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Hilton quickens its global growth

June 04, 2007|Kathy M. Kristof | Times Staff Writer

Hilton Hotels Corp. confirmed Sunday that it had reached agreements to develop about 55 hotel properties in Russia, Britain and Central America with a group of partners.

"HHC does have agreements in place to form alliances for development in the three markets outlined, which is expected to result in around 55 hotels in total," said Linda Bain, vice president of international communications for the Beverly Hills-based company.

Hilton is expected to announce today that it will partner with London & Regional Properties Inc. to develop hotels in Russia. It will work with Shiva Hotels Ltd. to expand in Britain and Ireland.

It will ally with Caribbean Property Group to develop hotels in Puerto Rico, Costa Rica, Panama, the Dominican Republic and Trinidad, the company confirmed.

The partners are expected to invest $1.7 billion on construction, which was first noted in a Wall Street Journal online report Sunday.

The move is part of an effort to extend Hilton's international presence through management contracts and franchises with established real estate development firms, allowing Hilton to remain "asset light," Bain said.

President Matthew Hart, likely to assume the chief executive post, referred to the plans in a call to analysts last year, saying: "This worldwide growth strategy will become a large part of the overall Hilton story."

Indeed, the company intends to develop 1,000 new hotels outside the U.S. in the next 10 years, Bain said.

Last year, Hilton paid $5.7 billion to buy Hilton Group in Britain and forged alliances to build 100 properties in India and China. The latest alliances are another step in the fast-paced international growth plan, she said.

"These deals indicate momentum in our strategy to grow substantially internationally," Bain said. "Since the acquisition of the Hilton International, we have increased our development teams around the world -- people -- as well as our development resources -- offices.

"This is resulting in a great deal of interest from property owners and developers, such as those involved in the Russian, U.K. and Central American deals."

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