Hilton Hotels Corporation is engaged, together with its subsidiaries, in the ownership,
management and development of hotels, resorts and timeshare properties and the
franchising of lodging properties. Our system contained 2,173 properties, totaling
over 348,000 rooms. Of such properties, we owned an interest in and operated 122
hotels, leased seven hotels, managed 206 hotels owned by others and franchised
1,808 hotels owned and operated by third parties. Also included in the number
of properties in our system are 30 timeshare properties which we managed or franchised.
All of these properties are located in the United States, with the exception of
15 hotels which we own an interest in and/or manage and 50 hotels which we franchise.
Our hotel brands include Hilton, Hilton Garden Inn, Doubletree, Embassy Suites,
Hampton, Homewood Suites by Hilton and Conrad. We develop and operate timeshare
resorts through Hilton Grand Vacations Company and its related entities, which
we wholly own. We are also engaged in various other activities related or incidental
to the operation of hotels.
We operate in three reportable business segments which are based on similar
products or services: Hotel Ownership; Managing and Franchising; and Timeshare.
We operate hotels through our brands described below, which target a wide variety
of markets and geographic areas. According to data from Smith Travel Research,
in 2003, our Hilton, Hilton Garden Inn, Embassy Suites, Homewood Suites by Hilton
and Hampton brands all commanded significant market share premiums in the system-wide
RevPAR (rooms revenue divided by the number of available rooms) index, which
represents the share of RevPAR these properties attain versus their respective
competitive sets.
Hilton
Hilton hotels are our upscale, full-service hotels that typically include swimming
pools, gift shops and retail facilities, meeting and banquet facilities, restaurants
and lounges, room service, parking facilities and other services. The Hilton
brand also includes Hilton Suites hotels which are upscale, extended stay all-suite
hotels. As of December?31, 2003, there were 230 Hilton hotels, representing
89,012 rooms, located in 37 states, the District of Columbia, Canada and Mexico.
Hilton Garden Inn
Hilton Garden Inn hotels are our upper mid-market, limited service hotels that
utilize a modular design constructed around a courtyard containing an indoor
or outdoor swimming pool. In 2003, the Hilton Garden Inn brand earned the first
place J.D. Power Award for "Highest Customer Satisfaction" in its
category for a second consecutive year. As of December?31, 2003, there were
183 Hilton Garden Inn hotels, representing 25,010 rooms, located in 38 states,
the District of Columbia, Canada and Mexico.
Doubletree
Doubletree hotels are our full-service hotels in the mid-market to upscale
hotel category. The Doubletree brand also includes the Doubletree Guest Suites
all-suite hotels and the moderately priced Doubletree Club hotels. As of December?
31, 2003, there were 155 Doubletree hotels, representing 40,614 rooms, located
in 38 states, the District of Columbia, Canada and Latin America.
Embassy Suites
Embassy Suites are our upscale, all-suite hotels that feature two-room guest
suites with a separate living room and dining/work area and a complimentary
cooked-to-order breakfast. Most Embassy Suites hotels are built around a landscaped
atrium. In 2003, the Embassy Suites brand earned the first place J.D. Power
Award for "Highest Customer Satisfaction" in its category for a fifth
consecutive year, a first in the history of the J.D. Power Award in the lodging
category. As of December?31, 2003, there were 174 Embassy Suites, representing
42,553 rooms, located in 37 states, the District of Columbia, Canada, Dominican
Republic, Puerto Rico and Latin America.
Homewood Suites by Hilton
Homewood Suites by Hilton are our upscale, extended stay hotels that feature
residential style accommodations including business centers, swimming pools,
convenience stores and limited meeting facilities. In 2003, the Homewood Suites
by Hilton brand earned the first place J.D. Power Award for "Highest Customer
Satisfaction" in its category.
Hampton
Hampton Inn hotels are our moderately priced hotels with limited food and beverage
facilities. The Hampton brand also includes Hampton Inn?& Suites hotels
which offer both traditional hotel room accommodations and apartment style suites
within one property.
Other Brands
In addition to our hotel brands described above, as of December?31, 2003, 16
hotels, representing 5,347 rooms, were operated under our Conrad brand, described
below, or under third party brands pursuant to contractual arrangements.
? Conrad. Conrad hotels are our upscale, full-service hotels located primarily
outside the United States. As of December?31, 2003, we managed, and in some
cases partially owned, 11 Conrad hotels, representing 3,902 rooms, located in
Belgium, Egypt, England, Hong Kong, Ireland, Singapore, Thailand and Turkey.
Future development of Conrad hotels is subject to our agreements with Hilton
Group plc.
Competition
We seek to maintain the quality of our lodging business while expanding both
domestically and internationally, primarily through franchising and the addition
of management contracts. We intend to improve our business by leveraging our
strong brand names, maximizing operating efficiencies, utilizing cost containment
programs and expanding and enhancing properties. We may also acquire or develop
properties as appropriate, either directly or through investments in joint ventures.
Our position as a multi-branded owner, operator, manager and franchisor of
hotels makes us one of the largest hotel companies in the United States. Competition
in the industry is based primarily on the level of service, quality of accommodations,
convenience of locations and room rates. Competition from other hotels, motels
and inns, including facilities owned by local interests and facilities owned
by national and international chains, is vigorous in all areas in which we operate
or franchise our facilities. Our hotels also compete generally with facilities
offering similar services and located in cities and other locations where our
hotels are not present. If hotel capacity is expanded by others in a city where
our branded hotels are located, competition will increase. Competition in the
timeshare business is based primarily on the quality and location of timeshare
resorts, the pricing of timeshare intervals and the availability of program
benefits, such as exchange programs.