Private Equity 'Best Thing to Ever Happen': Hilton CEO
Private equity might be dirty words on the presidential campaign trail but Blackstone Group buying Hilton "was the best thing to ever happen to us," CEO Christopher Nassetta told CNBC Thursday.
"Hilton was a good company that had the potential to be a great company" when Blackstone bought the company four years ago, he said.
"Blackstone unleashed the ability for us to do that by helping us by investing significantly in the business and being an incredible partner in setting the strategic direction of the business," Nassetta said.
Blackstone has invested about $6.5 billion, allowing the company to hire more than 70,000 people, make more deals, and open 170 hotels, or about 30,000 rooms, last year — something Hilton wouldn't have been able to do on its own, Nassetta said.
Both the transient and group businesses are up thanks to business travel, he said, and room rates have been slowly increasing.
"We're not pulling in our horns at all in terms of our growth as a business," said Nassetta. The growth is largely driven by working with third-party owners "that are investing their capital either in a management or franchise context," he said.
Marriott International is also expecting good things in 2012, said CEO-Elect Arne Sorenson, who becomes chief executive in March.
Business and leisure travel are back in reasonably strong numbers, he said. "We see more optimism in the newspapers, which can’t help but help the demand side of the equation. So we feel really quite good about 2012," he said.
Marriott is expanding its boutique hotel venture with boutique hotel operator Ian Schrager Co. to take advantage of growing demand for luxury hotels.
"We've been watching this space for 20 years" wondering whether it was "a big enough place for a company like Marriott to play," before deciding to partner with Schrager's company, Sorenson said.
The deal has worked out on both sides, with Schrager being able to take advantage of Marriott's global reach, and Marriott using the cache of working with Schrager.
Sorenson called Schrager's boutique hotels "a place where customers want to experience something different and a different ethos."
Update: In an earlier version the Hilton executive's last name was spelled incorrectly.