it at a relatively slow pace and do it the way we’ve always done it... It just
wasn’t organized in the right way.”
- Christopher NassettaMinor Recommendations Major Prog. Recommendation Areas of Future Study Would You Invest?

Financial Feasibility
44 million HHonors members
50% of guests are HHonors members
$720 Million spent in 2014 for HHonors
Additional profit loss from redeemed reward nights
$730 Million of Cash flow in 2014

Rollout
In January 2016:
150 strategic, domestic locations with varying demographics
Opt-in for current HHonors members
One year of data gathering
Survey
In January 2017:
One year to redeem points
Six-months of final point accumulationMinor Recommendations Major Prog. Recommendation Areas of Future Study Would You Invest?

Rollout
In July 2017:
One year to redeem points
Six-months of Dwell points
Final phase out HHonors program
In January 2018:
Full implementation of Dwell program

Expected Outcomes
Improved customer database
Differentiated customers
Increase in customer loyalty
Increased customer share
Move to value-based pricing
Leverage strategic alliances
Movement away from third-party sources
Decrease in long-term debtMinor Recommendations Major Prog. Recommendation Areas of Future Study Would You Invest?

Metrics
Enrollment Data
Carry over from HHonors
New Dwell members
Changes in tier population
Member retention rates
Member Satisfaction Survey
Time spent on app and with value-added programs
Track spa revenueMinor Recommendations Major Prog. Recommendation Areas of Future Study Would You Invest?

5 Golden Questions
As an enrolled Hilton Dwell Member…
How did you hear about Dwell?
What did you like about the Dwell?
What did you dislike about Dwell?
Will you be using the Dwell Program more often?
Would you like to opt-in for more loyalty member information?

Areas of Future Study
HRM program
Differentiate employees by value
Further utilize matrix structure and diversity
High school and college curriculum
Brand expansion opportunities
Major Prog. Recommendation Areas of Future Study Would You Invest? Spiritual Implications

Would You Invest?
Yes!
Areas of Future Study Would You Invest? Spiritual Implications Conclusion

Spiritual Implications
1 Timothy 6:10
“For the love of money is a root of all kinds of evils. It
is through this craving that some have wandered
away from the faith and pierced themselves with
many pangs.”
Colossians 3:23
“Whatever you do, work heartily, as for the Lord and
not for men”
Would You Invest? Spiritual Implications Conclusion

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http://www.businessinsider.com/how-hotels-should-adapt-to-growing-threat-airbnb-2015-7
http://www.pwc.com/us/en/asset-management/hospitality-leisure/publications/assets/pwc-hospitality-directions-us-august-2015.pdf
http://www.tnooz.com/article/Online-travel-agents-and-Hotels-Are-they-friends-enemies-or-frenemies/
http://hotelnewsnow.com/article/13323/ota-evolution-demands-more-pricing-discipline
http://blog.hebsdigital.com/a-call-to-arms-how-to-shift-market-share-from-the-otas-to-the-hotel-website/
http://skift.com/2015/07/22/hilton-gets-aggressive-telling-travelers-the-lowest-price-is-only-on-hilton-com/
http://press.fourseasons.com/news-releases/2014/four-seasons-launches-new-vacation-rental-website-showcasing-portfolio-of-exclusive-urban-and-resort-
residences-around-the-world/
http://www.hotelnewsnow.com/Article/13949/Quit-fighting-and-join-Airbnb
http://www.leadershipsynergies.com/docs/060131_article_HiltonSAMVelocity.pdf
http://www.pointswithacrew.com/wp-content/uploads/2014/10/hilton-select-your-room.jpg

Additional Finance Points
Blackstone acquired Hilton Hotels in 2007
Purchased at $26 billion including debt
“Right now, income is being used to service debt and not invest in the business. This
could hamstring Hilton for a while.”
- Michelle Grant, A Travel and Tourism Manager at Euromonitor (2007)

2006 Debt
From Hilton’s 2006 Annual Report:
“At December 31, 2006, we had total debt of $6.97 billion (net of approximately $500
million of debt and capital lease obligations resulting from the consolidation of
certain joint-venture entities and a managed hotel, which are non-recourse to us).
Subsequent to the acquisition of Hilton International, we reduced our indebtedness
by approximately $1.6 billion. A focus of our financial strategy for 2007 is further
debt reduction through operating cash flow and the proceeds of asset sales. Total
cash and equivalents (including restricted cash of approximately $293 million) were
approximately $431 million at December 31, 2006.”

