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Hilton Hotels receives a new chief executive

Blackstone Group picks an industry rival to lead the company it just acquired. The new man is called 'strong' choice.

October 30, 2007|Kimi Yoshino | Times Staff Writer

In its first major move since closing the $26-billion deal to buy Beverly Hills-based Hilton Hotels Corp., Blackstone Group on Monday named the head of an industry rival as Hilton's new top executive.

Christopher Nassetta, 45, had been president and chief executive of Host Hotels & Resorts, the largest publicly traded hotel owner of luxury, branded properties such as Marriott, W, Four Seasons and Fairmont. He replaces Hilton's retiring CEO, Stephen Bollenbach.

Before the sale, Hilton had named company President and Chief Operating Officer Matthew Hart to replace Bollenbach when he leaves at year's end. Hart will step down but remain on the board, Blackstone officials said.

Nassetta praised Bollenbach and Hart's leadership of the company and said in an interview Monday that he planned to "take what they started and accelerate it," particularly its push to expand internationally.

Hilton Hotels Corp. acquired Hilton International last year and announced plans to add 1,000 more international hotels in 10 years. This summer, it formed development partnerships to add 55 hotels in Russia, Britain and Central America.

"Hilton is a phenomenal company with an incredible history to it and, in my opinion, an outstanding growth opportunity in front of it," Nassetta said.

Industry watchers have long praised Hilton for its strong leadership. The appointment of Nassetta, they said, continues that trend.

"It's not like they were buying a company in trouble. It's a very, very well-run company," said consultant Alan X. Reay, president of Irvine-based Atlas Hospitality Group. "It's not uncommon when companies are taken private for the company to bring in their own people."

Nassetta, he said, is a "very strong" choice.

At corporate headquarters in Beverly Hills, some employees said they had no advance word of the news.

Jonathan Gray, Blackstone's senior managing director, said: "Our goal with Hilton is to build the premier global hospitality company. Given his background overseeing the world's largest hotel ownership company, Chris understands the needs of hotel owners and is uniquely qualified to lead Hilton."

Unlike Host Hotels, which owns 121 properties with about 64,000 rooms, Hilton manages and operates most of its hotels but does not own them.

Nassetta said he had known Gray for 15 years and expected Blackstone to continue investing in Hilton, despite some early speculation that the private-equity company might break up the firm and sell it.

"I wouldn't be talking to you right now if I thought they were going to bust this up," Nassetta said. "This is very much a strategic acquisition. Their view is that this is their hotel platform."

He expects Blackstone to continue acquiring assets for Hilton, which has 2,896 properties with 500,000 rooms in 76 countries. Hilton's brands include Conrad Hotels & Resorts, Doubletree, Embassy Suites, Hilton Garden Inn, Hampton Inn, Homewood Suites and the Waldorf-Astoria Collection.

Host Hotels & Resorts, meanwhile, announced that it had appointed Chief Financial Officer W. Edward Walter as its new president and CEO. Goldman Sachs analyst Steven Kent said in a note that Nassetta was an "extremely valuable asset" to the company but did not expect the stock to move much because Walter is "very capable" of expanding on Nassetta's success.

Shares of Host Hotels closed at $21.55, down 82 cents, or 3.7%, on Monday.

Nassetta will move to Southern California next month from Arlington, Va., along with his wife and six daughters.


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