Hilton President and CEO Chris Nassetta said a lot on the Skift Global Forum stage. Most notably, he advocated for U.S. lawmakers to compel third-party distributors to display resort fee and other junk fees upfront on a consumer's first search.
Christopher Nassetta, president and CEO of the hotel giant Hilton Worldwide, last week highlighted his company’s move to display mandatory fees, such as resort fees, upfront when a consumer first searches on the group’s website and app.
But Nassetta also called for national legislation to ensure “an even playing field.” He wants online travel agencies and price-comparison sites to be required to display resort fees and other junk fees upfront.
Nassetta made the comments at Skift Global Forum 2023 in New York City on September 26. [See the video and transcript below.]
Nassetta also discussed his top few goals as chairperson of the lobbying group U.S. Travel; his views on whether we’ve hit “Peak Alternative Accommodations”; and his thoughts on Hilton’s new brands, including economy brand Spark. (Hint: He wants to take advantage of what he called a giant, decade-long opportunity in the mid-market.)
Chris Nassetta: I was saying to Rafat and Sean, I love this event. It’s my favorite thing to do
every year. Thank you for having me.
Sean O’Neill: We’re really grateful you’re here.
Nassetta: I always love seeing you bring these potato-chip chairs everywhere you go. I think I sat in these same chairs at Jazz at Lincoln Center and at the TWA Hotel [past venues for Skift Global Forum].
O’Neill: We’re taking audience questions. So if you want to use the app, we’ll get to them at the end.
Nassetta: You didn’t tell me about that. It’s a good surprise. I like audience participation. How’s
everybody doing today? Good? Got energy? Did they open the bar yet? No? I tried. I tried to do you a solid. I said, listen, if you want me to talk at five, you need to open the bar at four. Right? Because it’s late in the day.
O’Neill: You know, earlier this month, Delta Airlines said they wanted to have a new strategic officer. They chose Tom Brady, the footballer. And I’m wondering whether Hilton is considering hiring a strategic advisor. Maybe Taylor Swift or Beyoncé.
Nassetta: [Delta CEO] Ed Bastian’s a friend of mine, and I watched him on CNBC. I texted him afterward because he didn’t get a lot of air time on CNBC. Did you see that? I’m sorry. It was like all Tom Brady. Nobody was interested in Ed, which made sense to me. You know, Ed’s a good-looking guy, but Tom’s a lot better-looking and has some pretty good rap with him, too.
So we already have our own celebrity strategic advisor in Paris Hilton. Paris is, you know, it’s a long story. Obviously, we share a name for many years, the family, when they sold the business, when I came in, it was a public company. The family owned a big chunk of it. Paris didn’t own any of it, but the
So the Hilton family has not been involved in the ownership of the business for a long, long time. But we share a name. And Paris is an unbelievably thoughtful, intelligent, engaging, and popular person, who happens to not only have our name but loves Hilton, and she stays in Hilton. She grew up in Hilton Hotels, all of our brands. She stays in them all of the time. And so, like 5 or 6 years ago, I said to my team, I’m like, this is crazy. I had met Paris a few times, and I said, This is sort of crazy. Like she’s popular. She’s young, you know, she’s part of this pop culture. I mean, she’s started a lot of the influencer thing. If you go way back, I mean, I think Kim Kardashian and the others were all sort of on the heels of Paris Hilton.
I said, So why? Why would we not lean into that? And so, like five years ago, we started … she did become, I wouldn’t say, you know, technically a strategic advisor, but she’s become that, and she does a whole bunch of stuff with us. You see her in some of our campaigns that we do on social and on, you know, on TV. And she works with us on a bunch of our lifestyle brands and sort of helps give us advice. She connects us to her whole ecosystem of people and she’s a lot of fun.
Example in point, literally last Friday, I had dinner with her. Last Thursday night, she was in town, and she said, I’d like to have dinner. She was in town because she agreed to come join me for a town hall at our global headquarters. Very cool. And she was there. And our people, like everybody, just happen to love the Paris Hilton.
