Employee Retention of Hilton Hotels Corporation : Hilton Worldwide (formerly, Hilton Hotels Corporation) is a global hospitality company. It is owned by the Blackstone Group, a private equity firm. As of November 2010 Hilton brands encompass over 3,600 hotels with 600,000 rooms in 82 countries.[1] Hilton is ranked as the 36th largest private company in the United States by Forbes.[2]
The company owns, manages, or franchises a portfolio of brands, including Hilton Hotels & Resorts, Conrad Hotels, Doubletree, Embassy Suites Hotels, Hampton Inn, Hampton Inn & Suites, Hilton Garden Inn, Hilton Grand Vacations Company, Homewood Suites by Hilton, Home2 Suites by Hilton and The Waldorf-Astoria Collection.
It was founded by Conrad Hilton in Cisco, Texas and was headquartered in Beverly Hills, California from 1969 until 2009. The company moved to Tysons Corner, unincorporated Fairfax County, Virginia, near McLean in August 2009.
Hilton Hotels Corporation to Be Acquired by Blackstone Investment Funds
BEVERLY HILLS, Calif.--(BUSINESS WIRE)--July 3, 2007--Hilton Hotels Corporation (NYSE:HLT) announced today that it has entered into a definitive merger agreement with The Blackstone Group's (NYSE:BX) real estate and corporate private equity funds in an all-cash transaction valued at approximately $26 billion. Under the terms of the agreement, Blackstone will acquire all the outstanding common stock of Hilton for $47.50 per share. The price represents a premium of 40% over yesterday's closing stock price.
Hilton's Board of Directors approved the transaction today. It is anticipated that the transaction will close during the fourth quarter of 2007; completion is subject to the approval of Hilton's shareholders, as well as other customary closing conditions. A special shareholders meeting will be scheduled at a later date.
The acquisition brings together a leading global hospitality company with Blackstone's extensive portfolio of hotels and resorts. Blackstone currently owns more than 100,000 hotel rooms in the U.S. and Europe, ranging from limited service properties such as La Quinta Inns and Suites to LXR Luxury Resorts and Hotels. The LXR collection includes such upscale properties as The Boulders Resort and Spa (Arizona), The El Conquistador Resort (Puerto Rico), The Boca Raton Resort and Club (Florida), The Golden Door Spa (San Diego), and The London NYC (New York). Blackstone's holdings complement Hilton's unparalleled family of brands, which include Hilton, Conrad Hotels & Resorts, Doubletree, Embassy Suites, Hampton Inn, Hilton Garden Inn, Hilton Grand Vacations, Homewood Suites by Hilton, and The Waldorf=Astoria Collection.
Blackstone intends to invest in the Hilton properties and brands globally to enhance and grow the business for the benefit of owners, franchisees and customers. Over the last fifteen years, Blackstone has been the largest private investor in hospitality worldwide and it has a strong track record of reinvesting in its hotel properties. Blackstone has invested approximately $1 billion in redevelopment capital in its LXR properties over the last three years; it has also grown the La Quinta brand by approximately 45% since its acquisition in January 2006.
Stephen F. Bollenbach, Hilton's co-chairman and chief executive officer, said: "Our priority has always been to maximize shareholder value. Our Board of Directors concluded that this transaction provides compelling value for our shareholders with a significant premium. We are delighted that a company with the resources and reputation of Blackstone fully appreciates the value inherent in our global presence, strong brands, industry leading marketing and technology programs, and unique portfolio of hotel properties."
Jonathan Gray, Senior Managing Director, Blackstone, commented, "It is hard to imagine a better strategic fit for us than Hilton with its world-class people, brands and network of hotels. This transaction is about building the premier global hospitality business. We are committed to investing in the company and working with Hilton's outstanding owners and franchisees to continue to grow and enhance the business."
Michael Chae, Senior Managing Director, Blackstone, added: "Blackstone's real estate and corporate private equity funds collaborated on the acquisition of Hilton, demonstrating Blackstone's unique ability to undertake such a transaction. We look forward to working with Hilton's management team and employees to enhance the value of the company."
Blackstone views Hilton as an important strategic investment; no significant divestitures are envisaged as a result of this transaction.
