Activities

Hilton International owns, leases, manages or franchises more than 400 hotels across the world under the four- to five-star Hilton name and the mid-market Scandic brand (in  Sweden, Denmark, Norway and northern Europe).

It started life as the international arm of Hilton Hotels Corporation (HHC) of the USA. It was sold in 1964 and subsequently acquired by UK gaming giant Ladbrokes in 1987 (which later became the Hilton Group).

The two Hiltons were reunited in February 2006 to create a $1.7b business with more than 2,800 hotels and 475,000 bedrooms in 80 countries.

During the intervening 40 or so years, Hilton International owned the rights to the Hilton name throughout the world except the USA, where the name was operated by HHC along with six additional brands - Doubletree, Embassy Suites Hotels, Hampton Inn, Hampton Inns & Suites, Hilton Garden Inn and Homewood Suites by Hilton.

However, the two Hiltons have been moving closer together since 1997 with the launch of a global marketing alliance, a common identity and a joint venture agreement to share the development of the luxury Conrad brand.

The Hilton International line-up also encompasses Hilton Worldwide Resorts, time-share company Hilton International Grand Vacations and the LivingWell chain of health and fitness clubs that operate inside hotels and as standalone clubs.

Timeline

• 1919: Conrad Hilton buys his first hotel, the Mobley, in Cisco, Texas. The first hotel to carry the Hilton name is built in Dallas in 1925.
• 1943: Hilton becomes the first “coast-to-coast” hotel chain in the USA with the purchase of the Roosevelt and the Plaza in New York.
• 1946: Hilton Hotels Corporation (HHC) is formed and listed on the New York Stock Exchange.
• 1949: The first hotel outside the USA, the Caribe Hilton, opens in Puerto Rico, marking the birth of wholly-owned subsidiary Hilton International Company.
• 1953: HHC moves into Europe with the Castellana Hilton in Madrid.
• 1963: Esso Motor Hotels opens Sweden’s first motel in Laxa. The group expands into Denmark and Norway in the early 1970s and is sold to a Swedish consortium in the mid-1980s, when it becomes Scandic Hotels.
• 1964: Hilton International spins off as a separate corporation, with Conrad Hilton as its president. The agreement gives HHC the exclusive right to use the Hilton name in the USA, while Hilton International has the right to the name throughout the rest of the world.
• 1967: Transworld Airlines buys Hilton International. The group floats on the London stock market with a market value just below £1m.
• 1985: The first luxury Conrad International hotel, the Conrad Jupiters, Gold Coast casino-resort opens in Australia. It is followed by hotels in Dublin (1989) and London (1990).
• 1987: The Allegis Corporation buys Hilton International but, a few months later in October, sells it on to the UK-based Ladbrokes Group for $1b. Hilton owns or manages 92 hotels at this point.
• 1991: The Hilton International Grand Vacations Company is set up.
• January 1997: HHC and Hilton Group form a global marketing alliance that reunites the Hilton brand again and creates a combined portfolio of more than 400 hotels. The following year they issue a joint logo and identity.
• March 1999: Ladbrokes completes the acquisition of Scottish-based hotel group Stakis Plc for £1.4b. Stakis boosts Hilton’s hotel tally from 165 to 220 and more than doubles its UK presence from 37 to 91 hotels. It also brings a chain of 74 LivingWell fitness clubs.
• May 1999: Ladbrokes Group Plc changes its name to Hilton Group Plc.
• 2001: Hilton raises £312m from the sale-and-leaseback of 11 hotels to the Royal Bank of Scotland. In April, it buys Swedish listed hotel group Scandic Hotels AB for £612m. Scandic has 154 hotels in Scandinavia and northern Europe. The deal, which completes in June, boosts the group’s hotel numbers to 379.
• 2002: Hilton announces the £311m sale and leaseback of 10 hotels to property group Rotch in September. It launches the 36-strong Hilton Worldwide Resorts and, in November, makes an agreement with Coral Hotels & Resorts to create a new brand, Coral by Hilton. Also in November, Hilton Group and HHC form a joint venture company, based in Belgium, to expand the Conrad brand of luxury hotels worldwide. The plan is to add 50 more hotels by 2010.
• February 2004: Hilton identifies franchising as a route to expansion and opens eight franchised hotels in India co-branded as Trident Hilton.
• November 2004: Hilton puts 11 provincial UK hotels on the market. In December it takes on the lease of London’s historic Waldorf hotel.
• February 2005: Hilton announces plans to dispose of up to £300m-worth of assets over the following 12 months through sales or sale-and-manageback deals.
• March 2005: Stardon (a joint venture between Starwood Capital and Chardon Hotels) spends £79.8m on seven provincial Hiltons, which are converted to Holiday Inns
• July 2005: Hilton puts another package of 18 UK hotels on the market, preferably for sale-and-manageback deals.
• October 2005: Hilton Group reveals it is in talks to sell the Hilton International hotels division back to HHC for £3.6b.
• November 2005: Hilton sells 15 hotels in the UK to The Managed Hotels Unit Trust for £382.4m. It retains 30-year management contracts for the properties.
• December 2005: Agreement is reached for HHC to buy Hilton International for £3.3b in a deal set to complete in the first quarter of 2006. The merged $1.7b business has a combined 2,800 hotels in 80 countries after absorbing more than 400 Hilton International hotels (of which 40 are owned, 200 are leased and 160 are under management or franchise contracts). The buy includes more than 80 LivingWell health clubs, mostly managed.
• February 2006: The sale of Hilton International to HHC completes and £4.2b is returned to shareholders in Hilton International.
• March 2006: Hilton International puts two flagship hotels - the London and Birmingham Metropole hotels - on the market for a rumoured £400m.
• June 2006: The reunited group announces plans to roll-out the US-only Doubletree, Embassy and Hampton Inn brands worldwide to tackle the mid-market. The Hilton name is to be reserved for the company's best hotels. The following month, it reveals plans to increase its presence outside the USA from 2,800 to 4,000 properties within five years.
  

