Bigger is definitely better, according to hotel mogul Stephen Bollenbach.
The Chief Executive and Co-Chairman of the Beverly Hills-based Hilton Hotels Corp. said that size and the clout that comes with it are essentials for success in the hospitality business.
“If you’re going to be a force in this industry, size and scale are critical,” he told the Beverly Hilton Hotel audience at the ACG Los Angeles Business Conference.
He ought to know, having worked for Marriott, the Walt Disney Co. and the Trump Organization, where as chief financial officer he was credited with helping Donald Trump avoid personal bankruptcy.
Bollenbach explained how he employed the “bigger-is-better” theory in his 10 years heading Hilton.
When he took over in 1996, Hilton had about 275 hotels and a strained relationship with Hilton Group PLC, the company that owned and managed the foreign hotels that had been spun off in 1964.
“We could have continued down that road but the future wouldn’t have been as bright,” Bollenbach said. Two big deals changed the dynamics for Hilton.
In 1998, the Promus Hotel Corp. was in financial trouble after a difficult merger and Hilton was able to buy its 1,700 hotels, including the Doubletree, Homewood and Embassy Suite brands, for $4 billion in cash and stock.
“With the collection of brands, growing fee income stream and franchise opportunities, we could continue to grow without using our own capital,” Bollenbach said.
Meanwhile, Hilton had begun to repair its relationship with the Hilton Group. An alliance that began with shared loyalty programs and marketing materials evolved into a more significant opportunity for the two firms, which considered buying out each other.
“The stars never lined up quite right,” said Bollenbach, who noted that it wasn’t for a lack of trying. “This meant a number of late-night, international flights, and hopes up and hopes down.”
Finally, in February Hilton absorbed its international partner for nearly $6 billion in cash. What made the timing right?
Bollenbach said the hotel business was stronger than any time since the 1990s, and the corporation had paid down its debt from the Promus purchase. Additionally, during the eight years of talks, the Hilton Group’s gaming business had become more lucrative than its lodging division.
“We were able to use friendly debt markets and our strong balance sheet,” Bollenbach said. “Now we’re the world’s largest hotel company.”
The holdings include more than 3,000 hotels in 80 countries, and Bollenbach said he expects the list to grow by about 200 hotels annually.
Regent No More
The famed Regent Beverly Wilshire hotel will now be known as the Beverly Wilshire.
The new moniker marks the end of a $35 million renovation that included construction for Wolfgang Puck’s CUT steakhouse.
Four Seasons Hotels Inc. has managed the Beverly Hills landmark for the past 15 years through a licensing pact with Regent International Hotels. Recently, the Four Seasons exercised an option to take over the license and the name change is intended to reflect the fact that the Four Seasons is operating the hotel.
“For fifteen years, Four Seasons has managed this iconic property and successfully embodied Four Seasons operating and cultural standards,” said Wolf Hengst, president of operations for Four Seasons. “The hotel’s name change and renovation mark the completion of a full transition of the hotel to the Four Seasons portfolio.”
The nearly 80-year-old hotel is known for attracting celebrities with its location, just steps from the entrance to Rodeo Drive. In addition to the CUT, the Beverly Wilshire has recently added The Blvd., a sophisticated restaurant and bar. The hotel also opened a new spa in June and has done room revamps that include 42-inch plasma TV screens in every room.
Beantown Pizza
Boston’s Gourmet Pizza is diving into the Southern California market, not just dipping a toe.
Boston Pizza Restaurants LP is opening 17 restaurants in the region this year. The Dallas-based chain already has Rancho Cucamonga and Long Beach locations, and plans to add restaurants in Mission Valley, San Diego, Hesperia, Lancaster, Palmdale and Watts soon.
The restaurants feature an upbeat atmosphere and separate-seating sports bars. Besides pizza, the restaurants offer salads, steaks, and sandwiches. The menu also includes Boston versions of the barbecue and Thai chicken pizzas that have made the California Pizza Kitchen a household name.
So far, the expansion plan is working.
“We have been extremely delighted to see the results of the first California openings for Boston’s,” said Howard Terry, vice president of marketing. “These stores are on track to be the highest sales volume restaurants in our system and it’s an indicator of how well our concept works for the California restaurant patron.”
Staff reporter Emily Bryson York can be reached at (323) 549-5225, ext. 235, or at
[email protected]
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