So I literally had Paris Hilton flipping burgers with me last Friday afternoon after the town hall out on our patio. And it was awesome. So she not only does ads and DJs for us and advises us on lifestyle, but she flips burgers at the Hilton Worldwide headquarters.
O’Neill: That’s awesome. I love that story. So I’d like to start with a couple of big-picture questions and then get into Hilton’s strategy. So earlier this year, you became the chairperson of U.S. Travel, and we’ll be hearing later at Skift Global Forum from the CEO of U.S. Travel…
Nassetta: Yeah, Geoff’s [Geoff Freeman] here tomorrow.
O’Neill: He’ll get into the details on the agenda.
Nassetta: So no, I’m not going to steal all of his thunder…
O’Neill: What would you say is the scale and impact of the travel industry?
Nassetta: Well, the scale of it, I mean, many people don’t know this — I’ll talk about U.S. Travel — but I chaired the World Travel & Tourism Council for three and a half, four years. And U.S. Travel has a similar sort of objective, which is, in the case of U.S. Travel, to increase travel to and within the United States, recognizing that it is a huge driver of economic growth. It is, you know, a high single-digit percentage when you take the whole ecosystem of GDP both here in the US and around the world and a similar percentage in terms of employment.
One of the fastest growing is like one in like five new jobs in the world has been in hospitality and in travel and tourism and similarly here in the United States. So, you know, this is a very impactful business, as those of you who’ve participated in it know.
I mean, I would say the reason I’ve been involved — whether it was WTTC or now U.S. Travel — and while we’ve certainly made a lot of progress…. If I go back in the long history I have in the industry, nobody understands that, right? Because all the oxygen gets sucked out of the room with whatever it is, technology sharing, the sharing economy, private equity… And so, people don’t think about travel and tourism as not only a big, big business and a big employer but a very fast-growing business. And I’m not just saying coming out of Covid. I’m saying before Covid, globally, travel and tourism was one of the fastest-growing industries on Earth.
So that’s a wind-up to the primary thing that we are trying to do is obviously increase travel to and within the United States. The first part of that job — which Jeff spends a huge amount of time on and you’ll hear about it, and I spent a lot of time with him on it — is building credibility. So in the end, we’re advocating for the industry to make changes largely through the federal government, but also state and local governments to make the system work. And if people don’t understand how important and impactful we are, then it’s not you can’t be as effective.
I used to say — I’m looking at the age of the crowd, sorry, I’m going to show my age — 20 years ago we were like the Rodney Dangerfield field of industries, right? “I get no respect,” right? Nobody thought about it. Today, it’s better because not just me but a lot of us in the industry have done a lot of work. And I think legislators broadly know, the business community understands it, but we still have more work to do.
So a lot of our effort is in Washington and elsewhere to make sure people understand the breadth and depth of the impact and the power, the positive impact and power of travel and tourism.
And then it’s on very specific things to make the pie bigger. Geoff will talk about a few of them.
Getting visa wait times down, which we’re working very closely with the Biden administration on, and they are doing really good work. I give them a lot of credit. We were getting up to in a lot of markets, 500 or 600 days in wait times in markets like India and Brazil and a whole bunch of other big destination markets. So that’s important.
What happens at the border? That we have an experience that is welcoming and hospitable to all. I know a little bit about being hospitable in the business I’m in. That you don’t have these long wait times. So that’s technology, that’s staffing, those sorts of things.
And then once they’re in the country, how do you get them around? How do you make sure that you have the destinations promoted so that when people come here, they have places to go and they know where to go, that you have the infrastructure? Right?
We just passed a $1.3 trillion infrastructure bill, you know, during Covid. How do we make sure that we’re advocating for our industry that when that $1.3 trillion — it’s really $1.6 trillion when you add all the pieces of it up — that that gets allocated in a way that the investment there is in not just highways and bridges to get, you know, to get people around, like airports and ports and other forms of infrastructure, you know, that that help our industry?
