Simon Vincent is the area president of Europe, Middle East and Africa for Hilton Worldwide. He tells Janet Harmer why the company currently has the strongest pipeline of hotel rooms under development in Europe
The Middle East and Africa were added to your responsibilities last year as area president of Europe for Hilton Worldwide. What are the key challenges of looking after such a large area, involving 293 hotels and 47,000 staff across six brands in 49 countries?
The big challenge revolves around our growth and how we resource the business to handle that growth. For the past five to six years, there has been a major push on expanding the Hilton Worldwide brands internationally (following the acquisition in 2006 of Hilton International by the US-based Hilton Hotels Corporation).
How significant is the growth of Hilton Worldwide in the UK? The UK is the largest country outside of the USA for us and a very prominent market for the company - with 112 hotels, 24,000 rooms and 13,000 employees. Last year we opened 12 hotels. Even for such a mature market, we still have significant plans for further growth - particularly for the Doubletree and Hampton by Hilton brands. The Doubletree brand is a very attractive proposition, particularly for those looking to convert an existing property or hotel which needs some help in difficult times.
Which countries within your region are seeing the strongest growth? Southern Europe is challenging for us at the moment, especially Spain, Italy and Greece, but the United Arab Emirates and Saudi Arabia have a strong pipeline, with Mecca in particular seeing significant growth. Turkey and Russia are also key markets, with Turkey now having 30 Hilton branded hotels.
Some of the new markets - in Eastern Europe and former Soviet countries - have less-well established infrastructures and so we're having to forge close links with government agencies and universities in order to recruit staff and make hospitality a serious business contender for these areas.
Last year saw the opening of Hilton Worldwide's first dual-branded property in the UK: the Hilton and Hampton by Hilton St George's Park, the location of the Football Association's National Training Centre in Burton-on-Trent, Staffordshire. How are they are working out and do you expect to repeat the model? The hotels have been performing extremely well and it is definitely something we hope to repeat in the future. We've already identified several locations where we could combine two brands again.
As well as enabling a shared infrastructure to exist back of house, it provides the opportunity to offer guests accommodation at different price points, which is particularly useful when holding a large conference.
Elite sport has been the driver of business to the hotels, with all 24 England football teams - both men's and women's, from the U15s to the senior squad - using St George's Park as their training base. We've also had organisations such as Sport England and the Rugby Football Union stay while holding training, coaching and fitness camps.
The dual branding of the Hilton and Garden Inn hotels at Frankfurt Airport, which opened last year, proved to be one of the company's most significant developments, in terms of both rate and occupancy. It helps having the captive audience of the airport.
How will growth of Hilton Worldwide occur in the UK - will it be through owned, managed or franchised properties? We have only five owned hotels in the UK - the industry is now a largely asset-light model, providing shared risk with partners. Most of our new openings are split 50:50 between franchised and managed properties. The hotels at St George's Park are managed.
Is growth being held back by lack of available bank debt? There is still a lack of good-quality internationally branded hotels. Therefore, from a financial point of view, they are an attractive proposition. We're finding that if a project can be shown to be able to stand on its own two feet, then it will get the finance. And I think our significant growth shows that there is money available. However, investors are having to be more creative and are now looking for backers other than banks, such as REITs (real estate investments trusts) and private-equity companies. The strength of the Hilton name above a hotel is a great attraction - highlighted by the fact that one in five hotel rooms currently under construction in Europe will belong to a Hilton-branded property.
Why does the Hilton name remain such an attractive proposition to developers and owners? Our people are our number-one asset and through living and breathing hospitality they provide the best guest experiences and reasons for people to visit our hotels. We work to keep pace with our guests' changing needs, whether that be through mobile technologies or our global sales, marketing and distribution capabilities, particularly our award-winning loyalty programme, Hilton HHonors.
The strength of our consumer brands is also key to our continued success - with Hilton being the most famous hotel brand in the world. Newer brands to Europe, such as Hilton Garden Inn, are also picking up plenty of accolades, taking first place in the JD Power & Associates' European Hotel Guest Satisfaction Index Study - in the first year the brand was established enough to qualify.
Moreover, our owners - who often have multiple hotels and brands with Hilton Worldwide and are willing to invest in our brands - are the reason we have an industry-leading pipeline.
How good was 2012 in the UK for Hilton Worldwide, and what are your forecasts for this year? We don't publish any figures as we are a private company. In the lead-up to the Olympics, our figures were down, but we had a stellar performance during both the Olympics and Paralympics. So this year we expect to bounce back in July, but August will be more challenging. Overall, we predict our figures will be up in 2013, although London has been a little soft so far this year. In most markets we have broadly returned to the business levels before the crisis.