The transaction is not contingent on the receipt of financing. Financing commitments have been provided by Bear Stearns, Bank of America, Deutsche Bank, Morgan Stanley and Goldman Sachs. These institutions also served as financial advisors to Blackstone. Simpson Thacher & Bartlett LLP acted as legal advisor to Blackstone. UBS Investment Bank and Moelis Advisors acted as financial advisors to Hilton, and Sullivan & Cromwell LLP acted as legal advisor to Hilton.
At Hilton, we strive to deliver outstanding products, services, and experiences around the world. We value your business and, more importantly, your loyalty. We recognize that privacy is an important issue. We have developed this Global Privacy Policy (this "Policy") to explain our practices regarding the personal information we collect when you visit this site. Some jurisdictions also require notice concerning other means of collecting personal information; for those jurisdictions, this Policy also explains our practices regarding personal information obtained from sources other than our websites, such as written or verbal communications or information collected when you visit one of our properties.
A genuine love for the business of hospitality and the desire to excel as a hotelier are slowly giving way to aspirations for better work-life balance, faster career growth and the need for better pay.
Through ages we have learnt that the only way to put the customer first in the hospitality industry is by putting the employee first. The rationale may not be very obvious, but it is certainly compelling. Satisfied employees lead to satisfied customers, the only kind we can afford to have in a service business like ours. Just the word "hospitality", which is derived from the word "hospice", having a Latin root in "hospitium's", meaning a philosophy; a style of care?, says it all. It implies a personal experience delivered by a human being. An architecturally perfect hotel building doesn't form a part of fond memories of a guest as does a memorable direct experience he had involving a hotel employee! Jim Hartigan, Senior Vice President for Customer Quality and Performance for Hilton Hotels Corporation puts it aptly, "Quite frankly, whatever product we have, a competitor can copy. A certain kind of bed, a television, a shower head, all of this can be copied. What can't be replicated is the genuine, personal service." Indeed it's a truth no one can belie, a large part of what draws customers - especially repeat customers - is how well they are served.
Worldwide researches have suggested that employee turnover is among the highest in the hospitality industry. Studies have shown that the average turnover level among non-management hotel employees in the US is about 50%, and about 25% for management staff. Estimates of average annual employee turnover range from around 60 to 300 percent, according to research conducted by the American Hotel and Motel Association. Retention experts say hotels spend thousands every year for each new employee they must train to replace a seasoned worker who leaves. It is no longer a startling fact that the cost of losing an employee is between half and one-and-a-half times their annual salary!
My efforts to understand the reasons and motivations behind the decision for a job change - from one hotel to another or from the industry to another sector - highlight a well-known reality: that people are inherently driven to maximize benefits or satisfaction, and that they assume a lifetime perspective when making choices concerning job changes. The expected benefits or utility for the employee comes in the form of higher future earnings, increased job satisfaction and enrichment over one's lifetime and a greater appreciation of his personal interests.
Many of those associated with the hotel industry maintain that hotel positions, do not, by and large, offer enough creative and intellectual development. Helmut Meckelburg, General Manager and Area Director - Goa, Taj Group of Hotels, is of the opinion that once people have understood the needs and demands of their particular job, their cultural learning and intellectual stimulation comes to an end quite quickly, causing people to lose interest in their job and look elsewhere. Moreover, the knowledge that people are being paid less than what they might in another industry, for a comparable position, adds to this sense of frustration. Also, according to Mr Meckelburg, the management style and HR practices that are used to stimulate, communicate, recognize, reward and incentive personnel have, in many instances, not moved with the times.
There are studies that support the fact that employees leave an organization for many reasons, but two common causes are the quality of the selection system and the quality of leadership. Our hiring processes do not ensure that the applicant would fit in well with the culture of a particular property, or even be well suited for hospitality as a profession! Moreover, conventionally, hotels support a culture that fosters dependence and relies on the traditional chain of command, and not all supervisors are good managers and good team leaders. It a well-known fact that the overwhelming majority of people who leave any hotel leave because of the way they are treated every day. Lack of appreciation, lack of teamwork and the perception that the company doesn't care about employees are consistently the highest-rated reasons for low job satisfaction.
A genuine love for the business of hospitality, and the desire to excel as a hotelier, are slowly giving way to aspirations for better work-life balance, faster career growth and the need for better pay. Increasingly, people are less willing to make compromises on a personal front to establish themselves in this profession, when more attractive options beckon from outside the industry. Interesting is the fact that 60-70% of Lausanne graduates decide to go into banking, insurance, and the customer care industry.
