Chris Nassetta left a comfortable position at Host Hotels & Resorts to take on the challenge of making Hilton Hotels Corp. the recognized global powerhouse it should have been years ago. The company had barely been merged into one cohesive group when it was sold to The Blackstone Group last July. Since Nassetta became president and CEO on December 1, he has been figuring out its strengths and weaknesses, and reorganize its structure. Nassetta also is working seriously to create a lifestyle brand. Here, Nassetta discusses his progress in the first 120 days on the job.

HIO: How are you operating differently at Hilton?

NASSETTA: In the first 120 days, I spent a lot of time getting to know the organization, traveling around the world to get a sense for the people and what they are doing, finding the strengths and weaknesses, and trying to figure out how we should be doing things differently and more effectively and efficiently.

HIO: Reports suggest the past management was slow and bloated. What are your thoughts?

NASSETTA: I am not going to suggest any of those things. There are a lot of things going on within the company that are going extraordinarily well. Like any company, there are ways we can be more effective to accomplish our objectives. The ways we can do that relate to integrating our businesses around the globe in a more comprehensive way. It has been only 18 months since these two companies—Hilton Hotels Corp. and Hilton International—were put back together again. Not too long thereafter, the focus was on the sale to Blackstone. So by no fault of anyone on the prior management team, there wasn't a significant [amount] of time or opportunity to fully integrate that acquisition.

HIO: There has been a shake-up in the organization. Is there more to come?

NASSETTA: I wouldn't describe it as a shake-up. I went out and talked to the top 150 people in the organization over first 60 days and asked what we do well, [what we] don't do well, whether or not we are structured effectively and efficiently, and what they would do differently. The result of all that was a global reorganization plan I rolled out in late March. We took a geographic organizational structure with regional heads, collapsed it and re-cut it to have global functional heads so we can have a laser focus in each function driven by our core four businesses: a global head of operations, a global head of real estate and development, a global head of brands and shared service, and a global head of timeshare.

HIO: Critics say Hilton has been too slow to develop its timeshare and ultra-luxury businesses. How do you respond?

NASSETTA: In timeshare, we have a terrific business and we are having terrific success year over year. Our strategy of being focused on certain core markets (Hawaii, Las Vegas, Orlando, New York City) and having a significant presence and substance in terms of sales and marketing in these clusters is a good strategy, and we don't expect that to change. At high end of the business there is no question we have work to do. We have the beginning of a strategy above the Hilton brand with Conrad and The Waldorf=Astoria Collection. It is in its infancy and we have a significant amount of work to do, but we are far along in defining the brands at the high end in a way that makes sense, where they have their defined swim lanes and end customers and owners understand what they represent and what we are trying to do with those brands.

There are a number of ways to accelerate growth. Most importantly we are going to be converting many LXR assets that Blackstone owns independently into our high-end brands. It is a very unique opportunity to accelerate growth and in reality comes close to nearly doubling our presence in the next 12 months.

HIO: Steve Bollenbach never wanted to get into lifestyle hotels. What is your take?

NASSETTA: A space we are not in that I have personally been spending a lot of time on is the boutique or lifestyle space. We really want to get in and the primary driver is that growth in the segment is three times the average of the business. There is a significant amount of demand from our ownership community who wants to be in that space because they see the same thing we see, which is a dramatically better growth rate in terms of demand. We are hard at work and moving very quickly to develop a powerful concept in the lifestyle space. We should be ready to announce something in the next 90 days.

HIO: Based on current economic conditions, how good is your timing on expansion?

NASSETTA: We are going to face economic headwinds, and it is naïve to think it won't have an impact on our business. But I don't think it is a gale force wind; it is a modest headwind driven by a demand-induced slowdown… It's a big world, right? There are a lot of reasons why in other parts of the world, not withstanding a slowdown in the U.S., you will still have fairly robust growth. So when I think about our business, I think about it in a global context. We have a huge pipeline of hotels today with over 150,000 rooms, and over 50,000 rooms under construction around the world, with the greatest proportion in the U.S. As time goes on that is going to change. If we accomplish our objectives, as every year goes by, a greater proportion will be outside the U.S.

HIO: How is Blackstone doing with placing the debt from its acquisition, and what effect does it have on Hilton?

NASSETTA: From the standpoint of where I sit and Blackstone sits that deal is done and financed. The ultimate placement of that debt does not impact our results. The banks have sold some of it and still hold a lot of it. Based on where the capital markets are today, it makes it difficult for anybody that holds any of the paper to move it in volume. It is going to take some additional stabilization in the credit market for that to occur. Our deal is not dependent on how they place the debt in the market. Having said that, however, when you think about a lot of the deals out there, the banks and ultimate buyers of the debt should feel really good. The company is actually performing extraordinarily well. As far as the underwriting of the deal, we are beating the numbers.