Hilton strengthens push to grow through franchising
Hilton's program includes:
- A booklet that outlines its principles of franchising and doing business with franchisees, which describes the company's policy toward areas of protection.
- A contract written in easier-to-understand language. "The scary thing is you know exactly what you're getting into now," jokes William Fortier, senior vice president of franchise development.
- An updated application package.
- A website, hiltonfranchise.com, dedicated to franchisees with license applications, extensive architectural plans, photos and FF&E specifications. By the end of the year, sites will be rolled out for Doubletree, Embassy Suites, Hampton Inn & Suites and Homewood Suites.
"We have taken the best of both franchise relationship programs following the merger of Hilton Hotels Corp. and Promus Hotel Corp. nearly a year ago and have created an entirely new and better program focused on meeting the needs of current and prospective franchisees," says Tom Keltner, Hilton executive vice president and president of the franchise hotel group. He says the package is designed to emphasize Hilton's commitment to being the most owner-friendly hotel company.
Hilton execs are clearly most excited about the potential for the website. "This is a pioneering effort that puts a tremendous amount of valuable information in our franchisees' hands at the click of a mouse," Fortier says.
The company is also extending its drive, launched last January, to broaden the distribution of Homewood Suites. The brand, relaunched as Homewood Suites by Hilton to capitalize on Hilton's brand awareness, is getting a boost from a package of incentives for developers. Among carrots offered: application and royalty fee reduction, payment of the first year's salary for a director of sales and a preopening marketing budget. Hilton also introduced a less-expensive prototype.
"We wanted to prove we were hell-bent on developing the brand," says Jim Holthouser, senior vice president of brand management for Homewood.
Franchisees apparently got the message. By the end of March, Holthouser says, Hilton had approved as many new Homewoods as it had during all of 1999.
"It is such a nice product," Holthouser says. "But the problem is it has been too expensive (to build) relative to the competition." The latest generation—with a more economical lodge area and more flexible land requirements, but the same square footage and amenities in the suites—has addressed that concern.
With 92 Homewoods open and 15 under construction, the brand is starting to generate better awareness among consumers. Adding the Hilton name—and HHonors program—hasn't hurt, either. Holthouser says belonging to HHonors has added three points of incremental occupancy to the Homewoods that are open.
The incentives were originally scheduled to run through the end of 2000, but have been extended through the end of next year.
By Megan Rowe
Managing Editor, E-Hospitality.com