Despite the challenges, expanding in the Asia Pacific region can offer significant growth opportunities for a hotel chain like Hilton. Travel companies are continuously investing in the region due to its rapidly growing middle-class population and increasing tourism.
Hilton has an ambitious goal to expand its portfolio in the Asia Pacific region from 627 hotels to 1,000 by 2025.
The hotel company’s president for Asia Pacific, Alan Watts, expressed confidence in achieving this target, citing the significant number of hotels already in the construction phase – around 500.
In fact, Watts said the target for 2025 could be revised up: a goal of 1,000 operational hotels and an additional 500 under construction that year.
For comparison, in March of this year, Marriott International announced the opening of its 1,000th hotel in Asia Pacific.
However, Watts said the true test for the hotel brand, said to be one of the fastest-growing hotel companies in the Asia Pacific region, lies in effectively managing the hotels and ensuring their ongoing success.
Social Media Marketing
As Hilton gears up for the openings, it recognizes the importance of effective marketing to drive business.
Watts highlighted the shift towards personalized approaches in marketing: “Billboards have evolved into short YouTube ads,” he said.
Social media platforms have played a crucial role in expanding Hilton’s ecosystem and engaging with a broader range of individuals. The company now relies on algorithm-driven marketing techniques that ensure personalized experiences for each customer.
By leveraging data-driven insights, Hilton tailors its messaging to suit the preferred language and channel of its audience, effectively communicating through platforms like WeChat in China and WhatsApp in India with members of Hilton Honors, its loyalty program.
Watts also acknowledged the growing power of social media influencers and celebrity endorsements in the Asian market.
“These influencers not only provide validation and recommendations to their followers but also serve as aspirational figures,” he said.
In India, influencers wield significant sway, with Bollywood and cricket stars adding to the allure through their associations with various brands.
Actress Anna Kendrick has been the face of Hilton’s revamped rewards program. In addition to this, last year the hotel company also released a commercial featuring Paris Hilton, something she had never done before.
Hilton this year launched a marketing campaign showcasing their connected rooms feature, featuring Grammy-Award winner, Brandi Carlile.
This trend is evident as other major players in the industry, such as Qatar Airways and Accor, have roped in renowned Bollywood actresses Deepika Padukone and Katrina Kaif as brand ambassadors, respectively.
Even online travel companies in India, such as MakeMyTrip, have brand campaigns featuring actors Ranveer Singh and Alia Bhatt.
And with Hilton set to open doors to a Waldorf Astoria in Jaipur, a celebrity wedding would be the oh-so-perfect endorsement to kick off the opening.
The introduction of the Waldorf Astoria brand in Jaipur, India, adds to Hilton’s efforts to expand its presence in the region.
Hilton aims to tap into the luxury wedding and meeting markets, as well as luxury leisure travelers, with this new venture. The company’s luxury portfolio in Asia Pacific has been growing steadily, with more than 10 signings last year, including the entry of Waldorf Astoria into Australia, Malaysia, and Vietnam.
Franchise Model in Asia
Hilton’s expansion in Asia has been further accelerated by its large-scale franchise model launched in 2021.
Franchising is gradually gaining momentum in Asia, particularly in single-unit franchising, and the region’s franchise laws and protections are evolving in response to this emerging trend.
Hilton is embracing franchising in various Asian countries, including Thailand, China, Japan, Korea, and India, as it aims to provide a diverse range of brands deployed in the region.
Drawing insights from the well-established franchising models in the U.S. and Europe, Watts says Asia is poised to follow a similar trajectory.
“At some stage Asia will see more franchised hotels than managed, a diverse range of brands deployed in the region, and the rise of third-party white label management companies acting on behalf of both brands and owners,” said Watts.
Watts also emphasized the importance of Hilton’s direct booking channels, which include websites, the mobile app, the worldwide sales team, and contracted business.
These channels play a significant role in driving a majority of bookings for Hilton, he said.
Hilton has 7,000 hotels worldwide and Watts said that heft enables the company to secure lower commission costs in OTA partnerships compared to smaller independent hotels.
However, Hilton’s direct booking strategy doesn’t solely rely on scale and cost efficiency. The hotel brand places immense value on its loyalty program, Hilton Honors.
Marriott Bonvoy had earlier also noted that its loyalty program has been driving a new wave of growth in Asia.
Watts revealed that in India, despite being one of the smallest hotel companies with 24 operating hotels, Hilton already boasts 1.5 million Hilton Honors members, which may get a boost from the launch of the Waldorf Astoria in Jaipur.
This trend is observed across various markets, where business travelers, in particular, actively collect loyalty points to redeem for stays at luxurious properties.
Hilton currently has a partnership with American Express in the U.S. and Japan, and the hotel brand plans to replicate this model with other fintech partnerships in various markets across Asia Pacific.
“Additionally, we will continue collaborating with airlines to expand the options available for point redemption,” says Watts.
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Photo credit: The Conrad Jiuzhaigou in Sichuan China.