Is Hilton within striking distance of dethroning Marriott as the world’s largest hotel company?

Marriott International, with more than 30 brands under its belt, is the undisputed leader in the world’s hotel orbit.

However, Hilton leaders Wednesday morning outlined a growth strategy signaling why their cross-town rival in the Washington, D.C., metropolitan area shouldn’t get too complacent in its lofty perch.

The hotel giant behind brands like Waldorf Astoria, Conrad and Home2 Suites has an array of new brands and partnerships that should add thousands of new hotels and Hilton Honors loyalty program engagement in the years to come. Hilton’s development pipeline of 472,000 hotel rooms worldwide is still well shy of Marriott’s 573,000-room pipeline reported at the end of last year, but Hilton leaders still have bragging rights.

“Approximately half of our pipeline is under construction, and we continue to have more rooms under construction than any other hotel company, accounting for more than 20% of industry share and nearly four times our share of existing supply,” Hilton CEO Christopher Nassetta said on a company earnings call Wednesday.

Where does Hilton’s growth come from?

In just the last few months, Hilton acquired two brands and formed two new partnerships that provide Hilton Honors members with new ways to earn and redeem points.

Hilton’s acquisition of Graduate Hotels, a brand focused on college and university settings, gives the portfolio a special lifestyle option that Nassetta said on Wednesday could eventually see as many as 500 hotels worldwide. Currently, the brand has a little more than 30.

“Graduate presents a unique opportunity to serve more guests, especially in markets where we’re not present today,” Nassetta said.

The company also acquired a controlling stake in Sydell Group, the parent company of NoMad Hotels, earlier this month to beef up its presence in the luxury lifestyle hotel space — occupied by brands like Marriott’s Edition and Hyatt’s Thompson Hotels — by 100 hotels. The acquisition spree is a departure from Hilton’s “build it, don’t buy it” ethos of launching new brands organically instead of acquiring them.

Both deals are a case of Hilton getting in relatively early before significant global expansion. NoMad only has hotels in London and Las Vegas, but the Sin City property isn’t included in the deal and will eventually change brand affiliation.

“The ethos of what [Sydell Group founder and CEO] Andrew Zobler and his team have created is a sort of bullseye for what we think is modern luxury lifestyle today and going forward in terms of what customers are looking for,” Nassetta said of NoMad. “It hit every button for us in terms of making sense, but yes, it’s very small. The good news is it’s very small, we didn’t pay a whole lot for it, and that means great organic growth going forward.”

It’s not just the luxury segment driving Hilton’s growth. The company’s new premium economy Spark brand is one Nassetta anticipates will eventually be Hilton’s biggest brand in terms of property count. The brand grows from converting existing hotels into Spark branding, and Hilton leaders previously told TPG there are “tens of thousands” of conversion candidates for Spark worldwide.

Hilton accounted for 40% of all conversion deals in the U.S. last year, Nassetta claimed while specifically highlighting Spark, DoubleTree and the Tapestry and Curio collections as driving factors there.

On the new-build front, Hilton’s Home2 Suites has the most projects in various stages of development in the U.S., according to a report last year from Lodging Econometrics. Marriott’s TownePlace Suites comes in second place.

Partnership fuel Hilton Honors engagement

Hilton also pulled a Small Luxury Hotels of the World partnership away from Hyatt earlier this year and announced a partnership with outdoor lodging brand AutoCamp. Both deals provide significant opportunities for Hilton Honors members to explore more bespoke travel opportunities within the Hilton ecosystem. It’s unlikely to stop there.

“What we’re doing with SLH, what we’re doing with Autocamp, you should expect to see more … not Graduate [Hotels]-type things but more partnerships, particularly in the experiential area,” Nassetta said. “Think areas like safaris and riverboat cruise[s] because we know those are adjunct travel experiences that connect to our business, that gives our base of customers incremental things to engage with us and is not in conflict in any way with our business. We think it’s synergistic.”

The percentage share of Hilton Honors members accounting for overall occupancy at Hilton hotels hit a record high of 64% in the first three months of this year, Nassetta said. The plan is to boost that number to 75%.

While he didn’t provide further detail about how the company plans to hit that lofty number, Nassetta hinted at one area of opportunity: providing geographic-specific offerings to account for different travel patterns and behaviors worldwide.

Don’t write off Marriott

Hilton kicked off hotel earnings season with a roar, and there have been swelling industry murmurs that the company is on track to overtake Marriott this year in terms of loyalty membership count. That’s quite possible, but this race is far from over.

Marriott’s new partnership with MGM Resorts fuels a new on-ramp for the Bonvoy loyalty program at some of the most popular Las Vegas casino resorts and other MGM properties across the U.S. Other industry murmurs note that even if Hilton Honors overtakes Marriott Bonvoy in member count, the widely held belief is Bonvoy members spend more at a property.

Does bigger mean better?

We’ll wait to see how the pipeline and loyalty member counts factor in at Hilton’s top competitors over the next few weeks and report back.

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