How significant was it to have the London Hilton on Park Lane as the official hotel of the International Olympic Committee (IOC)? Of course, it was a massive vote of confidence in the Hilton brand. The IOC was delighted. The team at the hotel did an absolutely outstanding job. The planning - which started from the moment London won the bid in 2007 and continued all the way into the period of the Olympics, in terms of staff, supplies and security - was phenomenal.
You were appointed the inaugural chairman of the new Hospitality Guild last year. What is the philosophy behind the guild and how is it progressing? The concept is rooted in the ancient craft guilds, brought into the 21st century, with the aim of providing one voice for professional development within the industry. This will be achieved through the bringing together of industry associations and professional bodies, to champion skills development and simplify access to information about training.
It has 23 partner organisations under its umbrella, such as the British Institute of Innkeepers and the Academy of Culinary Arts. Hugely significant will be the opening this summer in East Finchley of Hospitality House as a state-of-the-art training and meeting facility. The guild has a 20-year lease on the building (seven of which have been donated by McDonald's), which will act as an iconic symbol of the industry's belief and support of its people.
I'm very optimistic about the future of the guild as it replaces what was previously a very fragmented approach to professional training within hospitality.
With your background as former chief executive of Opodo, the online travel agency (OTA), how important are OTAs to the business of Hilton Worldwide?
In terms of total revenue, 50% of our guests book through our call centres and hotels, whereas the other 50% mostly book via our website and offline and online travel agents (OTAs). We remain committed to further growing our win-win partnership with leading OTAs, aiming to complement our direct distribution and support development in merging markets.
How are you developing Hilton Worldwide's direct online business?
We are enhancing the online customer experience on our brand and property websites all the time, from an aesthetic, functional and interactive perspective - while our Best Available Rate Guarantee ensures we remain competitive from a price perspective. The most exciting aspect of our online business is the use of mobile devices, which is enabling greater direct engagement with consumers, while also being an increasingly important booking tool. Recognising this, Hilton Worldwide launched a series of iPhone applications in November 2009 that now includes a portfolio of chain-specific apps.
With 23 hotels in the UK currently under development, how will you ensure your will have the right staff to grow the business? We have a well-established recruitment framework, with at least one HR representative per property who supports recruitment and retention of team members. It is our job to convince young people that hospitality can provide a very broad and rich career, both in terms of diversity and geography.
We are increasingly using social media channels - particularly in the key growth markets of the UK and Turkey to create an employer brand. Our Twitter feed (@HiltonCareers) provides regular updates on Hilton Worldwide jobs and also provides career advice.
As well as working with Bournemouth, Surrey, Sheffield and Oxford Brookes universities, we established the Hilton Apprenticeship Academy last year, which is creating more than 100 opportunities for individuals across a range of disciplines. It is building on the success of our Chef Apprenticeship Academy, which has trained more than 60 apprentices since 2010. We also have the Elevator programme, which nurtures talented graduates and high-potential candidates within the company through an 18-month training programme.
How confident are you of the hospitality industry's role in the wide economy?
The hospitality industry is often at the forefront of any economic recovery, by providing youth employment and stimulating growth. Hospitality is often the lead indicator of the economic well-being of a country. Cycles of revenue per available room (revpar) growth tends to mirror GDP of a country and wider economic growth cycles. The sector has got a big role to play, especially around youth unemployment - but it also has a role to convince people that hospitality can be a serious career for people, rather than just being a place to work while considering another career. The industry has become a lot more professional, providing the opportunity for a long, diverse and prosperous career.
SIMON VINCENT CV
Simon Vincent spent the early part of his career in international banking with HSBC. He moved into the leisure and travel industries 20 years ago, spending 13 years at the Thomas Cook Group, latterly as chief operating officer of the UK travel division.
Prior to joining Hilton Worldwide in 2007, he was chief executive of Opodo, the online travel agency.
Vincent's first appointment at Hilton Worldwide was as president of the UK and Ireland, before a global restructure saw him take on a European-wide role, followed by the promotion in September 2012 to president of Europe, Middle East and Africa.
He now reports direct to the company's president and chief executive officer, Chris Nassetta, and sits on the company's global executive committee.
HILTON WORLDWIDE IN THE UK
Number of hotels : 112 (23 in pipeline)
Luxury (0) Waldorf Astoria Hotels & Resorts â¨
Upscale (4) Hilton Hotels & Resorts
Doubletree by Hilton (6)
Focused service Hilton Garden Inn (1)
Hampton by Hilton (12)
Timeshare Hilton Grand Vacations (0)