Then the last thing would be workforce.
You know, it’s getting a little bit better, but even pre-Covid, we all know in our industry it’s hard to be able to, you know, get the workforce you need to deliver the service that that people want in all parts of the ecosystem.
And so we’re working with the administration and advocating for a really sensible immigration policy, visa policies to be able to get not only the workforce from out of the people that are here but make sure that we can get the people that we need in the country, even if it’s on a temporary basis, to be able to serve our customers.
So those are some of the big things. And it’s a labor of love. I mean, I had a few people last comment say to me like, ‘You’re a busy guy. Why would you do that? Like, why would you do WTC?’ And I said, ‘If everybody had that attitude, our industry would really suffer. This industry has done a lot for me. I mean, it provided opportunity beyond my wildest dreams as a kid who wanted to get into the industry, and I should do everything I can to give back and I should do everything I can to work with others in the industry to advocate for the industry, be, you know, making the pie bigger is not, or shouldn’t be, a competitive exercise. That helps everybody.
Now, how that pie gets allocated? You know: I’m fiercely competitive about the pie and where the slices go. I want Hilton to have a bigger slice than our competition. But making the pie as big as we can is in everybody’s interest, and we should all do our part.
O’Neill: When you say that, it just makes me realize I wish there were more people in public service who were sort of as eloquent and strategic thinking as the Chris Nassettas of the world. We would be in a little bit of a better place.
Nassetta: Perhaps doubtful. Doubtful if you had me in public service.
O’Neill: I’m from Washington, D.C.. You’re in Northern Virginia.
Nassetta: So yeah, I’m in the D.C. area, born and raised. Other than for three years, when I was in Beverly Hills, which my wife affectionately calls our Beverly Hillbillies Days.
O’Neill: I love that. In DC, as you know, we have sort of a local saying, which is: “If you don’t have a seat at the table, that means you’re probably on the menu.”
O’Neill: And so it’s reassuring to hear that U.S Travel is sort of getting a seat at the table.
Nassetta: Indeed they are. You’ll see if you’re here tomorrow, Geoff, he’s an extraordinary executive. He does all the real work. I help provide some strategic guidance, and obviously, I have a lot of connections in D.C. and otherwise that I help as best I can with. Geoff’s a really great leader.
O’Neill: One regulatory issue before we move on. So mandatory fees at hotels — how they’re displayed: how would you like to see that issue evolve?
Nassetta: Listen, as you reported on in the last couple of weeks,
O’Neill: The Skift Edit team has been covering…
Nassetta: Yeah, your team reported that we’re going to give total transparency. You know, we had given transparency. We’re going to go over and above. And a bunch of our competitors guys have been doing the same thing. In the end, we don’t want consumers confused about what they’re buying or what they’re paying for what they’re buying. There’s no advantage.
The issue in our industry, though, is complicated. Okay? Because, as you know, we tend to sometimes be our own worst enemy. You have different people doing different things. Now, most of us in the hotel space, most of us are sort of going to the right place.
But the problem is a lot of our products are distributed through third-party distribution channels.
You’re going to have some of them here tomorrow. So whoever is talking to Peter [Kern, CEO of Expedia] and others, actually Peter is terrific, and ultimately, I think they have a very constructive view. But the OTAs and more importantly, metasearch, we all have to be in the same place. It doesn’t really matter if Hilton shows it the right way, because if everybody — not everybody, but a large component of the population — is starting in Google to do comparison shopping, they’re going to get a belief that it’s misleading, they’re going to get misled before they ever get anywhere near us.
So my view is: an even playing field. If you’re going to the product, is the product, no matter where it gets distributed, it should be displayed the same way. And so we need… there is legislation… Amy Klobuchar, who leads, is co-leader of the Travel Caucus in the Senate, has proposed, along with a lot of others, [a bill] that would do this. We are super supportive of that. I don’t know, in the world we’re living in DC right now, with so much swirl, if that is going to be a top priority.