Timeshare
● Introduced in 2002
○ Invested $60 million on new development
● Collaboration with premier timeshare real estate
development firms
● 240,000 Club Members
● A collection of 60 club affiliated resorts
○ Includes those developed, managed, and
franchised by Hilton Worldwide
● According to 2014 Annual Report:
○ Pulling away from timeshares
■ High cost, low demand = deteriorating
profit margin

Timeshare
● Three main areas of revenue:
○ Timeshare sales
■ Does so with Hilton and third party vendors
○ Resort operations
■ HGV club
■ Rental revenue, enrollment fees, annual
fees, and transaction fees
○ Financing
■ Interest from the provided loans for
customers buying timeshares

Timeshare Competition
Compete with other hotel and resort timeshare operators for sales based on:
Location
Quality of accommodations
Price
Financing terms
Quality of service
Terms of property use
Opportunity for timeshare owners to exchange into time at other timeshare

Timeshare Competition (Cont.)
Primary competitors:
Hyatt Residence Club
Marriott Vacations Worldwide Corp.
Starwood Vacation Ownership
Wyndham Vacation Resorts

A Customer’s Journey
December
2015
January
2016
July
2016
November
2016
February
2017
61,000
HHonors
Points
Silver
HHonors Tier
61,000
HHonors
Points
Blue HHonors
Tier
1,000 HHonors
Points
(60,000 HHonors
points redeemed for
2 free nights)
Blue HHonors Tier
1,000 HHonors
Points
1,000 Dwell
Points
Blue HHonors
Tier
Silver Dwell Tier
0 HHonors
Points
4,000 Dwell
Points
Silver Dwell Tier

HHonors Details
“When points are earned by Hilton HHonors members, the property or affiliated
partner pays Hilton HHonors based on an estimated cost per point for the costs of
operating the program, which include marketing, promotion, communication,
administration and the estimated cost of award redemptions… We provide Hilton
HHonors as a marketing program to participating hotels, with the objective of
operating the program on a break-even basis to us.”
- Christopher Nassetta, 2014 Annual Report

Overview of U.S.
Franchise Fees

● 1962: Hyatt became a public company
● 1964: Hilton began to expand his operations outside of the United States and
renamed the company
○ It became one of the largest hotel businesses in the world. The company
expanded its operations into credit cards, car rentals, and other services
● 1965: Launch of Lady Hilton, the first hotel concept designed exclusively for
women travelers
● 1967: Conrad Hilton resigns his presidency to become chairman
● 1968: Hyatt International was formed
● 1969: Marriott opens its first international hotel in Acapulco, Mexico
● 1970: Hilton becomes the first NYSE-listed company to enter the domestic gaming

Additional History
1972: Marriott named J.W. Marriott, Jr. Chief Executive Officer
1972: Hugh M. Friend, Jr because the new president of Hyatt
1973: Hilton develops the first centralized reservation service using computer
technology, a breakthrough in customer service
1979: Conrad Hilton died on January 3, in Santa Monica, California
1985: J. Willard Marriott, Sr. passes away, and J.W. Marriott, Jr. is elected Chairman
of the Board, Marriott
1987: Hilton introduces Hilton HHonors™, its guest loyalty program
1989: Hampton Hotels is the first hotel company to promise 100% Satisfaction
Guarantee

Additional History
2007: The average daily rate for a hotel room surpasses $100
2009: Hilton launches its first application for mobile devices
2011: Hampton Hotels, part of the Hilton brand, is named the #1 franchise
opportunity by Entrepreneur Magazine
2013: Becomes the first hotel brand to earn over 1 million Facebook likes

Kristin Campbell
Responsible for leading Hilton Worldwide's global legal,
compliance and government relations functions
Graduated from Cornell with a Law degree
Prior to Hilton, worked with Staples for eighteen years, serving as
the company's senior vice president, general counsel, and
corporate secretary

