Deepak Seth

Vice President Development Southern Europe & Africa Hilton

The pillars of our intangible assets (loyal customers, team members, brand values and services) all work in harmony to complement each other

Publié le 15 Juillet 2010

What are the key intangible assets for Hilton? Which combination of intangible assets is of strategic use?
Today, our brand name is the most important asset, which relies on the hotels themselves. We have 3,500 hotels and another 900 under construction. Last year alone, we added 300. Our chain is currently one of the fastest growing. It is one of the strong pillars on which we rely and is the reason why we have one of the strongest brand names in the world.

The brand and the «Hilton machine» – Most importantly, it is the brand name, the image it conveys and its awareness. The brand name is our «fonds de commerce». Indeed, Hilton is one of the oldest brands in the industry and has gained true recognition: the name Hilton is directly synonymous to the word hotel.

Once the brand achieves such presence on a global scale, it naturally opens the door to a significant reservation network. It allows you to obtain a massive presence all over the world. Today, we are proud of our 39 sales offices internationally based in decision-making cities. We have our 5 pillars to the «Hilton Engine»:brand services, distribution, sales & marketing, Hilton HHonors and our technology. We have 25 million members on the data base of Hilton HHonors.

Our people – We call them our team members. In total they number over half a million and are of 80 different nationalities. It is our people who make the hotels, and every team member has the opportunity to become a general manager. Thanks to the Hilton University, every hotel has learning facilities where they can learn new languages, work towards personal development... This is one of the core pillars in our business.

Our customers – 70% of the deals we close are with existing owners. Our mission statement is to be the first choice in the world for the traveler. In order to achieve this, we need to have a strong brand and loyal and happy team members. Automatically, if you satisfy your customers, your business will be successful; this then gives you the opportunity to open more hotels. We find that 9 million of our customers are actively participating in our Hilton HHonors program. In other words, they do not go anywhere else than Hilton.

Our knowledge – We are truly International and are expanding rapidly in different countries. Our knowledge is truly Global and International.

Does this combination of intangible assets vary according to different segments (luxury, upscale, down-market…)?
The principle of intangible assets is the same across the different brands. The only thing that differentiates is the brand standards. Each of these brands, in their respective segment markets, endeavours to achieve its level of excellence.

How do these intangible assets work as a genuine growth engine for the sector and for your group?
Market share and intangible assets are directly proportionate. The better you manage them, the more you invest in them then the better will be your market share. This is a continuous process; for example, you have to keep on training your team members and look after your customers. We continue to invest in these assets to ensure growth.

Is this intangible capital measurable? How would you value your brand?
Investors and experts value assets and hotels. You can value a brand but I do not think that someone can give you the precise value of a brand. We know our team members are the most valuable assets but this value does not appear on the balance sheet. Each of the pillars of the «Hilton Engine» clearly impacts our profitability, even though you cannot give a value to each of them. We know how much business is generated by our sales offices and we know how much cross reservation is done. But can you separate intangibles and give it a value? No, you cannot.

Do you have a specific financial communication on your intangible assets?
We communicate about our people all the time: within the organization but also externally. That is why people want to join and work for us. Our team member turnover is significantly lower. Our general managers have the longest duration of work in the industry. These statistics show the extent to which we are strong in retaining our team members.

We also communicate about the loyalty of our guests and customers. Through this communication, we have created a very strong loyalty of both our team members and our customers. So, yes, it is extremely necessary to have ongoing and continuous communication in order to build on and reinforce our intangible assets all the time.