But I hope it will be. The administration has obviously been focused on this. I mean, it was in the president’s State of the Union address. I would say that suggests a decent amount of focus, and so what we need is either through legislation or just all of the other platforms kind of doing what we’ve done, which is just do the right thing, do what’s right by customers.
We need everybody in the same place. And so we are going to continue to advocate. We’re already in the process of doing it ourselves. We’re going to continue to advocate to say, make it consistent across. The product, no matter where it shows up, should be displayed consistently. Okay?
O’Neill: So you’re a CEO of a Fortune 500 company. You like data. I’m a reporter. I like “anecdata,” sort of like little anecdotes that are kind of like data. It feels like right now that there’s this moment where it feels like we’re reaching Peak Alternative Accommodations in a sense. Not in terms of hard numbers of bookings or share, but in terms of momentum and the mojo of it. And it seems like hotels are getting their cool factor back to a certain extent. Would you agree that we’re sort of we’ve kind of hit Peak Alternative Accommodation?
Nassetta: I don’t know. Okay. I mean, I do like data, as you point out. I just don’t have all that data set in my head. I will say this, and I and I’ve been saying this for ten years, and I’m not always right. I’m not that guy, but I have been right on this. And you and I have talked about this, which is, you know, all the accommodations is just a different thing.
Obviously, as that business was growing and it was a nascent business, they were going to have skyrocketing growth as they created efficiency in a business that had been around for time and eternity but that was highly inefficient. And so like any industry that is creating that kind of scale and efficiency, you are definitely going to plateau at some point. So I don’t have the data. I’m not going to say it has to be happening or plateauing at some level or whether it’s flatlining. The growth rate clearly at some point has to come down, and I suspect that it is.
But in the end, what they do and what we do are different. I mean, I like to hear you say the hotels getting its cool factor back. I don’t think we ever really lost it. I mean, I’ll give you an example. I sat three weeks ago, maybe four weeks ago. I do this. I love focus groups. Hopefully you maybe some of you guys have been been behind the behind the glass. But I do them all the time. I drive my team crazy because I like people and I feel like I can’t really understand data purely through data. I need body language. I need ‘what are people’s eyes’? How are they gesticulating? Like, there’s just so much more to the story.
And so I sat for 12 hours over three days and nights because, you know, a lot of those get done at night with customers. All segments, all ages, every demographic, everything, you know, asking about things we’re doing, competitors are doing, and all the accommodation players, right? Because I’m super intellectually curious.
I have a strong view. But as I get a little more mature, I realize a strong view doesn’t always mean the right view. That just means it’s strong. I’ve always had strong opinions, but now I’m a little bit more sensible about understanding. Sometimes those are going to be wrong. You sort of trust your instincts. You know, it was Ronald Reagan who said, “Trust but verify.” Get real data.
And so I sat in all of these focus groups and every single one, all demographics, all age groups, obviously younger index, more to it. But like everybody had used it or has a view in it. I mean, they supported hook, line, and sinker, my historical view, which is these are different businesses. They’re both in the travel, in the travel ecosystem. But what we do and what they do are different. The stay occasion, the need they are fulfilling is very different than the need we’re fulfilling.
They are fulfilling generally for groups, larger groups, long, more extended-stay where people need a facility, like a kitchen, where they’re looking for a real value proposition because they have a group of people and every, you know, people are of different means and it’s generally more leisure. Almost all leisure, leisure related. And a lot of weekend business.
What we do is something totally different. We’re taking a product which hopefully we do most, if not all the time, that is consistently high quality, clean, wrapping it with great service, real service people that are trained. They’re not hosts that pop in and out. But these people do this for a living.
Wrapping it with loyalty, technology. People pay a premium for that because if they’re going somewhere and they’re on a business trip, they want reliability, they want the amenities, they want the friendly service that almost all the time is going to be very good or great, right?
We screw up sometimes. I get that. But we get it right. We serve 250 million people a year. I get a lot of complaints, but I get a lot more, I get plenty of letters praising the team, our team’s work, and we get it right most of the time. And so people pay a premium for that.
