Denizen Still Making Headlines a Year Later

Just yesterday the HotelWorld Network staff was chatting about the irony of last year’s ALIS conference, when Hilton was in the beginning stages of marketing their then-code-named Project 21 global, luxury-lifestyle brand.

Ross Klein was parading around the Hilton San Diego Bayfront, dishing little about the new brand, name-dropping Conrad Hilton and offering just enough to whet the appetite. The industry was eating it up, saying 2009 could be The Year of Hilton.

Oh, how things on the Denizen front have changed.

How ironic that exactly one year later, as the industry gears up for the same conference—the first conference of an optimistic and opportunistic 2010—we’re revisiting Denizen news again, this time in an entirely different light.

Initial allegations last March that former-Starwood-then-Hilton employees stole trade secrets and used them to create the Denizen brand stalled development and key executives were let go. Now, new allegations arise that C-level employees at Hilton, including CEO Chris Nassetta, were aware of what Starwood is calling “corporate espionage” and waited months before informing Starwood of their knowledge.

Let the slinging of mud resume.

“Hilton executives had already distributed Starwood Confidential Information within Hilton for use across all of Hilton’s luxury and lifestyle brands to compete directly with Starwood, and Hilton’s wrongdoing was known to and condoned by dozens of Hilton’s executives,” the amended filing reads.

According to Starwood’s newest claims, Nassetta received a letter informing him that “numerous manuals, detailed plans, budgets, marketing systems, building specifications and other proprietary documents from Starwood were brought to Hilton by Mr. [Ross] Klein. Mr. Klein put some of these highly proprietary documents on Hilton's internal computer server, and instructed Hilton personnel to use these proprietary Starwood documents as a detailed plan for them to follow to develop and modify Hilton’s luxury and lifestyle brands.”

“It is my understanding that most of these documents were labeled ‘strictly confidential,’” read the letter, written on behalf of the VP of sales and marketing for Hilton’s Conrad Hotels.

Despite the knowledge, Hilton moved forward with announcing Denizen Hotels in March. The amendment and accusations are a timely jab at Hilton, which was just ready to start talking openly again about both its U.S. and international development plans at ALIS.

Kenneth Siegel, Starwood's general counsel, issued this statement today: "This case is about restoring a level playing field for fair competition, not just substantial monetary damages.  We will do whatever it takes to protect our brands and intellectual property for the benefit of our investors, associates, owners and customers."

Reached today, Hilton would not comment, citing the pending litigation. But rest assured, how they discuss luxury growth plans in the near future will be closely scrutinized.
 

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