Ian Carter
Was Chief Executive Officer of Hilton International prior to its re-
acquisition by the company in 2006
Graduate of the University of West London, School of Business and
Management, and received an honorary doctorate from the
University for his industry accomplishments and ongoing
support of the development of future hospitality leaders
Prior to Hilton, served as Officer and President of Black & Decker
Corporation, Middle East, Africa and Asia
Responsible for all International operations
Prior to Black & Decker, served as President of General Electric
Specialty Chemical, after working his way up in the company

Jim Holthouser
Company's global leader for brand management and customer
marketing across nine consumer brands
MA in economics/political science from the University of Louisville
and international MBA from the American Graduate School of
International Management
Series of senior management positions within Hilton Worldwide
in the branding, franchising and marketing arenas
More than 20 years of experience in the lodging, restaurant and
gaming industries

Kevin Jacobs
Oversees all of the company's global finance functions, as well as
its global information technology function and all real estate
and asset management aspects
Joined the company in 2008 as Senior Vice President, Corporate
Strategy
Elected Treasurer in 2009
Appointed Executive VP and Chief of Staff in 2012
Prior to Hilton Worldwide, served as Senior Vice President,
Mergers & Acquisitions and Treasurer of Fairmont Raffles
Hotels International
Prior to Fairmont, spent seven years with Host Hotels & Resorts,

Matt Richardson
Oversees the company's global efforts regarding new build
projects, capital improvements, technical advisory services,
interior design and construction
Prior to Hilton, served as Senior Vice President and Chief
Development Officer for Host Hotels & Resorts, Inc., where he
oversaw all of the company's design and construction activities
Bachelor's degree in Urban Planning and his Master's degree in
Business Administration from the University of Virginia

Martin Rinck
Responsible for the operations of over 90 trading hotels in the 18
countries across Asia Pacific
Includes expansion plans - Doubling in the next year
Been with Hilton since November 2008
Was Executive Vice President and Chief Development Officer for
The Rezidor Hotel Group, where he drove significant growth
for The Rezidor Hotel Group's hotel portfolio in Europe, the
Middle East and Africa
Experience in the global hospitality and restaurant
industries
MBA from Brunel University

Matthew Schuyler
Chief Human Resources Officer for Hilton Worldwide and leads
the company's global human resources organization
Been with Hilton for past seven years
Prior to Hilton, spent five years as Chief Human Resources Officer
at Capital One Financial Corporation
MBA from University of Michigan
Serves on the Board of Directors for the Make-A-Wish Foundation
of America
Member of Penn State's College of Information Sciences and
Technology Advisory Board

Simon Vincent
Executive Vice President & President, Europe, Middle East & Africa
for Hilton Worldwide
Based in London
Been with company for eight years
Overseen the opening of more than 100 hotels and
spearheaded growth in the multi-brand proposition
Includes Hampton and DoubleTree
Twenty-year veteran of the leisure and travel industry
Spent 13 years at the Thomas Cook Group, latterly as Chief
Operating Officer of the UK Travel Division

Mark Wang
President, Hilton Grand Vacations for Hilton Worldwide and
oversees all of the company's global timeshare operations
Been in role for seven years
Previously Head of Hilton Grand Vacations, Asia
Joined Hilton Grand Vacations in 1999 as Managing Director,
Hawaii
Held various positions since
Prior to Hilton, founded and co-founded multiple hotel and hotel-
consulting companies

Ronen Nissenbaum
Vice President of Operations for Luxury Hotels, America
Hilton announced his appointment in November 2015
Previously worked in senior management for global corporations
such as DIsney and InterContinental Hotel Group
“Ronen’s ascension to this newly created role reflects our strong
commitment to the luxury sector and to growing our luxury
portfolio within the Americas,” - Joe Berger

Most recently CEO of Host Hotels & Resorts, inc.
Also served as Executive Vice president and COO for this company
Co-founded Bailey Capital Corporation in 1991
Served as Chief Development Officer at the Oliver Carr Company, a commercial real
estate firm
Under Nasetta’s leadership, Hilton launched the Travel With Purpose initiative,
a corporate commitment to diversity and inclusion, cultural awareness,
community building and sustainable living

“A balanced guy,” according to Edward Walter
Relationally oriented, prioritizes family, talkative, loves tradition
Focused on Employees
Still visits many locations personally
“With all his success in business, he always has stayed a really good guy,” -
Jonathan Gray, Blackstone Group

Got rid of ⅔ of executive leadership,
“I was committed to look them in the eye, tell them what I’m doing, give them the reasons why
and answer questions for as long as they wanted.”
Improvement of business processes which saved a lot of money
“We were able to save a ton of money without affecting performance one bit,” said Jacobs
Believed his task was risky but possible
“I went through the rationale. I said we’re all in this together and, if we don’t take steps to
ensure our future, the risks of material damage to the business are significant.”
“A lot of people were thinking we were going to fail,” Nassetta said. “And frankly, a lot of
people were wanting us to fail. And we didn’t.”

