Front Desk

More Questions Than Answers With Hilton's Move

Hilton's cross-country move from Beverly Hills to the D.C. area will make the nation's capital also the center of the hotel world. Once the move comes later this year, the area will house Marriott (in Bethesda, MD), Choice Hotels (Silver Spring, MD) and soon-to-be Hilton. The move isn't a total shock: CEO Christopher Nassetta is an Arlington, VA native and used to head Host Hotels & Resorts in Bethesda; Hilton, like all hotel companies, is struggling because of the economy, the crumbling credit markets and diminished travel worldwide; and the fact the Blackstone Group is no doubt facing high debt service costs after buying Hilton at the peak of the market almost two years ago for $26 billion.

Hilton is reportedly looking at suburban locations in Virginia and Maryland, although you'd have to figure Virginia might be a preferred option since two competitors already reside in Maryland, not to mention Nassetta's familiarity with his home state. More than 500 employees work at Hilton's current headquarters and surely many will be offered the chance to relocate. Certainly many lower-level employees won't consider that, meaning the company should shed some of its workforce. Whether Hilton fills those spots immediately remains to be seen, and if so, will it look to nearby industry neighbors? A better question might be whether this indicates Blackstone might be looking to shed some Hilton brands (Doubletree maybe?)?

Hilton Garden Inn will not be making the move to D.C., according to the Memphis Commercial Appeal, as the brand will instead join Embassy Suites, Hampton Inn, Hampton Inn & Suites and Homewood Suites in Memphis. That office is already home to Hilton brands such as Embassy Suites Hotels, Hampton Inn and Hampton Inn & Suites and Homewood Suites by Hilton. The story also indicates some more back-office operations will join the bulk of the shared services hub in Memphis.

I wonder why this move wasn't announced next week at one of the industry's biggest events: the Americas Lodging Investment Summit in San Diego, coincidentally hosted by one of Hilton's newest and biggest properties, the Hilton San Diego Bayfront? Or after, as to avoid taking some of the limelight from Hilton's big development announcement coming Monday?

More questions than answers, I know. Hopefully that changes next week at ALIS.

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