The company owns, manages, or franchises a portfolio of brands, including Hilton Hotels & Resorts, Conrad Hotels, Doubletree, Embassy Suites Hotels, Hampton Inn, Hampton Inn & Suites, Hilton Garden Inn, Hilton Grand Vacations Company, Homewood Suites by Hilton, Home2 Suites by Hilton and The Waldorf-Astoria Collection.
It was founded by Conrad Hilton in Cisco, Texas and was headquartered in Beverly Hills, California from 1969 until 2009. The company moved to Tysons Corner, unincorporated Fairfax County, Virginia, near McLean in August 2009.
Hilton Hotels Corporation to Be Acquired by Blackstone Investment Funds
BEVERLY HILLS, Calif.--(BUSINESS WIRE)--July 3, 2007--Hilton Hotels Corporation (NYSE:HLT) announced today that it has entered into a definitive merger agreement with The Blackstone Group's (NYSE:BX) real estate and corporate private equity funds in an all-cash transaction valued at approximately $26 billion. Under the terms of the agreement, Blackstone will acquire all the outstanding common stock of Hilton for $47.50 per share. The price represents a premium of 40% over yesterday's closing stock price.
Hilton's Board of Directors approved the transaction today. It is anticipated that the transaction will close during the fourth quarter of 2007; completion is subject to the approval of Hilton's shareholders, as well as other customary closing conditions. A special shareholders meeting will be scheduled at a later date.
The acquisition brings together a leading global hospitality company with Blackstone's extensive portfolio of hotels and resorts. Blackstone currently owns more than 100,000 hotel rooms in the U.S. and Europe, ranging from limited service properties such as La Quinta Inns and Suites to LXR Luxury Resorts and Hotels. The LXR collection includes such upscale properties as The Boulders Resort and Spa (Arizona), The El Conquistador Resort (Puerto Rico), The Boca Raton Resort and Club (Florida), The Golden Door Spa (San Diego), and The London NYC (New York). Blackstone's holdings complement Hilton's unparalleled family of brands, which include Hilton, Conrad Hotels & Resorts, Doubletree, Embassy Suites, Hampton Inn, Hilton Garden Inn, Hilton Grand Vacations, Homewood Suites by Hilton, and The Waldorf=Astoria Collection.
Blackstone intends to invest in the Hilton properties and brands globally to enhance and grow the business for the benefit of owners, franchisees and customers. Over the last fifteen years, Blackstone has been the largest private investor in hospitality worldwide and it has a strong track record of reinvesting in its hotel properties. Blackstone has invested approximately $1 billion in redevelopment capital in its LXR properties over the last three years; it has also grown the La Quinta brand by approximately 45% since its acquisition in January 2006.
Stephen F. Bollenbach, Hilton's co-chairman and chief executive officer, said: "Our priority has always been to maximize shareholder value. Our Board of Directors concluded that this transaction provides compelling value for our shareholders with a significant premium. We are delighted that a company with the resources and reputation of Blackstone fully appreciates the value inherent in our global presence, strong brands, industry leading marketing and technology programs, and unique portfolio of hotel properties."
Jonathan Gray, Senior Managing Director, Blackstone, commented, "It is hard to imagine a better strategic fit for us than Hilton with its world-class people, brands and network of hotels. This transaction is about building the premier global hospitality business. We are committed to investing in the company and working with Hilton's outstanding owners and franchisees to continue to grow and enhance the business."
Michael Chae, Senior Managing Director, Blackstone, added: "Blackstone's real estate and corporate private equity funds collaborated on the acquisition of Hilton, demonstrating Blackstone's unique ability to undertake such a transaction. We look forward to working with Hilton's management team and employees to enhance the value of the company."
Blackstone views Hilton as an important strategic investment; no significant divestitures are envisaged as a result of this transaction.
The transaction is not contingent on the receipt of financing. Financing commitments have been provided by Bear Stearns, Bank of America, Deutsche Bank, Morgan Stanley and Goldman Sachs. These institutions also served as financial advisors to Blackstone. Simpson Thacher & Bartlett LLP acted as legal advisor to Blackstone. UBS Investment Bank and Moelis Advisors acted as financial advisors to Hilton, and Sullivan & Cromwell LLP acted as legal advisor to Hilton.
