Hilton's direct web channels are outstripping other distribution methods, according to figures shared by the company.
Reporting earnings for Q4 and full-year 2018 at Hilton Worldwide, the hotel giant’s president and chief executive Chris Nassetta revealed web direct channels were growing at three times the rate of other channels.
Hilton launched its latest marketing campaign - “Expect Better” - in September 2018, promising a price match guarantee for those booking via direct channels as well as additional perks for those coming via the Hilton Honors loyalty program.
The group was one of a number of large hotel companies pushing back at online travel agencies with its “Stop Clicking Around” campaign three years ago.
During an earnings call, Nassetta says the company “remains very focussed on driving the direct relationship” with customers.
“We still believe there is more we can do. There’s a marketing element to it but we’re making sure the value proposition is most compelling from how we price, from the standpoint of the technology and the other things that enable a better experience for folks that are part of our Honors system. We are going to constantly be reinvesting and focusing on that but it’s working.”
He adds that direct channels now represent about 75% of total business with web channels about half of that.
The Honors loyalty program has seen significant growth over the course of 2018 with the addition of 14 million new members.
The goal is to have 100 million members by the end of 2019.
“We’re experiencing very high growth rates and I don’t think they are going to abate this year, I think the pace will continue.”
He says the company had developed the program to make it more appealing at both lower and higher tiers.
“Obviously we’re getting members from somewhere and to some degree benefitting from getting members from other programs, that are shifting their loyalty. We’re focusing on hyper compelling reasons for people to become a member. I can’t give hard data on who has come from where and to a degree we don’t care.”
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Nassetta went on to talk about engagement in the program with 50% of the 42 million members actively engaged meaning that they are spending in the hotels. He added that five years ago that would have been more like 15%.
Hilton Worldwide reported net income of $225 million for the fourth quarter and $789 million for 2018.
Adjusted EBITDA was $544 million for the quarter and just over $2 billion for the year which was slightly above its guidance.
Hilton’s development pipeline as of December 31, 2018 was more than 364,000 rooms, a 6% increase compared to the same period in 2017.