Hilton Hotels Corporation Case Study

Hilton Hotels Corporation is a leading hospitality company that owns, manages, and franchises over 2,000 hotels across the country. The company's international arm, Conrad Hotels, has locations in Australia, England, Ireland, Egypt, Belgium, Turkey, Hong Kong, and Singapore. Though publicly traded, the chain was for most of its history led by members of the Hilton family from 1919, when founder Conrad Hilton bought his first hotel. By the late 1940s, Hilton owned a worldwide chain of premium hotels. In the 1960s, Hilton sold its international operations and concentrated on management contracts and franchising. The company created innovative joint-venture arrangements that became standard industry practice. It then entered what would become a prime source of revenue for the company: casino-hotels. Hilton expanded into gaming in 1971; by 1989, gaming provided 44 percent of the company's income. In 1996, Barron Hilton relinquished day-to-day management of the chain to Stephen F. Bollenbach. Asserting that "Big companies do big things," Bollenbach revitalized the company with bold actions. He spun off the company's gaming operations as Park Place Entertainment Corporation in 1998. One year later he orchestrated the $3.7 billion acquisition of Promus Hotel Corporation, which added the Doubletree, Embassy Suites, Hampton Inn, Homewood Suites, and Harrison Conference Centers brand names to its line-up.

Conrad Nicholson Hilton was born in San Antonio, New Mexico, the second of eight children. Before he was 18, Conrad had worked as a trader, a clerk, a bellboy, and a pianist. By age 25 he had also worked in politics and banking. In 1919, following the death of his father, Hilton left the army and went to Texas. He had intended to take advantage of the oil boom by buying a small bank. Instead, he found bank prices prohibitive and hotels so overbooked he could not find a place to sleep. When one owner in Cisco, Texas, complained he would like to sell his property in order to take advantage of the oil boom, Hilton struck a deal. Hilton pulled together an investment group and the funds were transferred within a week. The Mobley, in Cisco, became Hilton's first hotel.

The hotel was booked solid, and Conrad and his partner, L.M. Drown, rented their own beds and slept on chairs in the office. They also converted much of the hotel's public space into additional guest quarters. Making use of wasted space became a hallmark of the Hilton chain. With the Mobley running smoothly, Hilton bought two more Texas properties in 1920; the Melba, in Fort Worth, and the Waldorf in Dallas--named after the prized New York hotel. In 1925 Conrad Hilton built the first hotel to carry his name, in Dallas.

With expansions well underway, Hilton consolidated his properties into Hilton Hotels, Incorporated, in 1929, when the stock market crashed. The El Paso Hilton was completed in November 1930 and