So I don’t even I don’t think we ever lost our cool. Well, I’m not going to pick on the media. I think that the sharing economy thing became pop culture. It’s like anything sharing economy was one of those things that just sucked the oxygen out of the room.
But if you talk to our customers, just like I did 3 or 4 weeks ago, five years ago, three years ago, five years ago, seven years ago, they said the same thing.
I had a group of our of our interns together, about 150 interns, college graduate school age. I said, how many of you have used Airbnb or one of the home-sharing services? And like most of the hands went up.
I said, So how many of you would prefer it if you’re going on a business trip, even if it’s going to turn into leisure? How many of you prefer it? Not one hand went up.
So by the way, that’s a limited data set. But the point being, I’m not, by the way, because I know this is a live stream and tape. Airbnb and Vrbo and all that. I know all the guys who run those and I know Brian’s going to be here. Those are great businesses. That’s not, I’m not saying that they’re that they’re not. I mean, they could get a data set of people that would say every hand would go up.
My point is they’re different. They’re satisfying customers’ different needs, the stay occasions of a customer. And I think what time has told us maybe they’re plateauing just because, you know, the efficiency curve is flattening out. I don’t know. You probably have more data, but what I do know is that there is enough room for both of us to really succeed.
And the testament to that, the evidence of that, is in the data. Like we’re not seeing any cannibalization. We’re not seeing people adopt, like all of a sudden, they’re traveling for, you know, for business and they’ve abandoned hotels, and they want to stay in alt accommodation. It’s just not happening. I think a little bit of those kinds of things is always going to happen. I don’t think it’s going to happen en masse. I think when it happens, it is because of the value proposition.
I think it’s when it’s when it becomes a value trade, it’s like, well, I can’t afford the price to get the consistency and the service and the amenities and all those things. And so, I effectively have to accept a higher beta experience to get a better value. That’s when it happens. That makes sense.
O’Neill: Well, I want to get into Hyatt’s, excuse me, Hilton’s brands here. If we could call the image for Spark.
O’Neill: No, no, I’m sorry, sorry.
Nassetta: That’s alright. I saw Mark’s going to be here. Mark’s a great guy. He’s one of my best pals in the industry. I hope he will say the same tomorrow when he’s here. If he doesn’t, let me know. Will you tell him I said he’s a good guy?
O’Neill: You launched two brands this year.
Nassetta: We did Spark by Hilton and then an extended stay brand.
O’Neill: You’ve talked a lot about segmentation being very important for you when you think about branding. How do you incubate brands today?
Nassetta: Listen, we have we again; we’re going to always start by saying we’re not perfect. Because we’re not. But we do some things really well. And I think developing, launching and scaling brands, we do better than anybody in the industry. When I got to the company 16 years ago, time flies, we had nine brands. We now have 22 brands. And, you know, assume that we have at least one or two always up our sleeve. Nothing to announce here today.
The latest two are our products of that muscle set that we built, which is really driven around what you’d expect it to be. All these crazy focus groups and things I do and research, you know, quant and qual research that we do and talking to loyalty members, talking to our customers, our non-customers, it’s all about trying to figure out like, how do we continue to build a bigger, better network effect? Who are we serving?
Well, who are we not serving? Or is it because, you know, we’re not in a certain geography, as in the case of some brands, or do we not have a product that meets the market from the standpoint of price point or stay occasion and Spark and what we affectionately call Project H3, we will have a name in the next few weeks. It takes a long time to get IP these days in Washington. But those are examples of each of those things.
So Spark is a great example of the biggest segment in demand in the United States and, for that matter, in most jurisdictions in the world, is economy. We’re not in that space because we never really figured out how to do it and deliver a consistent product, be able to afford to have the service levels that we need that we think are in keeping with being in the Hilton family.
And so what’s different now is we figured it out. We figured it out a little bit before Covid, and then during Covid we leaned in hard and we really figured out how to engineer a 100% conversion brand that would touch every key element of the customer-facing experience, both the service delivery and all of the physical product.