At Hilton, we strive to deliver outstanding products, services, and experiences around the world. We value your business and, more importantly, your loyalty. We recognize that privacy is an important issue. We have developed this Global Privacy Policy (this "Policy") to explain our practices regarding the personal information we collect when you visit this site. Some jurisdictions also require notice concerning other means of collecting personal information; for those jurisdictions, this Policy also explains our practices regarding personal information obtained from sources other than our websites, such as written or verbal communications or information collected when you visit one of our properties.
A genuine love for the business of hospitality and the desire to excel as a hotelier are slowly giving way to aspirations for better work-life balance, faster career growth and the need for better pay.
Through ages we have learnt that the only way to put the customer first in the hospitality industry is by putting the employee first. The rationale may not be very obvious, but it is certainly compelling. Satisfied employees lead to satisfied customers, the only kind we can afford to have in a service business like ours. Just the word "hospitality", which is derived from the word "hospice", having a Latin root in "hospitium's", meaning a philosophy; a style of care?, says it all. It implies a personal experience delivered by a human being. An architecturally perfect hotel building doesn't form a part of fond memories of a guest as does a memorable direct experience he had involving a hotel employee! Jim Hartigan, Senior Vice President for Customer Quality and Performance for Hilton Hotels Corporation puts it aptly, "Quite frankly, whatever product we have, a competitor can copy. A certain kind of bed, a television, a shower head, all of this can be copied. What can't be replicated is the genuine, personal service." Indeed it's a truth no one can belie, a large part of what draws customers - especially repeat customers - is how well they are served.
Worldwide researches have suggested that employee turnover is among the highest in the hospitality industry. Studies have shown that the average turnover level among non-management hotel employees in the US is about 50%, and about 25% for management staff. Estimates of average annual employee turnover range from around 60 to 300 percent, according to research conducted by the American Hotel and Motel Association. Retention experts say hotels spend thousands every year for each new employee they must train to replace a seasoned worker who leaves. It is no longer a startling fact that the cost of losing an employee is between half and one-and-a-half times their annual salary!
My efforts to understand the reasons and motivations behind the decision for a job change - from one hotel to another or from the industry to another sector - highlight a well-known reality: that people are inherently driven to maximize benefits or satisfaction, and that they assume a lifetime perspective when making choices concerning job changes. The expected benefits or utility for the employee comes in the form of higher future earnings, increased job satisfaction and enrichment over one's lifetime and a greater appreciation of his personal interests.
Many of those associated with the hotel industry maintain that hotel positions, do not, by and large, offer enough creative and intellectual development. Helmut Meckelburg, General Manager and Area Director - Goa, Taj Group of Hotels, is of the opinion that once people have understood the needs and demands of their particular job, their cultural learning and intellectual stimulation comes to an end quite quickly, causing people to lose interest in their job and look elsewhere. Moreover, the knowledge that people are being paid less than what they might in another industry, for a comparable position, adds to this sense of frustration. Also, according to Mr Meckelburg, the management style and HR practices that are used to stimulate, communicate, recognize, reward and incentive personnel have, in many instances, not moved with the times.
There are studies that support the fact that employees leave an organization for many reasons, but two common causes are the quality of the selection system and the quality of leadership. Our hiring processes do not ensure that the applicant would fit in well with the culture of a particular property, or even be well suited for hospitality as a profession! Moreover, conventionally, hotels support a culture that fosters dependence and relies on the traditional chain of command, and not all supervisors are good managers and good team leaders. It a well-known fact that the overwhelming majority of people who leave any hotel leave because of the way they are treated every day. Lack of appreciation, lack of teamwork and the perception that the company doesn't care about employees are consistently the highest-rated reasons for low job satisfaction.
A genuine love for the business of hospitality, and the desire to excel as a hotelier, are slowly giving way to aspirations for better work-life balance, faster career growth and the need for better pay. Increasingly, people are less willing to make compromises on a personal front to establish themselves in this profession, when more attractive options beckon from outside the industry. Interesting is the fact that 60-70% of Lausanne graduates decide to go into banking, insurance, and the customer care industry.
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