Hilton Moves To Washington DC
Hilton Hotels earlier this week announced their plans to move from Beverly Hills, CA to the Washington DC area – either Maryland or Virgina.
Wow. This was a surprise!
It’s great news for the Washington DC area in this down economy, and pretty much makes the Washington DC area the lodging capital of America. In addition to Hilton - Choice Hotels (located in Silver Springs, MD) and Marriott (located in Bethsada, MD) plus a large number of hotel management and hotel investment companies are all located within the metro Washington DC area.
I’m very curious as to why this move was made in the first place, even though Hilton has been headquartered in Beverly Hills for decades, a move across the country is a huge undertaking, requiring almost all staff to either move with the company or look elsewhere for work. Does Hilton have the confidence that they will still be able to keep their talent after the move? It’s asking a lot to uproot families from an area that they most likely have grown up in to move to an unfamiliar area – with their other choice being to look for a new job in a horrible job market. I’d say it’s a way for Hilton to encourage attrition without having layoffs, but the costs of moving a headquarters operation is much more expensive than it would cost for layoffs and severance packages.
It’s been suggested that a major reason for the move to the DC Metro area is due to the abundance of hospitality talent in the area, but that’s not good enough reason on its own to move a major international firm’s headquarters over 2,000 miles away. There is no doubt that Hilton is on the verge of a huge corporate change – the launch of Project Global 21, and another major announcement to be made on Monday at ALIS, plus the new regime installed once Blackstone purchased and finally seems to be ready to put Hilton back on the map in terms of being an aggressive competitor in the domestic and international hotel field.
This talk about Hilton moving reminds me of Starwood’s big move from Phoeniz, AZ to NY after they bought Westin & Sheraton, and in 2006 Starwood even announced plans for another major move – from its 200,000 sqft headquarters in White Plains to at 400,000 sqft headquarters either Norwalk, or Stamford, CT or another location in Westchester County, NY. Since that announcement was made, nothing has been said and I think it’s safe to assume that any plans to move to another headquarters is just not viable because of the economic climate.
One good thing about the Hilton move is rent would be alot less expensive than it would have been a few years ago, and it also gives Hilton the ability to start with a clean slate in office design and environment helping employees feel immersed in what they are working for…
Plus – Hilton is alot closer to NJ, where I live, and with the possiblity of all these job openings, maybe thats where I can start to make my mark in hotel development.
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Category: alis conference, choice hotels, construction, design, hilton, Hotel Development, Hotels, marriott, real estate, Starwood Hotels
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Andrew,
There are probably a lot of winning elements of this.
1. It’s a chance to radically re-organize in tough times
2. It’s a chance to modify the culture a great deal.
3. It’s close to the Blackstone principals who probably like to monitor their biggest investment
4. The CEO Chris Nassetta is reportedly from Virginia and previously ran Host Hotels that is headquartered in Bethesda, MD so it keeps him at home.
5. As mentioned in your post, there are a lot of great people to choose from in staffing the headquarters between Marriott, Choice, Host as well as Thayer, Interstate and a number of other companies.
I joined one of the big brand companies shortly after they moved their headquarters one city to another city earlier in my career. The opportunity was definitely there to drastically restructure how work was done, downsize the organization, and totally change the culture. I think this sounds like a smart move from the outside.
Mike