Alan Watts (Courtesy of Hilton)
United States-based Hilton Worldwide, like most international hotel chains, sells only its managerial skills, expertise and global marketing network in the hospitality industry and does not own the properties or hotels it manages. Yet Hilton has developed into one of the world’s largest hotel chains, with a portfolio of 14 world-class brands, including luxury Waldorf Astoria and Conrad and flagship Hilton, comprising more than 5,400 properties under its management in 106 countries.
Hilton does not invest in property, thereby avoiding the sensitive issue of land acquistion, but in human resource development through the transfer of skills in the various segments of the hospitality industry.
Hilton’s Asia Pacific president Alan Watts recently spoke to The Jakarta Post’s Vincent Lingga in Singapore about how Hilton is preparing for its big-bang expansion in Indonesia over the next five years:
Question: What is the current landscape of Hilton’s operations in Indonesia and what are Hilton’s business plans for the next five years?
Answer: Hilton currently operates five hotels [Conrad Bali, Hilton Bali Resort, Hilton Bandung, DoubleTree by Hilton Jakarta and Hilton Garden Inn Bali Ngurah Rai Airport]. As Southeast Asia’s largest economy with a burgeoning middle class, Indonesia is a particularly important growth market for Hilton. Our goal now is to achieve chain scale in Indonesia, deploying everything from the luxury Waldorf Astoria to mid-market Hilton Garden Inn. Four more mid-market hotels will open in Surabaya [East Java], Jakarta and Karawaci [Tangerang, Banten] in 2019 and 2020. Hilton’s world-renowned luxury brand Waldorf Astoria and Conrad will open in Jakarta and Bali’s Nusa Dua in 2020, to be followed by another Waldorf Astora in Bali’s Ubud area in 2024. Eight others property, mostly in Java, are also in the pipeline
What is the main principle behind Hilton’s management contract?
Hilton is a hotel management company and its growth strategy in the region has been to focus on acquiring management contracts by identifying the right partners and opportunities and by offering owners the right brand for their property and market, creating good relationships with them through the delivery of one of the best returns in the industry, and providing solid support to owners or investors right down from the design and construction through to operations of the hotel. The key is to get the right partner for a long-term management tie-up because we invest a lot in human capital.
How does Hilton maintain the same level of services for each brand around the world?
As a business of people serving people, we focus on finding the right talent and giving them the right training through our inhouse training system we call Hilton University, an online training platform with over 3,000 training courses for all aspects of hospitality for team members [employees] in all lines of operations. We also conduct training in cooperation with local vocational schools as the one we made with the Bali State Polytechnic in early 2017.
So important has training been in our system of operations that Hilton often recruits and trains employees — we call team members — even one year before a hotel begins operations. We also run a food and beverage operations academy because this hospitality segment has contributed an average of 40 percent to Hilton revenues. Hilton’s top priority is in providing meaningful opportunities for building great careers through sustained growth and development through programs that include national and overseas work exposures.
As the Hilton chain operates world wide, how do you think Hilton could contribute to Indonesia’s market in global outbound travel?
The hospitality sector especially moves in step with the economy as a whole. Greater investor interest means more business trips to the bustling metropolises like Jakarta. Indonesia will gain a wider global exposure to potential visitors and investors through Hilton’s worldwide promotion campaign such as the Hilton Honors loyalty program, which has more than 56 million members around the world and 8 million in the Asia Pacific region alone. In fact, 40 percent of booking reservations for our properties are made through this loyalty program.
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