- Joined
- Dec 21, 2014
- Messages
- 9,833
- Reaction score
- 8,349
- Points
- 498
- Location
- California
- Resorts Owned
- HGVC, MVC Vistana
To answer one of my prior questions. Back of the envelope it appears that HGV brand licensing is not a significant income source to HLT - about 1% to the hotel side. What is unknown is whether HLT also receives referral fees for hotel guests who are directed to timeshare presentations but let's assume it is about another 1%. So about 2% overall (license plus hotel lead referral).
Bottom Line: HGV brand licensing is a small component of HLT income so the impact of a change on the brand reputation will be more important than a loss or gain of license income. Additional Diamond licenses won't move the needle. Brand impact will color how HLT views whether to keep or deny a licensing deal if HGV is acquired.
Details:
It appears that HGV paid as much as $98 million in 2018 to license the Hilton Brand name (see fin stmt below).
Hilton hotel (HLT) annual revenue in 2018 was $8.906B
Therefore HGV license constitutes only 1.1% of HLT revenue. If Diamond could double that by licensing additional properties it would be pure profit, but would not move the needle for HLT financial results (max 1.1% of incremental HLT revenue).
Referral revenue would not increase as additional Diamond properties would not drive incremental leads via the hotel system.
The incremental license revenue Diamond could bring to HLT is small considering the brand reputation risk with Diamond/Apollo, plus hassle factor of dealing with unknown Diamond executives.
Bottom Line: HGV brand licensing is a small component of HLT income so the impact of a change on the brand reputation will be more important than a loss or gain of license income. Additional Diamond licenses won't move the needle. Brand impact will color how HLT views whether to keep or deny a licensing deal if HGV is acquired.
Details:
It appears that HGV paid as much as $98 million in 2018 to license the Hilton Brand name (see fin stmt below).
Hilton hotel (HLT) annual revenue in 2018 was $8.906B
Therefore HGV license constitutes only 1.1% of HLT revenue. If Diamond could double that by licensing additional properties it would be pure profit, but would not move the needle for HLT financial results (max 1.1% of incremental HLT revenue).
Referral revenue would not increase as additional Diamond properties would not drive incremental leads via the hotel system.
The incremental license revenue Diamond could bring to HLT is small considering the brand reputation risk with Diamond/Apollo, plus hassle factor of dealing with unknown Diamond executives.
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