Hilton CEO sees improvement in midscale brands

WASHINGTON, D.C. — Hilton President and CEO Chris Nassetta said he is seeing improvements in the company’s midscale brands, which include more mid-week travel, according to a story in Semafor. He said that is a sign that the middle class is starting to participate in a recovery led by the highest earners.

Nassetta was interviewed at the Semafor World Economy conference on Tuesday in Washington, D.C. When asked about the K-shaped economy that has been driving hospitality results over the past few years, Nassetta said Hilton’s midscale brands, like Hampton and Garden Inn, are seeing better results these days.

“The middle and the bottom are going to come up ultimately to meet the top,” he said during the event. “The tide is coming in and the tide is unstoppable.”

The change is happening, Nassetta said, due to a combination of factors, including tax policy, lower interest rates, private-sector spending on AI, and public-sector infrastructure spending launched by the Biden administration. Nassetta called it the “C” recovery (C meaning convergence).

Despite the current war in Iran, Nassetta also said he remains optimistic about hotel growth in the Middle East, where Hilton operates 80 hotels and has a pipeline of more than 100 more being built in the next few years. He said there are no plans for Hilton to pause its asset-light expansion in the region.

“I think the Middle East will be fine,” Nassetta said. “I think it will continue, in the long run, to be one of the greatest growth markets we have.”

When asked what worries him, the notoriously optimistic Nassetta said he has a lot of worries, but inflation isn’t one of them.

“If you look at it intellectually, when you go into a massive innovation technological productivity cycle, it is always deflationary, right? So, yeah, you have some inflationary forces, like all the investment that's going on and all the infrastructure and AI and the complex behind AI, but behind it all, over the next three, five or 10 years, productivity associated with AI has to, in my opinion, be deflationary.”

What worries Nassetta, pointing to Iran again, is the safety of Hilton’s workers and customers in potentially dangerous areas of the world.

“We're in 150 countries, including big business in the Middle East and (what I do worry about), because I have to spend a lot of my time worrying about it, is protecting customers and protecting hundreds of thousands of team members we have in very difficult parts of the world. Those kinds of things I worry about… There is a risk that those things can spiral in ways that are way above my pay grade and outside of my field of expertise. That could impact the kind of positive view that I have here. But thus far, I haven't seen it.”