Mango House Seychelles

In the second part of our exclusive series, we uncover how development activity has dropped at the hospitality powerhouse behind the Waldorf Astoria, LXR and Hilton brands.

Covid19 has rocked the hospitality sector to its core, and the top six hotel companies – Marriott International, Hilton Worldwide, Accor, IHG, Hyatt Hotels Corporation and Radisson Hotel Group – have had to overcome extraordinary challenges over the last 18 months. Here, we consider how the crisis has affected the situation on the ground at one of the industry’s biggest players, Hilton.

This Virginia-headquartered group currently has more than 6,600 properties in 119 countries and territories globally across 18 brands, including Waldorf Astoria, LXR and Conrad in the luxury space, and Hilton, Curio Collection and Tapestry Collection in the full-service category. But this extraordinary footprint caused enormous headaches for management at the New York Stock Exchange-listed company when Covid19 hit and many of its biggest markets introduced temporary lockdowns, travel bans and curfews.

Hilton’s pipeline drops by 11%

What this data shows is that Hilton had 748 hotel schemes on the go as of 30 April 2020 when Covid19 was crippling key markets in North America and Europe. This figure then fell steadily throughout the rest of 2020 – standing at just over the 700-mark as the new year began – before tumbling further to a record low of 669 as of 4 October 2021.

All of which means that the number of Hilton projects in progress has shrunk by 11% since Covid19 took hold – the second biggest drop across the top six hotel groups, behind only Marriott (-12%). Not all of this downturn can be attributed solely to coronavirus, of course, as company bosses need to take so many factors into account when deciding whether to proceed with new schemes. However, it’s fair to say that in normal trading conditions, we’d expect a hospitality giant like Hilton to be growing its development slate rather than reducing it, using the company’s ready access to financial markets to sign an increasing number of new projects with the aim of boosting investor returns.

Notable highlights from Hilton’s development slate

We probably ought to point out at this juncture that Hilton is actually still completing plenty of schemes amid the pandemic. To take just a few prominent examples, the doors were recently thrown open at Mango House Seychelles, LXR’s debut property in the archipelago; Canopy by Hilton Madrid Castellana, sporting a red theme highlighting Madrileño culture; and Almenat Hotel, a Tapestry Collection scheme with its very own bowling alley in Greater São Paulo.

In addition, it’d be wrong to infer Hilton isn’t introducing anything new to its books. A quick dive into the TOPHOTELPROJECTS construction database, for instance, shows several noteworthy projects have been added in the last few months alone, including Conrad Los Angeles, set to become the luxury brand’s inaugural property in California; and La Festa Phu Quoc, Curio Collection by Hilton, a stylish Mediterranean-inspired scheme in South-East Asia. Yet these are the exceptions rather than the rule.

Hilton remains wary

The key takeaway from all this is that Hilton’s resisting the temptation to commit to lots of new hotel development activity. It’s still signing fresh projects, admittedly, but the rate at which more schemes are being added to the pipeline is significantly lower than the pace at which existing ones are being realised.

Given that more people are getting vaccinated with every passing month, and better Covid19 treatments are significantly improving medical outcomes around the world, hope is rising that the worst of this unprecedented crisis may soon be behind us. Consequently, it’ll be interesting to see when Hilton’s management decides to start investing in new development on the scale that we saw before the pandemic – or if this new risk-averse approach is here to stay.

Click here to read our exclusive Q4 2021 Covid development update series in full: Marriott International | Hilton Worldwide | Accor | IHG | Hyatt Hotels Corporation | Radisson Hotel Group | Marriott and Hilton slumps hit pipeline

Many TOPHOTELNEWS articles draw on exclusive information from the TOPHOTELPROJECTS construction database. This subscription-based product includes details of thousands of hotel projects around the world, along with the key decision-makers behind them. Please note, our data may differ from records held by other organisations. Generally, the database focuses on four- and five-star schemes of significant scale; tracks projects in either the vision, pre-planning, planning, under-construction, pre-opening or newly opened phase; and covers newbuilds, extensions, refurbishments and conversions.

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