You have a picture of it up on the screen. The first one opened in Mystic, Connecticut, last week. I’ll be there next week to do an opening a week after next.
I believe it will be the most disruptive. It is not. And my team hates when I say this. They get really mad at me, but it is not the sexiest thing that we’re doing, and but it is the most disruptive thing we’ve done.
Why? Because nobody, I mean, if you go around, I’m not going to pick on individual companies in the economy space. We view we’re at the very high end. So we call it premium economy. We like making up categories, but it is at the very high end of economy.
There’s no consistency, there’s not a brand. It’s just not the way it works. You have a bunch of collections of very and sometimes very large collections of hotels that are just old and haven’t been renovated to get into the Hilton system.
[With Spark] you have to do 100%, and we’re going to do it for you. You’re going to buy it through us and we’re going to make sure it’s done exactly the right way so that every product you walk into will be fresh in that way. At that price point, it’s thinking in U.S. terms of like $80 to $90. We will be very unique in the space.
Why do I like it? Because we’re going to we’re going to serve tens of millions of incremental customers that we’re not serving today. And a lot of them are young, a lot of them are middle-aged, some are old. But there’s a whole bunch of young people and a whole bunch of customers broadly that will bring in, and they will start staying in our other brands and move around. H3 is just a product thing. It’s not like a price point. It’s really for a more mobile workforce.
It’s like micro-apartment meets hotel. I would argue it’s more of an apartment efficiency than it is a hotel. And there’s just nobody that’s done that at scale. So that is less about … there is a price point associated with it, but it’s a very specific product that is not that’s out there in the market in a very small way, in little pockets, but what we do really well is do it, we think better and then we do it at scale so that, you know, as as you have all these workforce needs all around the country, where people aren’t going to be there for multiple years, they don’t want to sign one-year leases, but they need an apartment to work and live. We’re going to give them that option.
O’Neill: In a moment, we’re going to go to audience Q&A and Rafat will kick us off. But I wanted just to pick on that one point that both of those brands that I noticed are sort of what I would consider middle-class brands, you know, and you said in your August…
O’Neill: Mid-tier. You called them the big opportunity for Hilton for the next 10 years, possibly 20 years is in the mid-market. Not that you’re going to neglect luxury, but …
Nassetta: We’re never going to. We love luxury. I mean, I love luxury. I bet everybody in the room will say love luxury. I love lifestyle. We’re doing all that. And we have a huge amount of effort, and we’ve launched a bunch of brands in the space. We’ve got the fastest-growing luxury brands on Earth. You know, with Waldorf and Conrad and LXR.
But well, you’ve heard me say publicly, and I’m happy to say it here because I know… I am confident I will be right. The opportunity on a global basis for growth over the next ten, 20, 30 years is in the mid-market. Why is that?
It’s obvious because that’s where the growth demographically is. It’s in the middle class.
And what can middle-class customers afford? Mid-market products, whether it’s hotels or anything else. So when you wake up in 10 or 20 years and look at X number of millions of rooms built over that time frame around the world, they are going to disproportionately be in the mid-market.
We think we have the best mid-market brands, and we are extending those at a very rapid pace all around the world to serve those customers.
Then guess what? Those customers grow up. Many of them. They become, you know, upper middle class and beyond. And they stay in all sorts of our other brands, you know, at higher price points. So I believe in building a real network effect.
My attitude is we want to serve every customer for any need they have anywhere in the world. The bulk of it, that neural network is in the mid-market, and the rest of it then gets connected to that network.
O’Neill: That makes sense. So more often than not, the next brands that will be coming from Hilton will be sort of in the mid-market?
Nassetta: Not necessarily.
O’Neill: Not necessarily.
Nassetta: I’ve talked publicly, I mean, we have other things.
O’Neill: Tell me, tell me more.
