Building a New Hilton Hotel

hilton.com
© 2007 Hilton Hospitality, Inc. U.S./2007

Index
Building a New Hilton Hotel
Introduction From Dream to Reality Learning the Language, Navigating the Systems Hilton Communication Channels Online Resources Building Business

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The Pre-Opening Meeting The Pre-Opening Action Plans Ramping Up & Ongoing Support Hilton Brand Programs
Continuous Improvement Process The Customer Really Matters Hilton Serenity Collection™ Hilton Breakfast Hilton Fitness by Precor® Hilton Meetings® Hilton HHonors®

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Appendix
Timeline for Building a New Hilton Hotel At-a-Glance – A Brand New Hilton Hotel Key Department Personnel Glossary and Definitions

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Building a New Hilton Hotel
Building a New Hilton Hotel We believe in the transformational power of travel. We invite travelers to discover the innovative ways in which we help shape their personal journeys. We are inspiring guests to work, relax and enjoy, 24/7, regardless of their trip occasion. Our contemporary, fresh style encourages our guests to take advantage of the local experiences. When we say, “Travel should take you places,” we want to enhance our guests’ perceptions from their first impressions at booking through their entire experience as our guest. A stay at a Hilton Hotel should be transformative. The groundwork to support this commitment is laid months before the first Hilton guest registers at any Hilton Hotel or Resort. To create a transformative environment, we offer extensive resources, systems, people and attention-to-detail to bring your valuable hospitality asset smoothly through the new build cycle. The Hilton Brand bolsters its ownership with proven systems, dedicated brand performance personnel and ongoing training at all levels – before, during and after the grand opening. Depending on your hotel property’s size, location and climatic condition, the time required from finalization of a Franchise License Agreement (FLA) to opening as a brand new Hilton Hotel is based on the construction timelines. We offer the following brief overview to help you anticipate the process requirements and to familiarize you and your stakeholders with the Hilton way of doing business. From Dream to Reality Your team will work closely with a Hilton Hotels Corporation Developer (HHC Developer). After the review of the Uniform Franchise Offering Circular (UFOC) in the U.S. (or the Disclosure Documents in Canada and Mexico) and with the return of the appropriate acknowledgement receipt and the FTCrequired waiting period, the application process can begin. Your Developer and our Franchise Contract Administration Department will guide and assist. The first step is to secure “name approval” for the proposed property, which is included in the Application Presentation that is submitted to the Franchise Committee. A Proposed Deal Summary outlining details of the project, as well as our restrictions, fees and licensing term is drawn. Upon approval of the Deal Summary and application plans, milestone deadlines are set, including an anticipated opening date. Once the application is approved, an FLA is sent to you for execution. The scope of architectural design is one of the most important parts of the FLA approval process. Working with the full support of your Developer, all aspects of your hotel property will be evaluated and items identified that must be added or altered to bring the property in line with Hilton Brand Standards. All new build design projects require the prior approval of the Hilton Brand Design Team. The approvals along with the architectural scope become an integral part of the FLA. A Hilton Project Manager will work closely with your ownership group and onsite teams to accomplish all improvements, per the approved design plan prior to opening. Any proposed management company or General Manager (GM) appointment requires Hilton Brand approval. The criteria and the approval process will be discussed in detail immediately following the FLA approval. At this point, our Hilton Hotel Integration (HHI) team will begin to work with your hotel team to build your hotel’s information in the Hilton database system. HHI will also help your hotel’s personnel transition to become valued members of the Hilton Hotel Family. Learning the Language, Navigating the Systems With an executed FLA comes an identity – all hotels in the Hilton system are assigned specific codes. Your unique brand code will identify your property in various Hilton systems. Once the hotel has received its code, the property General Manager will also receive a Pre-Opening Kit (POK). The POK contains materials that will be used by a Hilton Brand trainer working with your hotel’s Human Resources Manager to train and direct the GM team on brand programs like Continuous Improvement Process (CIP). Hilton provides several regional brand trainers to ensure your onsite team receives the highest level of

