Hilton partners with Small Luxury Hotels of the World: Travel Weekly

Hilton unveiled an exclusive partnership with Small Luxury Hotels of the World (SLH), with Hilton CEO Chris Nassetta calling it “a perfect combination” during the company’s Q4 earnings call on Wednesday.

“This partnership will meaningfully expand our luxury distribution, as we expect to add the majority of their over 500 hotels to our system,” Nassetta said.

He added that SLH’s outsized presence in resort markets and the collection’s “unique and hard-to-duplicate” locations around the world will be complementary to Hilton-owned luxury brands Waldorf Astoria, Conrad and LXR.

Under the agreement, SLH member hotels who opt in to the program will be bookable across all Hilton channels, with the company’s more than 180 million Hilton Honors loyalty program members also able to earn and redeem points at these participating SLH properties.

Nassetta said Hilton will begin bringing SLH hotels into its system this spring, with participating properties required to pay fees only on business driven through Hilton’s channels.

“We expect over time to drive a meaningful portion of system revenues for SLH,” said Nassetta. “It’s a compelling value proposition for them to be opting in, which is why we have confidence that the majority of the system will ultimately come in.”

Nassetta emphasized that even with the SLH partnership, Hilton remains committed to further luxury expansion. The company continues its development of a luxury lifestyle concept.

“We’re hard at work,” said Nassetta. “And I think you should expect sometime this year, hopefully sooner than later, to see us enter that space. And we think that’s something that is totally different than what we’re trying to do with SLH.”

Founded in 1989, SLH has 560 member hotels. Properties are typically small, averaging 50 guestrooms. According to SLH, all member hotels undergo an annual quality inspection, which involves a checklist of more than 750 criteria.

Prior to the Hilton alliance, SLH had partnered with Hyatt Hotels Corp. in 2018, enabling World of Hyatt members to earn and redeem points at select SLH properties.

Is Graduate Hotels on Hilton’s radar?

During the call, Nassetta responded to questions about Hilton’s rumored interest in college town-focused Graduate Hotels.

While Nassetta reiterated the company’s position of not commenting on rumors and speculation, he acknowledged that a brand acquisition would be a different approach for Hilton.

“Our attitude on M&A is really the same as it’s always been,” said Nassetta. “We’ve been consistent. We haven’t done anything, but every time I’ve been asked about [making acquisitions] the last 10 years of being public, I’ve said, ‘Never say never.'”

Nassetta added that Hilton has “a very tough filtration system” for potential acquisitions.

“For the last 16 going on 17 years that I’ve been here, we’ve looked at pretty much everything, and nothing has passed through that filter,” he said, although he hinted at potentially favorable market conditions for making an acquisition.

“The environment we’re in is a little bit different for a lot of reasons: interest rates and otherwise more stress in the system than normal,” said Nassetta. “That probably, I think, presents more opportunities to do things like this.”