Marketing Week (MW): How is Hilton Worldwide structured as a brand management organisation?
Paul Brown (PB) We have 10 brands and I have seven brand managers. Their responsibility is classic brand management – define what the brands are and market what the brands are to our consumers. Since a lot of our brands are franchise brands, they are also responsible for the owner relations side – working with those that actually own our products. We group our brands into three categories: luxury, full service and focused service.
MW: What is the value of branding to Hilton Worldwide’s business?
PB: We are a branding company, and that is how, ultimately, we make our money. When someone decides to become a franchisee, they are paying for the brand, the asset itself, the name on the building and all the marketing that comes with it. If you look at where and why we outperform our competitors, a lot of it is because on the revenue side we have a higher market share, which comes down to the equity of the brand and the support behind it. Within that, marketing is seen as an extremely significant function in the company and we continue to invest.
MW: How measurable are the returns from Hilton Worldwide’s marketing?
PB: About 60-70% of our marketing spend is direct response marketing spend, meaning I can tie the dollars out the door to specific transactions or revenue sources. A large portion of that spend is search marketing, or online marketing, which is infinitely trackable; or marketing related to the HHonors programme.
MW: What plans do you have for the future development of the Hilton Worldwide brand?
PB: We have been going through a comprehensive branding process called Hilton 360, which is driven by a tremendous amount of quantitative and qualitative research.
Out of that has come a very clear path for the Hilton Worldwide brand, and a revised plan for where we are investing our efforts in the brand – around the room, around food and beverage and around certain other service elements.
MW: How have your responsibilities been affected by reuniting the US and international businesses?
PB: We have been very focused over the past three years on reuniting the company and the brand under one common culture. Reorganisation has been part of that, and forming new management teams in many cases, so I spend a lot of my time communicating with team members, owners and vendors about what Hilton the company is trying to accomplish.
MW: What are your predictions for the hospitality sector this year?
PB: Financial centres like London and New York have remained relatively strong, and that is expected to continue. The government centres, like Washington DC, tend to remain strong, while China is continuing to grow significantly. As an industry we expect to perform better than the economy and most people are predicting a better year this year than 2010. It is expected that prices will continue to increase, so the revenue growth will not be just led by more people travelling, but by those people paying more.
CV Paul Brown
President of global brands and commercial services at Hilton Worldwide
President of Expedia in North America. Previously president of Expedia’s partner services group and senior vice-president of strategic planning
Partner at management consultancy firm McKinsey & Company
President and chief operating officer at relationship management company Thinkologies
Senior vice-president of brand services at InterContinental Hotel Group. Previously
vice-president of strategic planning
Manager at The Boston Consulting Group
Senior consultant at Andersen Consulting. Previously a consultant for the same company