The Hilton Brand is recognized and trusted by millions of world travelers. Our founder, Conrad Hilton’s philosophy is alive today – “It has been, and continues to be, our responsibility to fill the earth with the light and warmth of hospitality.” When a property raises the Hilton flag and logo, it signals a transformation to the contemporary, first-class hotel experience that travelers expect.
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support and training. POK materials include a comprehensive Hilton Brand Standards Manual, training videos and collateral material samples of our brand programs like CIP and the Customer Really Matters (CRM). The GM, department heads and various team members will be required to complete different levels of training in these programs. Hilton Communication Channels The ownership, management company, GM and other key designees will receive a login and password for Hilton OnQ Insider – our online resource for all things Hilton. This secure, web-based tool contains all resources, forms, reports, etc. necessary to run your hotel within our domain. Again, Hilton provides complete support and training to assist the GM and other key personnel to

become comfortable navigating this expansive yet convenient system. Your hotel will also receive three free email addresses for use by the GM, the Director of Sales (DOS) and the Revenue Manager (RM) or other designated team members. Additional Hilton email addresses are available at a small fee. With security requests approved and your brand-supplied email accounts in place, your pre-opening hotel will begin to receive property-specific communications. In addition, important brand communications will be sent weekly via the HiltonNews email newsletter. This is the electronic delivery method we use to disseminate critical information across the brand. All brand communications are sent to the GM and DOS email addresses. One of the first communications your hotel will receive is a Pre-Opening checklist. The checklist

provides an overview and guideline of major items for your team to be aware of prior to opening. Online Resources While your onsite teams, Hilton regional trainers and the HHI team are all working in concert together, there are other dedicated teams working behind the scenes in Memphis and Dallas to ensure that all systems are “Go!” on Opening Day. Hilton properties utilize the OnQ System for daily property management. The IBM-created hardware will be delivered to your hotel, fully loaded with management system software to handle all PMS (Property), RMS (Revenue) and FMS (Forecasting) operations and reporting. About the same time you will receive your POK, an OnQ Team from Memphis will conduct a two-day site

survey at your hotel to evaluate for OnQ system requirements. Once they determine your hardware and software needs, your Product Sales Analyst (PSA) will create a contract called the Hotel Information Technology Systems (HITS) Agreement for the purchase and delivery of your system. For most hotels, this investment falls between $60,000 and $150,000. After the return of the approved HITS Agreement, the necessary equipment will be built and shipped to the site. Your hotel will be required to set up a computer training room at least 60 days prior to opening (size will be determined by the total number of hotel workstations needed). You’ll receive computer bases training models and tutorial for team members to complete at various levels. Team members will be tested and must be certified at

appropriate levels for proficiency on the OnQ system prior to opening. It’s important to note that before, during and after opening, your onsite teams will have access to many regional and individual Hilton training options. We have trainers to train your trainers! After your hotel opens, a Hilton OnQ Specialist will spend two to three days at the hotel with the GM team to reinforce prior training and address issues and concerns. While opening an entire computerized operation system is no small task, we are confident that our OnQ Team and your well-trained hotel team members will deliver seamless customer service at opening. Building Business The Global Distribution Management (GDM) department in Dallas is in charge of building your database into our

system. This complex set of data will supply and affect your hotel’s bookings within the Central Reservations System (CRS), Global Distribution System and Hilton.com functions. It is very important to note that, depending on the number of hotels in the GDM pipeline, it will generally take a minimum of 30 days for the data-build to enter all systems. This data-build will not occur until after the Pre-Opening Meeting. Your onsite teams should be prepared to allot appropriate time to this important process.

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The Pre-Opening Meeting

The Pre-Opening Meeting is an intensive three-day onsite meeting:
Day 1: The HHI team will provide a general Hilton orientation and introduce your hotel’s management team to our Hilton operational processes. Day 2: Present added values, like efficiencies within the Hilton Family, Hilton HHonors and many other successful programs. Day 3: Review the competitive landscape, identify opening strategies and discuss the hotel’s participation in vital Hilton database systems.

