Thursday, December 30, 2010
The Hilton chain had come a long way from its beginning in 1925 when Conrad Hilton built the first hotel to carry his name in Dallas, Texas. By 1998 more than 400 Hilton hotels—ranging from resorts and casinos to airport business hotels—were operating in 50 countries. The company’s 1964 decision to spin off its global properties into a separate entity, however, impeded Hilton from developing a consistent worldwide image. After Hilton’s international wing was acquired by Trans World Airlines, HHC and HIC agreed not to develop their franchises in the other’s zones. Nevertheless, the erstwhile siblings bickered over trademarks. In the early 1990s HHC had struggled to forge an identity. Pernicious price wars among upper-class hotels led HHC, and its ad agency McCann-Erickson, to craft ads focused more on price and perks than on the chain’s own attributes. The result was a frequently chaotic marketing strategy that relied heavily on special promotions, often to the detriment of HHC’s bottom line. In an effort to rectify this situation, HHC severed its relationship with McCann in 1992 and hired Daley & Associates to develop a new ad campaign. The resulting ‘‘Take Me to the Hilton’’ effort helped the company overcome some of its difficulties, but HHC was still hampered by its inability to expand in overseas markets. The burgeoning travel market, both domestically and internationally, had generated a wave of consolidations in the industry, as hotel chains teamed up in order to offer broader options to consumers. As an industry insider explained in the January 16, 1995, issue of Brandweek, ‘‘just to be a domestic brand does not insure long-term visibility.’’ HIC faced similar limitations by virtue of its exclusion from the sizeable U.S. market. Recognizing the importance of presenting a more unified front to its rivals, HHC and HIC linked their advertising, sales, loyalty programs, and development strategies, and then sought to leverage this new alliance into enhanced business opportunities.