Hilton Launches Luxury Hotel Brand

NEW YORK – Hilton Hotels Corp. (HLT) Tuesday launched a new luxury brand named after its landmark Waldorf-Astoria hotel in New York as part of its plans to expand internationally after a recent acquisition.

The Waldorf-Astoria Collection, which would compete with other luxury hotel brands such as Starwood Hotels and Resorts Worldwide Inc.'s St. Regis and Marriott International Inc.'s (MAR)Ritz-Carlton, would be a combination of co-branding existing hotels and new properties, said Chief Operating Officer Matthew Hart.

"We are not doing it as a response to them," Hart said, referring to Starwood and Marriott. "We are doing it because we think there is a big opportunity .... We have the potential to go into markets that before this we couldn't."

The Beverly Hills, California-based hotelier announced in December that it was buying its British namesake, a move that, among other things, would allow it to operate worldwide.

Hart said Hilton, which already has the Conrad chain in the segment, felt there was space for two luxury brands in its portfolio.

He said there were about 200 luxury hotels worldwide that could be co-branded with Hilton's new brand. He also said the market for newly built high-end hotels in the United States is limited.

The launch includes four hotels, including the Waldorf-Astoria in Manhattan. Hilton will take over the management of three hotels owned by real estate investment trust CNL Hotels & Resorts Inc.

Hart later told Reuters that Hilton would also look at selling the hotel properties it got as a result of the UK acquisition. And CNL could be a potential partner there, too.

"You heard him say he is interested," Hart said, referring to CNL Chief Executive Thomas Hutchison who was also at the news conference. "He wants to do more things with us."

Hart also said that Hilton had been discussing upcoming contract negotiations with members of the union, Unite Here, at both national and local levels for several months.

Union contracts are coming up for renegotiation this year in several major cities in North America — including Toronto, New York, Los Angeles, Boston and Chicago. San Francisco, where union contracts have already expired, has seen prolonged, and sometimes bitter, negotiations, including boycotts and lockouts at some hotels.

"It's an issue that we think about," Hart said. "We will just have to see how it all works out."

Hart said the unions were looking at using upcoming negotiations as an opportunity to grow. "They are more interested in growth of the unions than they seem to be in the specific benefits city by city."