The Pre-Opening Meeting
Hilton Hotel Integration (HHI) will contact your GM to set a date and deliver the agenda for this essential meeting. Typically these meetings include the GM, DOS, Revenue Manager and department heads. These sessions are open to your ownership/management companies, along with regional support. While your GM and team are working through the Pre-Opening Critical Path, two large Pre-Opening Workbooks will be sent from HHI for your review. The material contained in Workbooks #1 and #2 can be found on OnQ Insider as well. All forms and assessments in Workbook #1 must be completed before the Pre-Opening Meeting convenes.

During the meeting, assigned pre-work from the Workbook #1 will be reviewed. The Hotel Information Database (HIDB) Competitive Set Valuation, Requested Competitive Set, Value Assessment Tool and Room Type Configuration Forms must be completed and submitted in electronic format. Information submitted via HIDB will feed the GDS systems, Hilton.com, RFPs and internet sites. It is crucial that all information provided is accurate and complete. These completed forms from your Workbooks will be used to “build” you hotel in the Hilton systems by GDM in Dallas and OnQ in Memphis. During the Pre-Opening Meeting, Workbook #2 items will also be

addressed, including topics like rates and rate programs, consortia, national and local accounts, training, distribution channels, market category standardization and visibility on Hilton.com.

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The Pre-Opening Action Plans
As a result of the Pre-Opening Meeting, follow-up action plans are constructed. A Pre-Opening Action Plan will provide a Critical Path to follow in the final phase of Pre-Opening. A Pre-Opening Marketing & Sales Action Plan provides detailed requirements and recommendations for pre-opening priorities, rate and revenue maximization, internal procedures, marketing, advertising and more. Upon successful completion of required training – and assuming that the hotel and its databases are built into all systems – your hotel property will open under the Hilton Brand. Your hotel’s timeline may vary based on construction schedules.

Ramping Up & Ongoing Support
At Hilton, we pride ourselves on the consistently high level of service that is delivered to our guests. Meeting and maintaining high standards is paramount. This cannot be accomplished without effort and commitment from our ownership groups and their fine management teams. We value and appreciate those commitments and respond by making sure that your hotel’s GM and staff receive everything they need to make your hotel the category leader in your marketplace. After opening, you’ll receive regular visits, training, materials, evaluation and help from a Hilton Regional Director of Brand Performance Support, a Regional Brand Education Manager and a Regional Director of Revenue Management. We hope you will agree our detailed approach to hospitality is, in large part, what sets us apart from other brands.

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Hilton Brand Programs
Continuous Improvement Process (CIP) Hilton believes travel is an opportunity for transformation. Our Continuous Improvement Process allows us to keep our hotels in top condition and encourages our team members to learn new ways to prove themselves as the Masters of the Art of Hospitality. The Customer Really Matters (CRM) A company-wide initiative that reflects our commitment to providing our best guests the recognition they have earned. This program enables us to deliver an experience that meets specific needs and preferences, from maintaining customer profiles, to the check-in process, to first-time guests’ service recovery, to customer privacy policies. Our guests’ satisfaction is the most important thing in the world. Hilton Serenity The Hilton Serenity Collection is more than just a bed. With the Serta Suite Dreams® mattress, down duvets and pillows and 250 thread count linens, we offer our guests the most luxurious sleep they will ever experience. In the bath we add a touch of the spa experience with La Source® collection of bath amenities by Crabtree & Evelyn®. Hilton Breakfast Our new Hilton Breakfast is a breakfast offering that will meet each and every guest’s request for the taste and Collection™ service-style they prefer. This includes breakfast on-demand that offers both à la carte and menu selections. It is a comprehensive buffet featuring a descriptive “Follow Your Color” guide providing an easy way for healthconscious guests to choose their individual breakfast based on basic nutritional labeling (e.g., low fat, low sodium or high fiber selections). Hilton Fitness by Precor® Hilton Fitness by Precor offers the essentials for your workout: cardio machines, free weights, water, courtesy towels and room to stretch. New Hilton Fitness by Precor presents the latest equipment for a more personalized workout. Every Precor elliptical, treadmill and bike comes with its own TV screen and headphones. Hilton Meetings® Hilton Meetings is a product that provides a consistent, simple solution to the meeting planner who is booking a meeting for less than 50 people, in theater-style or smaller boardroomstyle meetings. Hilton HHonors® Hilton HHonors, our award-winning guest reward program, is the only hotel program that offers both hotel points and airline miles for each eligible stay. This unique ability to Double Dip®, along with Hilton’s industry-leading number of travel partners, has made the program an unqualified success with more than 13 million loyal HHonors members around the world. One of the most valuable assets of the HHonors program is its unprecedented access to loyalty programs and travel partner databases of frequent travelers. With this resource we are able to target our marketing efforts more cost effectively and deliver customer intelligence to help improve overall hotel performance.

