Hilton Hotels Corp. has hired two senior executives from rival Starwood Hotels & Resorts in a plan to aggressively grow its luxury brands and, as The Wall Street Journal reports, create its own upscale boutique brand.
Ross Klein, the former president of Starwood's Luxury Brands Group, and Amar Lalvani, the former senior vice president of development of Starwood's luxury brands, have joined Hilton as global head of luxury lifestyle brands and global head of luxury and lifestyle brand development, respectively.
Klein had been instrumental at Starwood in growing the awareness and popularity of brands such as St. Regis and W. However, the hiring of Phil McAveety, a former Nike global marketing executive, as Starwood's chief brand officer by relatively new Starwood CEO Frits van Paasschen may have given Klein the impetus to walk.
Hilton has long been a player in the upscale, midprice and extended-stay markets, but has lagged in the development of its luxury brands, Conrad and Waldorf=Astoria, especially against its competitor set. Marriott has the Ritz-Carlton brand and Starwood, the St. Regis.
The addition of Klein and Lalvani is a signal that Hilton will look to better penetrate the market both domestically and globally with its luxury products. "One of Hilton's key priorities is to strengthen our presence in the luxury and lifestyle sector," said Chris Nassetta, Hilton's president and CEO. A Hilton spokesperson told us that Klein will "use his creativity to also differentiate the products."
Additionally, a new upscale boutique hotel brand from Hilton may not be far in the future. Starwood recently launched the new boutique brand, aloft, and Marriott has partnered with IanSchrager on a boutique brand of its own to be known as Edition.
In an uncertain economic time, luxury hotels are still performing well with high occupancy rates and strong daily rates. While building new luxury properties is especially expensive, leaving some developers to avoid taking on projects, Hilton has the advanatge of its parent company, Blackstone Group, which already owns some 585 hotels and, as The Journal reports, will incorporate 17 properties into Hilton's two luxury brands and pending boutique brand.