Nassetta: No, I think I know I’ve said we’re looking at luxury lifestyle. That is something we have a bit, you know, with LXR, as a luxury collection brand that has luxury lifestyle.
But we don’t have a hard luxury lifestyle brand, and we’re working on one. I don’t know when we’ll do it. I legitimately don’t know, and I’m not holding back on you. But I would say in the next year or two, we’ll do something in that space. So that’s probably the next thing we’ll do.
O’Neill: Okay. All right. I guess we can go to audience questions. Rafat, where are you?
Rafat Ali (CEO of Skift): Yeah, I’m here right here. Yes. Chris, I have a question for you. So have you played with ChatGPT?
Nassetta: A little bit. I’ve had people send me things, like ask questions about me and send me the result. Probably mostly wrong, which made me, which made me believe there’s still a ways to go. But yes, I have played with it, our team a little bit. Our team has definitely played with it.
Ali: So my question, I guess a follow-up question was, does it yet come up at the board level? Are you thinking about generative AI, or any uses of it across long-term at the board level?
Nassetta: Yes, I mean, we, listen, we’ve been using AI in one form or another for many years, and ChatGPT generative AI is obviously the next step in the evolution. Somebody was on CNBC, I think it was Barry Diller this morning, and I know Barry, not real well, but I know him. And I agreed. He was like, Hey, you know, it’s like it’s all anybody wants to talk about. And what I would say is I think Bill Gates said this. I think, you know, a lot of the transformation technologically over the long term will have a lot more impact on the world than we think. Sitting here today. But in the short term, it will have less impact. I think generative AI falls in that category.
I think when we wake up in 10 or 20 years, it’ll be revolutionary in a whole bunch of different ways. But I think it’s going to take time. And my personal experience with. But AI has tremendous applications already, not ChatGPT directly, but AI and we’re already, as I said, using it in really powerful ways. So what I think it’s not there yet, but I think one of the most powerful applications for travel and tourism tourism is going to be like your digital concierge. I mean, at some point, like, you know, like how you market your product, you know, is going to be through generative AI. Like if you don’t show up there, if you don’t have the content, that shows up in a way where it spits out goes, stay at a Hilton, you want to go to the Maldives, go to the Waldorf Astoria, the Maldives, you’re in trouble. So I think it will revolutionize, eventually, the way you go to market, right?
O’Neill: Kind of a search engine optimization?
Nassetta: I think it will completely change the landscape. What do I think is required? And I think it’s true today more and more content, right? I think having an amazing, which we think we do, and are continuing to build, an amazing content strategy. So you make sure no matter where it goes, you’re the one showing up is going to be important.
The other area that we’re using it, you know, aggressively right now is think about it. It’s, like, where do you have like massive amounts of data to that you can use AI to sort of sort intelligently to get better insights. So in our customer insights team, it’s amazing. I mean, I was kidding, you know, we, you know, like if you wanted to ask me like what are the top three things that people are complaining about in hotels in the world? You know, we can, you know, through AI, we can tell you that we can get structured, unstructured data out of our systems, out of our messaging platforms, out of social media, like stuff we could never do before.
How do we do it? It allows us to scrape the whole universe and be able to tell us what’s really going on. So what does that allow us to do? That allows us to much more thoughtfully, we address problems with customers, customers, and experiences at scale. You know, so, you know, to individual customers, it allows us to resolve problems because we can through the, you know, the ability to pick up all the data, unstructured and structured.
We can respond to people’s issues in the moment instead of like historically like, we’re sorry, here’s a bunch of Hilton Honors points because we screwed up. How about we fix it in the moment? AI allows you now to have a lot more listening posts out there and to have a mechanism for picking up.
And then there’s some rudimentary stuff. Think about people management, financial management, like gobs and gobs of data, lots of ones and zeros and things that you can do in those areas with the use of AI that can make that can make that much simpler, much more straightforward. And you can do, you know, you can do it faster and better on people management and financial management. So we already use it in the HR area aggressively. We use it in, in we use it in the financial management area aggressively. We use it aggressively in how we screen candidates and a whole bunch of different areas that are really fun.