Hilton combines a unique heritage with contemporary thinking, a passion for delivering outstanding service and care for our guests and team members. Hilton has blazed the trail in the hotel industry since 1919. All around the world Hilton is bringing ”Work, Relax, Enjoy” to life. Our core programs help make this possible for our guests 24/7.

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Appendix
Timeline for Building a New Hilton Hotel
This timeline illustrates steps and sequence for a typical new hotel opening. Your timeline may vary based on construction timelines. Phase I
– Disclosure – receive Hilton UFOC or Disclosure Documents – Return appropriate receipt to Developer – Make application and remit fees* – Application presentation submitted to Franchise Committee – Application approval – set Plans & Milestones deadlines – Finalize and execute Franchise License Agreement (FLA) – Submit design & construction documents for approval
C FO nU lto Hi

Appendix
At-a-Glance – A Brand New Hilton Hotel
From Dream to Reality
– Begin application process and sign UFOC – Milestone deadlines set for the entire scope of work as outlined in the Hilton Brand Design & Construction Standards – Hilton Brand design team to approve all new build design projects

Phase II
– Work with Hilton Project Manager on construction standards and schedules – Hotel information placed into HIDB system – Begin work with Hilton Hotel Integration team – Receive property code for identity in Hilton system – Receive Pre-Opening Critical Path and POK – Request/receive security, login and password access to HiltonNet/OnQ Insider and digital systems – Receive GM, DOS and RM email addresses – Begin receiving property-specific and brand communications – OnQ Team reviews outline for system hardware Fin ali
Re ce ive

Learning the Language, Navigating the Systems
– Hotel assigned specific code within the Hilton system – Pre-Opening Kit (POK) – sent to the General Manager – Hotel team leads required to complete training on material in POK

Hilton Communications Channels
– – – – Hilton OnQ Insider - GM and other key designees receive login and password @hilton.com email addresses – three free addresses provided to the Hotel HiltonNews email newsletter – important brand communication sent weekly via email Pre-Opening Checklist sent via email

Online Resources
– OnQ Team evaluates the hotel for OnQ system requirements – Hotel Information Technology Systems (HITS) Agreement created, investment costs for most hotels range between $60,000 and $150,000 – 60 days prior to opening - computer-training room to be set up – Team members tested and certified the OnQ system prior to opening

Re ce ive

Rec eiv eP re

ical Path Crit ing n pe -O

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Last 60 Days
– Hilton Hotel Integration Team Follow-Up – Hotel Action Plan Review – Review Timelines

Building Business
– Global Distribution Management (GDM) team will build your database into our system. This complex data will supply and affect your Central Reservations System (CRS), GDS and Hilton.com functions. – There is a minimum of 30 days for data-build to enter all systems.

FIRST 90 DAYS

91 – 120 DAYS

Phase IV
– Design & Construction Project Manager reviews timeline – Review Hotel Action Plan and progress – GM and hotel team are tested and certified on OnQ PMS – Open as a brand new Hilton Hotel! rs o

Phase III

The Pre-Opening Meeting
– – – – – 3-day onsite meeting for GM, DOS, Revenue Manager and department heads Pre-Opening Workbooks #1 and #2 – sent to the Hotel Workbook #1 forms and assessments to be completed prior to the Pre-Opening Meeting 30 days to process forms and “build” the Hotel within all the Hilton systems Workbook #2 - items will be addressed during the Pre-Opening Meeting

Open as a Brand New Hilton Hotel pe n in

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– Product Sales Analyst creates HITS Agreement for purchase and delivery ng of hotel IT system and i ni ra T1 installation in T B eg – Set up computer training room Ap n and receive training modules/ sig De tutorials – begin training team members – Hilton Integration Team sets Pre-Opening Meeting and delivers agenda, workbook materials, forms and assessments for completion by GM and hotel management team – Pre-Opening Meeting (three days) conducted onsite, all forms completed – Hotel information entered into databases for Hilton system build by GDM and OnQ – 30-day lead time required – Implement pre-sell of hotel guest rooms
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*For current fee requirements and structures, please contact your HHC Developer directly.

