Officials with Hilton say they see significant possibilities for Latin American properties to convert to one of the company’s two soft brands, and they also believe they can expand their portfolio of all-inclusive resorts in the Caribbean.
MIAMI—Hilton officials are looking to expand their footprint in Latin America and the Caribbean, not just because those areas have robust demand for tourism, but because they believe there is a multiplier effect from having a strong presence there.
“We see the area as one of strategic growth for us,” said Ian Carter, president of global development, architecture, design and construction for Hilton.
Carter noted the company has 130 hotels operating in the regions with another 90 in the pipeline. He said that portfolio currently runs a wide gamut of segments and brands.
“The vast majority of our brands either are in the market or will be in the market based upon the pipeline,” he said.
The company foresees both its soft-brand collections and the all-inclusive resort segment as opportunities for further growth.
Resorts and soft brands
Carter said his company is particularly interested in growing its portfolio of resorts, which he said Hilton will be able to pursue more aggressively since going asset-light in early 2017.
“We’ve got a lot of good stuff going on from a resort perspective, and (the Caribbean) is a really important region for that outside of the U.S. because of the inbound-outbound (travel),” he said. “And there aren’t just in-market investors, but cross-market investors from the U.S. into Latin America and other countries.”
Carter said Hilton already has brands that can “easily adapt” to allow for conversions of existing resorts. He said there are clear economic reasons why some resorts would want to tie into Hilton’s distribution and marketing systems.
“You see waves of investment in the Caribbean, meaning resorts are not always successful out of the gate,” he said. “(In) any kind of economic pressure or downturn, often an owner, developer or financier might look for the security of a strong international brand to bring some credibility to the asset.”
In the past, Hilton has leaned on Doubletree as a conversion possibility in those circumstances, but now with Curio Collection and Tapestry Collection soft brands in the stable, Carter said Hilton has a greater opportunity to “go to the owners who have assets that may well have a good identity but are just underperforming the market.”
Carter said those soft brands are “perhaps our greatest opportunity,” as they could be attractive to owners of assets with high distribution costs that lack the network effect of a company like Hilton.
Juan Corvinos, VP of development for Latin America and the Caribbean, said the company enjoys a high degree of loyalty from both owners and travelers in the region, which only increases the possibility of soft brand conversions.
Hampton growth will open more opportunities
Hilton officials said the growth of the Hampton brand can unlock several possibilities for the company by expanding the presence of its brand portfolio and eventually creating opportunities for lower segmented brands like Tru.
Corvinos said the need to establish Hampton more fully is what has kept the company from rolling out Tru in the region, even though competitor InterContinental Hotels Group is rolling out a similarly targeted brand in Avid.
“Tru is a fabulous fit in the U.S. in part because Hampton naturally migrated upward (leaving a space for a new brand),” he said. “But that doesn’t apply in Peru.”
Carter and Corvinos said each of Hilton’s brand go through a process of adapting their prototypes to fit Latin American and Caribbean markets while maintaining the aspects of the brand that are most important to their identity.