Hilton reunites hotel brands

Hilton International expects to increase profits by "tens of millions of dollars" following its long-anticipated announcement of a worldwide alliance with Hilton Hotels Corporation (HHC).

The reunion of the Hilton brand - for the first time in 32 years - was carried out in order to grow revenue rather than cut costs, David Jarvis, chief executive of Hilton International told Caterer.

The agreement involves jointly marketing and developing Hilton worldwide. "A reunited brand will enable both parts of the alliance to grow," said Mr Jarvis. He added that no redundancies were planned as a result. "It is a positive step that will maintain the worldwide position of Hilton hotels. We will get all the advantages you would see from a total merger."

HHC's loyalty programme will be extended to Hilton International's hotels and a jointly owned company will be set up for sales and marketing and to design a single logo.

The two companies will also take 20% of the profits of each other's hotel developments in exchange for a 20% contribution to any required capital investment.

A new mid-market hotel brand destined for under-developed markets is also under discussion. India and China have been singled out for the three-star brand, which may be given a local name. European development of the brand will be restricted to central and Eastern Europe.

Hilton International reported increased underlying profits up 23% to £70m on turnover of £914m for its first six months to 30 June 1996. Hotel occupancy increased by 0.9 percentage points to 68.1% and revenue per available room (revpar) rose 7% to £49.10.

UK hotels had a strong first half with revpar up 18% in London and 17% in the provinces. Profits in the UK were up 16% to £38.9m.