Just before the recent opening of California’s first Homewood Suites by Hilton in Garden Grove, Hilton Hotels Corp. President and Chief Executive Stephen Bollenbach called Orange County a “big part of our plans” and said more Hilton brands could pop up on the local landscape.
Bollenbach was in Anaheim in October to present the keynote address to the Travel Industry Association’s Marketing Outlook Forum at the Disneyland Hotel. It was the first time that the Washington, D.C.-based travel industry group brought its conference to California, bringing about 550 delegates to OC.
Bollenbach, whose background includes stints with the Trump Organization, Host Marriott Corp. and the Walt Disney Co., was upbeat about the future of tourism, citing a 36% growth in travel in the past decade, a strong domestic economy and the aging of American as factors in the growth. But he also cautioned the group against complacency.
“The biggest mistake any of us can make is to rest on our past successes,” he told the audience.
In an interview, Bollenbach later shared other thoughts on the OC market, where Hilton dramatically increased its presence after last year’s acquisition of Promus Hotels Corp. The deal put the company at No. 37 on the most recent Business Journal list of OC’s largest employers, with about 2,000 local workers. That number has since grown to 2,325. In all, the Beverly Hills-based company has more than 1,800 hotels and 85,000 employees.
While Bollenbach acknowledged that the company sometimes views Orange County as part of the Los Angeles market, he said there are indications that things are changing.
“Orange County is now one of the fastest-growing real estate markets in the U.S.,” he said. “We’re headquartered in California and Orange County is certainly an important part of our market.”
Like other companies, Hilton Hotels owns, manages or franchises its 11 hotel brands, each geared to a particular segment of travelers.
This past summer, the company converted the Doubletree Costa Mesa,a company-owned hotel,to a Hilton. But Bollenbach said he doesn’t foresee conversion of the three other Doubletree hotels in the county in Orange, Irvine and Dana Point. In fact, he said the company plans to grow the Doubletree brand nationwide.
“We see the Doubletree as a complementary brand to Hilton,” Bollenbach said.
Bollenbach said the goal of the company,in OC and elsewhere,is to have a hotel that fits the budget of every traveler.
“That’s the idea for us,” he said. “When someone is going to travel, we’ll have a hotel plan that will fit their travel needs.”
The company has only its namesake Hilton brand in Anaheim, but Bollenbach said it has,and wants,a presence with other brands like Doubletree, Hilton Garden Inn, Homewood Suites and Hampton Inn outside Anaheim.
Pointing to the fact that 40% of the company’s growth has come from management and franchising fees, Bollenbach said franchised hotels are a likely source of future growth here, particularly for the Hampton Inn brand, which is widely known in the Midwest and East, but not as much on the West Coast.
“You’ll certainly see more Hampton Inns in Southern California,” he said.
Currently, there are Hampton Inns in Garden Grove and Foothill Ranch.
Bollenbach also said the company might consider another full-service hotel in Orange County.
“We’re looking for business partners as developers, because we own the brand of choice for construction,” he said. “Fifty percent of all builds in the last year nationally were Hiltons or Marriotts.”
The Hilton Garden Inn, Hampton Inn and Homewood Suites in Garden Grove were all developed by a partnership of Denver-based Stonebridge Cos. and Loveland, Colo.-based McWhinney Enterprises, both of which have local ties. Pacific Hospitality Group in Irvine developed the Doubletree Costa Mesa.
Hilton’s rival Marriott is another big player in the county, with 26 hotels and more to come. And the Walt Disney Co. is increasing its presence with the opening of the 750-room Grand Californian and is considering the inclusion of one or more hotels on the site of the a third Anaheim park announced in July.
According to data from Smith Travel Research, Hilton currently leads all lodging companies in the number of hotel openings in the midscale and upscale segments of the industry.
But Bollenbach said he isn’t worried about the increased competition here and doesn’t foresee many changes for Hilton in Anaheim,particularly in regard to the Hilton Anaheim, the Southland’s largest hotel. “It seems to me we have a special market position in Anaheim as a meetings hotel,” he said of the 1,500-plus-room Hilton across the street from the Convention Center.
“The new Disney hotel is going to be a beautiful hotel, but it’s really not our segment.”
Glenn Hale, area vice president and general manager of the Hilton Anaheim said that hotel still targets the trade group and association markets that make up a big chunk of the Hilton’s business. But he said the hotel has begun more heavily targeting the corporate market as well.
“But we still need the leisure market, too,” Hale said.
That leisure market will likely be bolstered by up to 7 million tourists expected to visit Anaheim when Disney’s new theme park, California Adventure, and entertainment district, Downtown Disney, open early next year.
Hale and Bollenbach both said they are confident that Disney will be able to draw the expected crowds.
“One thing is for sure, they’ll fill the park,” Bollenbach said. “Having the people here is the important thing.”
But getting people to OC inevitably turns the conversation to the topic of airports.
Bollenbach declined to comment on the prospect of converting El Toro to an airport, saying he didn’t know enough about the local issues involved. But he said he believes something needs to be done for Southern California.
“If we don’t have proper air lift, people will go somewhere else,” he said. “I don’t know how or where (to do it). I just know the experts expect a crisis (if something isn’t done).” n
