Hilton is calling it splits after 80 years. After buying its first hotel in 1919 and then buying the landmark Waldorf Astoria 30 years later, Hilton is dividing its massive hospitality empire into two separate companies: one to run its hotels and another to manage its casinos. The casino division, called Park Place Entertainment, absorbs the assets of Grand Casinos, the largest operator of casinos in Mississippi. Company officials say the split, finalized in December 1998, protects the hotel industry from a hotel glut in Las Vegas (industry consoliation is expected to lead to 20,000 new rooms in two years) and from the constant government regulation endemic to the casino industry. Hilton is already tasting the wrath of a government agency scorned. In August 1998, the company paid a $655,000 settlement so that the federal government would not prosecute it for an alleged bribe former employees supposedly made to Kansas City gambling officials.

Waiting on Garden Inn

Hilton currently owns, manages, or franchises more than 250 hotels across the world. In addition, it claims 180 franchised hotels. Hilton is developing a new budget chain called Hilton Garden Inns aimed at business travelers. In another strategic move, the company has agreed to work with the Ladbroke Group, the owner of Hilton International Hotel, to place the Hilton name on all its jointly-owned hotels. The venture means that the big H is now found on 400 hotels in 18 countries. Hilton's subsidiary, Hilton Equipment, designs hotels and distributes furniture. Hilton also has several joint ventures in travel-related industries.

Cisco's nice, but...

Conrad Hilton bought his first hotel in Cisco, Texas in 1919. In 1965, the company realized that it could capitalize on the prestigious Hilton name. Soonafter, it started offering franchises. Hilton then entered the gaming business, with the purchase of two Las Vegas hotels. By the early 1980s, the company had rapidly expanded its gambling stakes. In 1994, Hilton launched its first Mississippi riverboat gambling hall in New Orleans; it purchased Bally Entertainment for $88 million two years later.

Third time's a charm

In 1996, Hilton tapped Stephen Bollenbach to head the company, the first non-family member to do so. Bollenbach, who had successfully split Marriott in two, began looking for a way to split Hilton. Bollenbach first tried purchasing ITT, the owner of the Sheraton chain, but was very publically rebuffed in 1997. Hilton then unsuccessfully tried to purchase Circus Circus Enterprises.

If at first...

After the unsuccessful purchase attempts Hilton was able to acquire Promus Hotel Corporation for $3.1 billion in September of 1999. Promus brought Hilton 1,302 hotels under the recognizable names of Doubletree Hotels, Embassy Suites and Hampton Inns.

Recognizing Russia

Hilton is trying again to get its name up in Moscow lights, the company's fourth attempt to open a hotel in Russia since 1970. Hilton actually was the first in its class to attempt a location in Russia, but was haplessly struck down each time due to disagreements with Soviet authorities. Things look good for its most recent Moscow trial, begun in February 2000, for several floors are already constructed, and a potential investor found. The hotel will have 218 rooms, two restaurants, a bar, three business floors, and a ballroom. Its been named the Hilton Bolshoi Moscow Hotel, and is planned to open its five-star doors in spring 2001.

Diversity counts