Businessmodel of Hilton

Customer Segments

Hilton Worldwide serves a range of customers worldwide. This includes general consumers and commercial customers.

The Company serves consumers through its hotel services, with its hotel guests principally categorised into two categories: transient guests, comprising individual travelers who are traveling for business or leisure; and group guests, comprising those traveling for group events, that may also reserve rooms for meetings, conferences or social functions. Group guest are often attending events organised by commercial or institutional customers, including corporations, social groups, the military, educational institutions, and religious groups.

Hilton Worldwide also serves a range of customers across the real estate and hospitality sectors. This includes property developers, and hotel and timeshare owners to which the Company provides management and timeshare services, as well as franchisees to which the Company licenses its brands and provides consumer financing products.

Hilton Worldwide serves a global customer base. This includes customers across three geographic regions: the Americas, including Central America, and all Caribbean nations; Europe, Middle East and Africa; and Asia Pacific, including India, Australia, New Zealand.

Value Propositions

Hilton Worldwide provides value to its customers in the following ways

• Its industry standing and prestigious reputation, with the Company established as one of the world’s largest and most well-respected hospitality groups, with its name associated with high-quality services and prestige;
• Its high-end hotels and the quality of its services, with the Company providing high-quality services through its hotels, including premium facilities and exceptional customer service;
• Its global reach and international network of hotels, with the Company operating hotels and timeshares around the world, serving customers across international markets in the Americas; Europe, Middle East, and Africa; and Asia Pacific; and
• The breadth of its brand portfolio, with the Company operating several high-end luxury, hospitality, and lifestyle brands, including Waldorf Astoria, Conrad Hotels and Resorts, and Canopy by Hilton. ### Channels

Hilton Worldwide operates a website at www.hiltonworldwide.com, through which it provides information to customers on its various services, locations, and brands. The Company’s also operates a hotel reservation portal named Hilton HHonors, through which customers can search and book hotel rooms across the Company’s branded hotels and resorts. The Hilton HHonor portal is available through desktop and mobile browsers, as well as through mobile apps on iOS, Android and Windows Phone platforms.

Hilton Worldwide also takes room reservations over the phone through its call centres, as well as through a number of third-party online travel agencies and booking agents, and physical brick and mortar travel outlets.

Hilton Worldwide provides services directly to consumers through its broad portfolio of hotel and resorts across the Americas, Europe, the Middle East, Africa, and Asia Pacific, and through its numerous brands, including Waldorf Astoria, Canopy, Curio, Hilton Garden Inn, and Home2 Suites.

Hilton Worldwide additionally also operates specialist sales and relationship management teams that deal directly with commercial customers, in order to ensure a personalised and effective service.

Customer Relationships

Hilton Worldwide provides a self-service reservation portal to its customers, through which they are able to arch for availability across all of the Company’s branded hotels and resorts and make bookings, without interacting with members of the Company’s sales and marketing teams.

Hilton Worldwide provides more personalised services to consumers through its telephone booking teams, and through its in-hotel staff, who are available to guests at all times to answer queries and respond to complaints. The Company works closely on an ongoing basis with commercial customers, particularly developers and hotel owners to which it provides management services, with a view to establishing lasting relationships.

Customers are able to access additional assistance through Hilton Worldwide’s dedicated customer support team, which can be contacted over the phone. The Company also provides a range of online resources such as FAQs, and operates social media accounts with Twitter, Facebook, LinkedIn, Flickr, YouTube, and Instagram, through which it can interact directly with consumers.

Key Activities

Hilton Worldwide is a hospitality company and hotel operator. The Company is engaged primarily in the ownership, leasing, management, development and franchising of hotels, resorts and timeshare properties, as well as the licensing of its brands to third parties.

Hilton Worldwide’s activities are divided into three business segments: Ownership, which owns and manages more than 150 hotels worldwide with approximately 59,460 rooms; Management and Franchise, which manages hotels, resorts and timeshare properties owned by third parties and licenses its brands to franchisees; and Timeshare, which markets and sells timeshare properties across the world. Hilton Worldwide currently owns or manages around 4,610 hotels, resorts and timeshare properties in approximately 100 countries and territories.

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Hilton Worldwide collaborates with various partner companies and organisations across its three operating segments. These partners include:

• Marketing and Distribution Partners, comprising online and physical travel agencies, marketing affiliates, and online booking portals, that assist in extending the Company’s own sales and marketing reach;
• Travel Partners, comprising airline, rail, and cruise operators, as well as car rental companies;
• Joint Venture Partners, comprising a range of property developers and hospitality companies with which the Company collaborates on projects through mutually-owned vehicles;
• Loyalty and Reward Program Partners, comprising a range of commercial partners that participate in the Company’s rewards program, providing various discounted products and services to frequent Hilton Worldwide customers; and
• Strategic and Alliance Partners, comprising a range of companies and organisations across multiple sectors with which the Company collaborates on joint projects. Hilton Worldwide has partners on projects with Baptist Health South Florida in the US, and with CIMC Modular Building Systems in the UK. The Company has also launched a recent partnership with Uber to integrate their respective mobile functionalities.

Key Resources

Hilton Worldwide’s key resources are its portfolio of owned and leased hotels and timeshares, its IT and communications infrastructure, its financial resources and development infrastructure, its sales and distribution channels, its partnerships, and its personnel.

Hilton Worldwide owns and operates more than 150 hotels, and manages more than 4,610 hotels and timeshares worldwide, that are key to the Company’s ongoing business. The Company also owns a range of trademarks and brands that are material to the Company’s value.

Cost Structure

Hilton Worldwide incurs costs in relation to the development and maintenance of its various hotels and timeshares, the management and operation of its physical assets, the maintenance of its IT and communications infrastructure, the operation of its sales and distribution channels, the management of its partnerships, and the retention of its personnel.

In 2015 the Company incurred expenses related to its owned and leased hotels in the amount of $3.17 billion, and timeshare costs totalling $897 million. The Company’s costs from the management of third-party and franchised properties amounted to $4.13 billion. Hilton Worldwide also accrues substantial costs in relation to the payment of salaries and benefits to the its workforce of more 164,000 employees.

Revenue Streams

Hilton Worldwide generates revenue through its hotel management, franchising, and timeshare sales operations. The Company derives its revenue from several streams:

• Hotel fees, charged to transient and group guests in relation to room bookings and related hotel services;
• Management fees, charged to hotel owners and to homeowners’ associations at timeshare properties; and
• Franchise fees, including initial application and initiation fees, charged to new hotels entering the franchise system and monthly royalty fees, generally calculated as a percentage of room revenues. In 2015 Hilton Worldwide generated $11.27 billion in annual revenue, up on the $10.5 billion recorded by the Company in 2014. The largest portion of the Company’s revenue was generated by the Company’s owned and leased hotels, which amounted to $4.23 billion, while revenue from managed and franchise properties totaled $4.13 billion.