So you know, and it’ll keep building, building steam. I don’t think you’re going to see it. I think it’ll take some time. Yeah. But it’ll be, I think, ten years when I’m if, if you guys invite me back in ten years, I think we’ll look back and say it took some time, but it’s pretty revolutionary and a bunch of things are very different as a result of it.
O’Neill: Okay. Audience question How do you expect Expedia’s new loyalty program, OneKey, to impact well-established programs like Hilton Honors?
Nassetta: Listen, Peter [Kern, CEO of Expedia] will have a view on that tomorrow when he’s here. Peter and I are friends. I mean, we, we’re not worried about it. I mean, I think of it in a very grossly simplistic way as, as our job is the experience fulfillment. So if you look at, you know, there’s two ends of the poles, there’s the platforms, you know, and increasingly, whether those can be the OTAs [online travel agencies] or Google or Apple or Amazon or whatever the big platforms are, people are buying tons and tons of their stuff through these platforms around the world.
There are different platforms in China and Europe than here, but you have these mega platforms and everybody for ease. We just we want to do it. We want to do it on our phone. We want to make life easy. So much is funneled through there.
But the way that we believe we fight against commoditization broadly or, you know, threats from, you know, an Expedia loyalty program or otherwise is just being really, really good at fulfillment.
So when it comes down to it at Hilton, if we provide you with the best product, most consistently with the best service, the friendliest service, have killer tech, that makes your life really easy, takes friction out, gives you, you know, a delight, you know that that ultimately you’re going to want our products.
You’re going to stay with us. It’s going to drive our market share and our business and our success and no matter where you’re buying stuff, you’re going to want to find us if we do a good job and the platforms are going to need us because they all want the best product.
So the way I think about it is we’re in the business of fulfillment. That’s what we do. The business of making the experience of giving you the platform.
I like to say, it’s our stage, your story. We create the backdrop for you to do whatever you want to do. We do it better than anybody else.
And as a result, we get a premium. I mean, right now, our brands have the highest premium on average of anybody in the industry because I think I hope you as customers, some of you certainly are. I would hope that we do it better and people pay a premium. So we want to remain the premium player by executing better and better. We know coming out of Covid, by the way, that we have a ways to go like that. You know, there are all sorts of we had supply chain issues, we had issues getting labor. We get all that, and we’re not through with that yet. And so there have been some quality issues in the industry, and we’ve had them too, and service issues and cleanliness issues and things, and we’re all over that. We’re in a big, big push in campaign globally on back to basics. We call it our customer promise to be the most reliable, friendly hospitality company on Earth.
But that starts with going back to basics and giving customers what they want done maniacally well, consistently all the time. And if we just focus on being the best at fulfillment, we don’t worry about what Peter is doing. I don’t worry about what Google is doing. I don’t worry about what anybody’s doing because you guys will all want to find us. And any platform, whoever is out there is going to want us on the platform because if people want it, they want it.
So I know that’s a gross oversimplification, but I think sometimes it’s easy as a CEO or whatever leader to get caught up in,, like every little shiny object, every little thing that’s going on and not see the forest through the trees. And so I learned a long time ago, like early days, one of my great professors in business school, it’s like, know the business you’re in. Like, really define it, know it well, and execute it flawlessly and there’ll be a place for you as long as the product is something that people will want. And I think experiences are something people are going to want.
You guys aren’t going to start wearing headsets and banging around your apartments, right? It ain’t ever going to happen. So they’re going to want what we do. And if we do it better, we’re going to be in really good shape. So my whole focus right now is back to basics.
The promise that we make to our customers and just really grinding hard to get it right. Every little thing.
O’Neill: Well, it’s been our stage, but your story at Hilton. Thank you very much, Chris.
Nassetta: Great to be here.
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Photo credit: Hilton CEO Christopher Nassetta spoke on-stage at Skift Global Forum on September 26, 2023. Source: Skift. Skift