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The Pre-Opening Action Plans – A Critical Path is provided to team members to follow for all items that are not Sales & Marketing related – A Pre-Opening Marketing & Sales Action Plan provides detailed requirements and recommendations

Ramping Up
– Hotel will receive regular visits, training, materials, evaluation and help from Hilton experts

Hilton Brand Programs
– – – – – – – Continuous Improvement Process (CIP) The Customer Really Matters (CRM) Hilton Serenity Collection™ Hilton Breakfast Hilton Fitness by Precor® Hilton Meetings® HHonors®

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Appendix
Key Department Personnel
Bruce Sneller Director of Brand Performance New Hotels and Transitions Hilton Hotels Corporation 223 E 33rd PL Tulsa, OK 74105 Office: 918.619.6750 Mobile: 918.809.8807 Joanne Alexander Coordinator New Hotels/Transitions Hilton Hotels Corporation Tel: 914.921.5760 Fax: 914.921.5761 joanne_alexander@hilton.com

GDS (Global Distribution Systems) – the entire electronic travel information network that encompasses most of the key players, including travel agent user systems such as Apollo and SABRE, as well as consumer systems. GDS feeds information to most of the internet online services like America Online and Earthlink, as well as online travel sites like Travelocity, Orbitz and Hotels.com.

HSC (Hilton Support Center) – for system concerns (1-800-HelpHelp). HSW (Hilton Sales Worldwide) – solicits potential top accounts and travel managers of volume-producing accounts for the Hilton Family of Hotels. HSW focuses on maximizing revenues and increasing global market share.

Glossary and Definitions
Brand – a trademarked name, like
Hilton®, that is part of the Hilton Family of Hotels (e.g., Conrad, Doubletree, Embassy Suites, etc.).

HHC - Hilton Hotels Corporation. CRS (Central Reservation System) – system used by the hotels and reservations offices to book reservations, which are stored in a mainframe computer housed in Memphis, Tennessee.

DRM (Director of Revenue
Management) – responsible for hotel revenue management, including transient pricing, assistance with group pricing and thresholds, length-of-stay controls, implementation, etc. DRM can oversee an individual hotel or a group of hotels.

HHI (Hilton Hotel Integration) – this department works closely with new hotels coming into the system, providing full integration and transition support.

OnQ CRS (OnQ Central Reservation System) – the integrated suite of hotel technology used by HHC for property management, rate and inventory, sales, reporting, etc. OnQ FM(S) (OnQ Forecast Management System) – a roomsinventory forecasting system that integrates OnQ RM, CRS, OnQ PMS and STAR. For HHC-managed hotels, it also integrates with DMPE and HLBFS. OnQ Insider – web-based proprietary site that provides links to brand information, property reports and data for the Hilton Family of Hotels. It provides links to website support, Quality Assurance (QA), HIDB Web, accounts payable systems, Executive Information System (EIS) and other company data.

Brand Code – one or more letters used to identify the brand. Hilton Hotels can be represented by the letters HH.

HHonors - Hilton HHonors® is our guest loyalty program for our very best guests. It allows them to earn both Points & Miles® for stays at more than 2,800 hotels worldwide and airline miles with over 50 airline partners. No other hotel frequency program offers both points and miles.

CBT (Computer Based Training) – computer program designed to train all hotel team members in a wide range of subjects, including system use, marketing programs and service skills.

CTYHOCN – sometimes called Hotel Code, stands for CTY – airport code, HO – hotel name, CN – chain name/management affiliation (e.g., CTYHOCN : SFOFD). Developer – HHC personnel responsible for identifying prospective franchisees and developing Hilton Properties, either conversion or new build.

