On Hilton Worldwide’s first quarter 2015 earnings call yesterday, analysts grilled CEO Chris Nassetta on whether the company had potential interest in acquiring Starwood Hotels & Resorts. In advance of its own earnings call, Starwood had announced its intentions to explore strategic and financial alternatives, fueling speculation about a possible sale.
While Nassetta expects increased industry consolidation over the next 12 to 24 months, he said Hilton is in a good position with solid first quarter results and strong expectations for the year. “We have amazing opportunities with the brands that we have in our portfolio today and the opportunities we have to add to that portfolio of brands to drive industry-leading, organic net unit growth, which in my opinion is the best way to drive the highest value for all of our shareholders going forward,” he said on the call.
Nassetta emphasized the company’s organic growth strategies, such as the launch of two new brands in 2014, Curio Collection and Canopy. He added that Hilton has an opportunity to create an entry-level brand with a lower price point in place of Hampton, which has moved up to the upper-midscale segment. The new brand, which the company could introduce in the next 12 months, would allow Hilton to capture customers earlier in their lifecycle, he said. “This could be among the largest brands by hotel count that we have, and I think will be a very powerful driver of bringing new customers in and continuing to build loyalty.”
