Hilton looks to grow African loyalty with five new hotel openings in 2018
Hilton Worldwide Holdings Inc, says it is committed to inclusive growth across the continent.
This is according to Rudi Jagersbacher, Hilton President, Middle East, Africa and Turkey, speaking at a media briefing held on Tuesday in Durban.
Jagersbacher says the groups plans to spend $50 million over the next five years to add 100 hotels to its chain in Africa, as plans steam ahead with five new hotels set to open on the continent this year alone.
These are Legend Hotel Lagos Airport, Curio Collection by Hilton in Nigeria, DoubleTree by Hilton Kigali City Centre in Rwanda, Hilton Garden Inn Lusaka in Zambia, Hilton Garden Inn Gaborone in Botswana and Hilton Garden Inn Mbabane in eSwatini.
In April this year the group confirmed South Africa’s first Hilton Garden Inn as part of the R1.3bn uMhlanga Arch, would open in 2020.
These plans show the Hilton portfolio is serious about tapping into the growing business travel on the continent, in response to an estimated 11 percent growth in Sub-Saharan African tourism in 2017, according to UN World Tourism Organisation data.
Jagerbacher says extending the footprint of Hilton branded properties is working well across a variety of markets, specifically in Turkey. He went on to confirm that as the group gears up for its centenary year, the success of 2017 saw it “opening on average of a hotel a day”.
While previously it had seen 70% profitability in Americas, it now sees 53% profitability outside of the Americas, with the African continent continuing to be a big focus. In 2018, the Hilton group which has a 60-year-old brand legacy in Africa and some 20-years in South Africa – opened 22 hotels across 11 African countries.
But Hilton is not alone in its expansion plans in Africa's hospitality offering.
Marriott International and the Rezidor group, which owns Radisson hotels, are all in it to earn travellers' favour.
Radisson is currently involved in the R3bn Oceans Umhlanga development, having also just opened the millennial focused Radisson Red in the trendy Silo District of the V&A Waterfront.
Similarly, Hyatt Hotels & Resorts is also expected to open six new hotels on the continent by 2020.
But how is Hilton planning to increase its market share, across its already extensive business traveller footprint?
It’s investments in pushing direct bookings and loyalty memberships continues to be a major shift in its distribution cycle, because ultimately, they’re looking for "deeper engagement with their customers".
Skift recently reported how Hilton, like many of its peers, upped its focus on campaigns such as “Stop Clicking Around” — its biggest ad campaign to date. Growth for the campaign which dates back to the 1990s but has seen serious momentum since 2016 is a “record 11 million more Hilton Honors loyalty members for a total of 71 million”.
Ultimately this can be good news for travellers, especially business travellers, as direct bookings through loyalty programmes can mean better budget options, exclusding the commission rates paid by hotels to online travel agencies. These can range widely from 10 to 30 percent – causing the odd friction between hotels and online travel agencies (OTAs).
According to Hilton, 95 percent of those members are booking direct, which accounts for roughly a third of all Hilton’s bookings – 10 percent of which is done via a mobile phone, says the group.
Overall, the intent of Hilton’s stop clicking around push of the Hitlon Honours loyalty programme is so that they can harness what they need to offer a "superior guest experience".
This all forms part of the company’s organic growth strategy, which will see it spread its accommodation offerings through the addition of diverse group brands hotel, with a special Curios brand hotel set to be announced in 2018.
According to Jagersbacher, this ensures the group continues to expand its offering beyond corporate or business traveller.