Hilton's CEO Chris Nassetta has a lot on his plate, with new brands like Undergraduate by Hilton launching and the company opening "two to three hotels a day," as he estimates.
Nassetta sat down with TPG to discuss the economics of points and how Hilton Honors is handling rising prices, as well as the value proposition of the program for frequent and casual travelers alike.
"There's a Hilton brand for everyone," Nassetta said, explaining that the company has leaned into the "experience economy" and continues to meet its customers where they're at. "We've built a really cool network effect where we're able to serve every customer for any need they have anywhere in the world they want to be," he said.
Hilton's portfolio has more than tripled in the number of brands since Nassetta joined the company in 2007, with new luxury products like LXR, strategic partnerships like Small Luxury Hotels, and a collection of stays and experiences centered around nature.
"We stop adding brands when customers stop telling us they want new brands, right?" Nassetta said. "So that probably is never."
TPG frequently hears from readers that award pricing, especially dynamic pricing, has made top-tier stays inaccessible. However, Nassetta explained that points equate to real money flowing between Hilton Honors and hotel owners, to the tune of billions of dollars.
"The high-end luxury [market] has gotten a lot more expensive and the system has to pay for it," he said. "We have to balance it out. It's basically a relative rate structure and demand issue."
Hilton recently introduced Diamond Reserve, a new top-tier elite status level that requires 80 nights or 40 stays and $18,000 in annual spend. While it's not the easiest level to reach, Nassetta advises not to fret, saying that Diamond Reserve didn't take anything away from Diamond, but rather made it easier to get to Gold and created a more aspirational upper tier.
"What will change is we'll keep figuring out what we can do for the most elite travelers and what experiences we can connect to it," Nassetta said.
Nassetta emphasized that Hilton is not forgetting the casual travelers who might hit the road once or twice a year, saying that the company wants all travelers to feel special, whether it's with immediate discounts, Amazon deals, or Lyft deals.
Rumors have swirled online about a new invite-only elite status level above Diamond Reserve called "The Honors Society," but Nassetta did not confirm its existence, saying only that "maybe there'll be something beyond [Diamond Reserve]. Maybe some day there'll be something that we don't really publicize."
