Hilton CEO Christopher Nassetta is known for being a growth and change agent at the hotel conglomerate.
Under his tenure, the company moved its headquarters from Beverly Hills, California, to just outside Washington, D.C. — a geographic switch timed alongside the company’s “It’s morning in America” wake-up call that took it from industry sleeper to growth juggernaut.
Brands across the entire price spectrum, from Waldorf Astoria and Conrad to Home2 Suites and Hampton, fueled expansion amid the company’s repositioning in the hotel orbit. Today, Home2 Suites is the hotel brand with the largest development pipeline in the U.S., according to Lodging Econometrics.
But it’s more than brand growth keeping Hilton going these days. Company leaders, like most in the global corporate landscape, are weighing how to utilize artificial intelligence, fee transparency and other unique-to-Hilton features — a businesswoman and pop culture icon known for making “That’s hot” the phrase of the early aughts, perhaps? — to their advantage.
“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,'” Nassetta said of AI this week at the Skift Global Forum in New York City.
Hilton’s planned AI strategy that will impact you
Consider Hilton’s approach to AI more of a steady ascent than a swift revolution.
Although Hilton has been using AI “in one form or another for many years,” Nassetta indicated generative AI — offerings like ChatGPT that can generate text, images or other media — likely has less impact on travelers in the short term.
“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 from my personal experience with it,” Nassetta said.
That still means there will eventually be a time when AI increasingly impacts how you stay at a Hilton hotel. Expect AI to amplify the usefulness of the digital concierge in travel, Nassetta said.
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It’s going to take a smart content strategy to get to the point where this digital concierge is smart enough to, say, know the exact right times to recommend the Waldorf Astoria in the Maldives to travelers planning a vacation.
Further, generative AI in travel will likely take the form of offering highly personalized experiences at a greater scale. The tool can explore guest preferences and complaints through the company’s various data streams like messaging platforms and social media. It can then process that and know exactly how the arriving guest does or doesn’t like to travel. That means generative AI can also quickly address any customer service complaints.
“We can respond to people’s issues in the moment instead of how, historically, [we’ve been more] like, ‘We’re sorry, here’s a bunch of Hilton Honors points because we screwed up,'” Nassetta said. “How about we fix it in the moment, and then, you know, AI allows you now to have a lot more listening posts out there and to have a mechanism for picking that up.”
Hilton’s call for a level ‘junk fee’ playing field
Hilton is the latest hotel company to move toward disclosing resort fees upfront and bundled into an advertised nightly rate.
Marriott was the first of the major brands to start the bundling practice earlier this year, and Hyatt followed toward the end of this summer. None of the companies say their prior practices, which typically involved noting the fees at some point in the booking process but not incorporating it into the rate until confirming a stay, were deceptive.
However, several lawsuits across the U.S. from various state attorneys general are clearly prodding the industry into more upfront pricing practices.
“In the end, we don’t want consumers confused about what they’re buying, or what they’re paying for what they’re buying,” Nassetta said. “The issue in our industry, though, is complicated.”
While traditional hotel companies are moving toward upfront pricing, Nassetta pointed to third-party booking platforms like Expedia or Kayak as getting an unfair advantage since they often don’t disclose resort fees. The various lawsuits targeting hotel companies have not pushed these online travel agencies to change their pricing strategy.
“In the hotel space, most of us are going to the right place. The problem is a lot of our products are distributed through third-party distribution channels,” Nassetta said. “It doesn’t matter if Hilton shows it the right way because not everybody, but a large part of the population is starting on Google to do comparison shopping. If there’s a belief it’s misleading, they’re going to be misled before they even get anywhere near us.”
The comments arrived days after Hilton voiced support for legislation by U.S. Sen. Amy Klobuchar, a Democrat from Minnesota, and U.S. Sen. Jerry Moran, a Republican from Kansas, calling for a standard fee display for hotels and short-term rentals.
Hilton’s recent embrace of Paris Hilton
You might have noticed Paris Hilton has been more of a presence in Hilton marketing as of late, from the company’s 10-minute TikTok to TV ads for the company’s connecting room technology and strawberry waffles at Hampton.
Nassetta jokingly referenced this as the superior celebrity strategic adviser over the recent pairing of Delta Air Lines and former NFL quarterback Tom Brady.
“Tom’s a nice guy, but we’ve got our own,” he said with a laugh.
While Paris’ parents, Rick and Kathy Hilton, weren’t included in an ownership stake of the company at the time when the namesake family was still heavily involved, they do share a name with the company — and Paris was famously raised at the Waldorf Astoria in New York City. She continues to be a frequent guest at Hilton properties, Nassetta noted.
“So, five or six years ago, I said to my team this is crazy. She’s part of pop culture, and she started a lot of the influencer thing. I mean, I think Kim Kardashian and the others were all sort of on the heels of Paris,” he added. “Why would we not lean into that?”
It’s a departure from the ascent of Paris in the early aughts when the company appeared to want to distance itself from the socialite who kept gossip magazines in business. But that was a different time for Hilton, too.
Paris is now a mother and a businesswoman who is showing staying power, and you’d be hard-pressed to find many still lobbing the term “industry sleeper” at Hilton like they were when Paris Hilton was the only Hilton people cared about.
While the deal isn’t the same strategic adviser structure as Brady’s with Delta, Paris helps Hilton with marketing campaigns and social media, and she advises on the company’s lifestyle brands, Nassetta said. She even recently attended a town hall at Hilton’s headquarters.
“The Hilton family has not been involved in the ownership of the business for a long, long time, but we share names,” Nassetta said. “Paris is an unbelievably thoughtful, intelligent, engaging and popular person who not only happens to share our name but also love Hilton.”
As the wise woman once said: That’s hot.
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