● Hilton created the Conrad N. Hilton Foundation in 1944, which awards an
annual prize to exemplary organizations that work to end suffering in the
world. It also supports programs for the blind and the homeless as well as
education initiatives
● Team Member Resource groups
○ African American Team Member Resource Group
○ Asian and Pacific Islander Team Member Resource Group
○ Women's Team Member Resource Group
○ Hispanic/Latino Team Member Resource Group
○ LGBT & Friends Team Member Resource Group
Team Member Resource Groups

Recognize the unique insights, perspectives, and background of others
Create competitive advantages for ourselves by leveraging the diversity of our
Team Members
Develop an environment of trust, respect, and inclusion; and
Avoid discrimination and disrespectful behavior

Diversity Awards
External Recognition for Diversity (2013)
Black EOE Journal – Top Diversity Employer (2013)
Black EOE Journal – Top Supplier Diversity Program (2013)
DiversityBusiness.com - Top 50 Organizations for Multicultural Business Opportunities, 45th
Place
HispanicBusiness.com – Top 25 Leaders in Supplier Diversity – Fred Lona, S. Director, Supplier
Diversity (2013)
DiversityBusiness.com - America 's Top Diversity Champions for 2013 – Fred Lona, Sr. Director,
Supplier Diversity (2013)
DiversityInc – 25 Noteworthy Companies (2013)
DiversityInc – Top 10 Companies for Supplier Diversity (2013)
DiversityInc – Top 10 Companies for Latinos (2013)

Diversity Awards (Cont.)
External Recognition for Diversity (Cont.)
Hispanic Network Magazine – Top Diversity Employer (2013)
Hispanic Network Magazine – Top Supplier Diversity Program (2013)
LATINA Style Magazine – LATINA Style 50 Best Companies for Latinas
Man About World – 2013 Editors Choice Award for Very Best in Gay Travel (2013)
MBN USA 75 Leading Men in Corporate Supplier Diversity – Fred Lona, Sr. Director,
Supplier Diversity (2013)
Professional Women’s Magazine – Top Diversity Employer for Women (2013)
Professional Women’s Magazine – Top Supplier Diversity Program for Women (2013)
Working Mother Magazine – Best Company for Hourly Workers (2013)
HRC Corporate Equality Index – 100 percent

Hilton’s View of AirBNB
Nassetta considers AirBNB to be in a different segment of the market than Hilton
"The bulk of the demand is in higher rated, high-occupancy urban markets. It is longer length of
stay with a predominantly leisure and value focus and stay occasions where customers are
willing to accept inconsistent product with very limited services."
“AirBNB doesn’t scare us.”
"But I suspect over time everybody will see it for what it is: a really good business but a business
that is largely distinct from what we do. There is every opportunity for both of us to have
really successful business models."

Hilton’s Differentiation from Competition
“We believe that our position as a multi-branded manager, franchisor, owner and
operator of hotels makes us one of the largest and most geographically diverse
lodging companies in the world.”

The Marketing Breakdown
Hilton has many direct marketing that they implement
Telemarketing
Postal Mail
“... hospitality intermediaries generally employ aggressive marketing strategies, including expending
significant resources for online and television advertising campaigns to drive consumers to their
websites.”
-Hilton 2014 Annual Report

Profitability, HRM, & Renovations
“We have focused on maximizing the cost efficiency and profitability of the portfolio
by, among other things, implementing new labor management practices and systems
and reducing fixed costs. Through our disciplined approach to asset management, we
have developed and executed on strategic plans for each of our hotels to enhance the
market position of each property, and at many of our hotels we have renovated guest
rooms and public spaces and added or enhanced meeting and retail space to improve
profitability.”

Hilton Strategic Management Presentation

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