Financial snapshot

Full year

Turnover: £2.9b (2004: £2.7b)
Pre-tax profit: £187.5m (2004: £159m)

Half year

Turnover: £887.6m (2004: £845.9m)
Pre-tax profit: £72.6m (2004: £65.6m )

Financial year end: 31 December 2005
Half-year end: 30 June 2005

Operating data

Breakdown of results for year to 31 December 2005

United Kingdom
Turnover: £630.9m (2004: £655.1m)
Operating profit: £81.3m (2004: £88.1m)
Revpar-London: £78.66 (2004: £77.11)
Revpar-provinces: £52.82 (2004: £52.51)
Europe & Africa
Turnover: £1.2b (2004: £1.1b)
Operating profit: £82.7m (2004: £58.2m)
Middle East & Asia Pacific
Turnover: £726.9m (2004: £652.8m)
Operating profit: £27m (2004: £18.5m)
The Americas
Turnover: £263.6m (2004: £236m)
Operating profit: £24m (2004: £18.9m)
LivingWell
Turnover: £52.7m (2004: £50m)
Operating profit: £4.2m (2004: £6.3m)

Number of hotels worldwide: around 400 in 78 countries

Hilton: 262
Scandic: 131
Conrad: 17 in 13 countries
Hilton Worldwide Resorts: 59 in 34 countries (37 operated by Hilton International, 19 by HCC, three by Conrad)
Coral by Hilton: four, all in the Dominican Republic
Hilton International Grand Vacations Club: 176 timeshares at four resorts in Scotland and Egypt
LivingWell health and leisure clubs: 86 in the UK and Ireland; nine/14 overseas in Australia, Germany, Turkey, Malta and Brazil.

Number of hotels in UK & Ireland: 78

Number of employees: more than 55,000 worldwide (UK: 15,000)

Strategy

"This transaction represents the final and logical step in a process that began in 1997 with the signing of our strategic alliance, and is a unique opportunity to once again position HHC as a global lodging industry leader for the first time in more than 40 years.

With the current strength of our business in the US, our strong balance sheet, the beginning of a hotel industry recovery in the UK - which accounts for about a third of HIlton International's income - and the success we've had in working together with HI for eight years on such programs as Hilton HHonours, Hilton Reservations, Conrad development and technology initiatives, the time is right to put tthese two great organisations together."

Source: HHC statement on agreement to buy Hilton International, December 2005

Chief executive

Ian Carter

Key directors

Group chief executive, Hilton Group: David Michels
Deputy group chief executive and group finance director: Brian Wallace
Senior vice-president, marketing Hilton International: Mike Ashton 
Senior vice-president real estate: Adrian Bradley
Senior vice-president, distribution & ecommerce, Hilton International: Tim Davis
President Hilton International, UK and Ireland, Europe & Africa: Wolfgang Neumann
President Hilton International, the Americas: Howard Friedman
President Hilton International, Middle East & Asia Pacific: Koos Klein
President Commercial Operations Group: Jürgen Fischer
Managing director, LivingWell: Patrick Fitzgibbon

Contact

Maple Court, Central Court
Reeds Crescent
Watford
Herts
WD24 4QQ

Tel: 020 7856 8000
Fax: 020 7856 8001

E-mail:
Website: http://www.hiltonworldwide.com

Commentary

Hilton, in common with many of its peers, is moving away from hotel ownership through a series of sale-and-leaseback and sale-and-management deals. It has also started up a fledgling franchising business in recent years.

The group has 43 new hotels countries lined up for the 2005 to 2007 period. UK newcomers include new Hiltons at Dublin Airport in 2005 and, in 2006, at  London Canary Wharf, London Tower Bridge  and Manchester Deansgate.

Hilton also plans to boost its worldwide resort network from 59 to 73 sites by the end of 2006, and to expand the number of luxury Conrad hotel by 50 properties by 2010.