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Hilton Worldwide planning over 50 new hotels in Latin America and the Caribbean

Hilton Worldwide planning over 50 new hotels in Latin America and the Caribbean

Posted by Juan Gavasa on February 16, 2015

When the Hilton hotel chain decided to place its first hotel outside the continental United States, it built the Caribe Hilton in San Juan, Puerto Rico in 1949.

Now, 66 years later, the Caribe Hilton — refurbished and upgraded several times — is still on the same impressive peninsula with 17 acres of land, while the Hilton brand has expanded to myriad other locations, currently appearing on 81 hotels throughout Latin America and the Caribbean.

“We’re doing very well in the region, thanks to economic strength in the U.S. and Latin America,” said Tom Potter, the Miami-based senior vice president of operations for Hilton Worldwide in the Caribbean and Latin America.

“We expect our portfolio to grow by about 60 percent in the next two years, since we have over 50 new properties in the pipeline,” said Potter, who was born in Argentina and has worked with Hilton for over 35 years.

“We’ve seen a lot of growth in new hotels on the periphery of large cities and in secondary cities in Latin America,” said Potter, who has held a range of international management positions at Hilton and speaks English, Spanish, Portuguese and French.

This growth has occurred as regional economies have expanded and businesses spread outside major cities to provincial capitals and rural areas previously underserved by hotels.

Hilton, like other hotel groups, has expanded its portfolio over the years to include not only large, full-service hotels in major cities, but also extended-stay suites and limited or select service hotels, which offer fewer amenities than the largest hotels.

At Hilton’s Latin American hotels, a majority of guests are business travelers, while there is a mix of business and leisure guests at its Caribbean properties.

Potter, who studied hotel management at what is today Bournemouth University in England, oversees more than 40 employees in the Miami regional office and about 4,000 at Hilton-owned and managed properties in the region. There are also thousands of others who work at Hilton-branded franchised hotels who are not Hilton employees.

With 12 brands globally, Hilton has nine in Latin America and the Caribbean, including Hilton Hotels and Resorts, Waldorf-Astoria, DoubleTree by Hilton, Embassy Suites by Hilton, Hampton Inn by Hilton and Hilton Garden Inn.

Hilton competes with other large international chains like IHG (InterContinental) and Wyndham, as well as local and regional hotel groups.

The company opened its regional office in Miami in 1997 with about 30 employees. Before that, the company had a much smaller office here.

Hilton Worldwide — the modern, publicly traded version of Conrad Hilton’s original company — is the world’s largest hotel operator. With its headquarters in McLean Virginia, the concern manages, franchises, owns and leases more than 4,300 hotels and timeshare properties with over 715,000 rooms in 94 countries and territories. At the end of 2013, Blackstone Group, a private equity firm that owned Hilton, took the hospitality group public.

Large hotel groups like Hilton used to build, own and operate their hotels, but the business model changed. Hilton, for example, owns and operates only two hotels in the region today — in Puerto Rico and Brazil.

The other 79 properties — all carrying the Hilton brand — are either managed by Hilton Worldwide or are franchises.

Potter, who started working for the company in 1979 at the front desk of the London Hilton, explained that under a management contract, a private investor owns/builds a hotel while Hilton Worldwide manages the assets — providing a full management team and handling all sales, marketing, accounting and other areas.

Under a franchise agreement, a private investor owns and manages the hotel while Hilton Worldwide provides guidance and expertise, as well as use of the Hilton reservation system.

Under both management and franchise agreement, Hilton works to ensure that its quality standards are upheld, and receives fees for all of it services.

In Mexico, for example, Hilton has 33 hotels. Hilton does not own any of these properties but has management contracts with 12 and franchise agreements with the rest. Among these, it manages the Hilton Los Cabos Beach & Golf Resort, the Hilton Mexico City Reforma and Santa Fé hotels, the DoubleTree and Garden Inn in Querétaro and the Hampton Inn in Guadalajara.

To maintain its competitiveness in the region, Hilton pays special attention to investment in new technology. For example, customers will soon be able to use their smartphones and an app as a key — to check in to group hotels online, pull up a map showing where their room is located and completely bypass the reception desk.

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