FLA (Franchise License Agreement) – legal document outlining the terms of Hilton licensing, franchise fee payments and schedule, default provisions, etc.

CIP (Continuous Improvement Process) – process in which an issue, identified through the priority report as an improvement opportunity, is analyzed regarding the current situation. Goals are set for the future, causes identified and a plan is crafted to affect change.

GDM (Global Distribution
Management) – the HHC team responsible for initializing each hotel’s rates, room types and inventory in the reservation system, along with the Global Database Systems. This team’s work is especially intense during each annual Request for Proposal (RFP) season during the third/fourth quarters. GDM functions include: CRS (Central Reservation System) – 1-800-Hiltons GDS (Global Distribution System) – to service travel agents and consortiums Hilton.com – your own hotel webpage, tools and internet presence

HIDB (Hotel Information Database) – the information input to HIDB is the basis for the hotel’s listing on Hilton.com, GDS, HRCC and OnQ. It is also used to complete RFPs.

Competitive Set – a group of hotels is chosen to serve as a standard set of suitable competitors, against which performance is measured. Competitors are usually chosen based on the location, product similarities and/or price similarities.

DMPE (Delphi Multi-Property Edition) – sales software that allows users to view and sell for multiple properties from any DMPE workstation. For management groups with DMPE, it is the primary source of group booking information. DOSM or DOS (Director of Sales and Marketing) – responsible for Sales and Marketing efforts for the hotel.

HLBFS (Hotel Level Budgeting &
Forecast System) – system used by HHC–managed hotels to create high-level revenue forecasts and annual budgets. For hotels with OnQ FM and exported to HLFBS.

OnQ PMS (OnQ Property Management System) – hotel-based system for managing guest accounts, accounts receivable and history. OnQ RI (OnQ Rate & Inventory) – system used for Special Rate Plan (SRP) creation and management of hotel room inventory.

HRCC (Hilton Reservations & Customer Care) – the Hilton Family of Hotels central reservations. The offices are located in Hemet, CA; Streator, IL; Dallas, TX; Tampa, FL and Hazelton, PA.

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Appendix
Glossary and Definitions (continued)
OnQ RM(S) (OnQ Revenue
Management System) – an OnQ software application that develops projections of business levels and unconstrained transient demand, turning those projections into recommendations for maximizing revenue.

QA (Quality Assurance) – the department that audits hotels to assist the management team at the property level to identify cleanliness, Hilton Brand Standards and condition issues. An auditor from QA will visit each property twice a year.

SALT (Satisfaction and Loyalty
Tracking) – a guest survey tool that is sent randomly to guests after checkout, requesting feedback on their stay. Results are reported and include each response, brand comparisons and rolled–up reports.

OnQ RM - interfaces with a number of different systems. It reports future booking and projections to OnQ FM.

RDBPS (Regional Director of Brand
Performance Support) – each director is assigned a portfolio of hotels and is your one-stop resource for all Hilton programs. The Directors conduct property visits twice a year to help identify potential issues and provide direction and supply overall support for the property.

SRP (Special Rate Plan) – a sub-inventory of rooms and rates offered to a select group or providing extra service to amenities. Also called a Rate Plan (e.g., Hilton BounceBack or Romance Packages).

POK (Pre-Opening Kit) – materials for training hotel HR and GM and management staff on Hilton programs, which includes comprehensive Hilton Brand Standards Manual, training videos, collateral materials, etc. Project Manager – Hilton specialist who works with the onsite teams to ensure compliance with Design & Construction Brand Standards.

RDRM (Regional Director of Revenue
Management) – this individual provides guidance and training regarding selling strategies and the most effective use of the Revenue Management Systems.

UFOC (Uniform Franchise Offering Circular) – provided to all prospective franchisees at least 10 business days prior to payment of monies or signing of agreements.

PSA (Product Sales Analyst) –
IT specialist who will create a Hotel Information Technology Systems Agreement for purchase and delivery of Hilton IT system, pursuant to the OnQ team’s evaluation.

RFP (Request for Proposal) – a formalized process in which companies or consortiums request bids for contracted rates. The companies select which bids they will accept and designates those hotels as “preferred” for their corporate travelers.

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