• With an eye toward ensuring that its customers have confidence in its pricing, a new set of brand standards are being developed for all hotel properties owned, managed or franchised by Hilton Hotels Corporation. While each hotel will establish its own rates, the standards will require each hotel to offer such rates consistently across all designated distribution channels, including Hilton Family proprietary websites, Hilton Reservations Worldwide call centers, Global Distribution Systems/travel agents and through hotels directly. This will ensure that customers receive the best pricing and value no matter which of these channels they use to make their reservations.

• While a hotel's most favorable rates also may be available through other channels, including third-party online channels, customers always will know they cannot find better rates than what they get through Hilton's designated distribution channels. The program underscores the company's belief that providing this consistency is a "cornerstone of brand integrity" and ensures that the company's most loyal customers always have access to the best values without having to go anyplace else.

• Hilton noted that this program is not designed to take away a hotel's need and right to price its product based on its own assessment of market conditions. However, the standards will ensure that the hotels establish their rates consistently and competitively across all the designated channels.

By the end of April 2003, the company expects to complete several new upgrades and benefits for online consumers visiting any of the six major websites for the Hilton Family of Hotels. These are: Hilton(R) (www.hilton.com), Doubletree(R) (www.doubletree.com), Embassy Suites Hotels(R) (www.embassysuites.com), Hampton Inn(R) (www.hamptoninn.com), Hilton Garden Inn(R) (www.hiltongardeninn.com) and Homewood Suites by Hilton(R) (www.homewoodsuites.com). These upgrades are designed to simplify the online reservation process, allowing customers to easily match the right Hilton Family hotel with their personal needs. Major features include:

• Advanced hotel searches by city, address, airport or attraction from a single webpage. Customers will be able to conduct detailed searches based on a user-defined geographic radius and up-to-date room availability. As a result, customers will have more control in choosing the Hilton Family hotel best suited to their individual needs, across all Hilton Family brands.

• Streamlined design features and improved content. Icons directing customers to a well-designed layout combination of photos, brand identifiers and hotel amenities will facilitate the ability of users to perform hotel comparisons across all Hilton Family brands.

• Hilton HHonors(R) profile and account access. Hilton HHonors members will be able to sign into their profile or account at any time during their website visit. This gives HHonors customers expedited reservations, and greater assurance that their particular needs are communicated to the hotel. In addition, they can view and re-book past reservations and modify future reservations.

• Hilton Hotels Corporation has recently entered into preferred hotel agreements with Expedia Inc. As a result, Hilton will become one of the first hotel companies to implement a direct connection between a major hotel company's central reservation system and Expedia(R)'s database, thereby empowering participating hotels to manage price and availability of rooms available on Expedia.com(R)'s website in a dynamic fashion.

• Under the terms of the agreements, which may continue through 2005, participating hotels are not required to commit to Expedia a specific amount of room inventory. Hilton said that, to the extent the company's owned hotels utilize third-party online channels for merchant model reservations, they will currently utilize Expedia and/or Travelweb. Hilton is strongly encouraging the owners of its managed and franchised hotels to do the same (to the extent that they require third-party merchant business), based on having secured from Expedia the most favorable merchant model terms in the hotel industry.

• Members of Hilton HHonors, one of the industry's leading guest loyalty programs, will receive Points & Miles(R) only when booking through designated distribution channels, which include Hilton Family proprietary websites, Hilton Reservations Worldwide call centers, Global Distribution Systems/travel agents, corporate travel planners and through hotels directly. The company noted that when combined with the pricing integrity standard, this will help ensure that the Hilton Family's most loyal customers will continue to favor the designated distribution channels. The company will be communicating to HHonors members the benefits of continuing to book through the company's designated distribution channels.

• The introduction of this strategy addresses the continuing impact of the Internet as a growing distribution channel. In 2002, Hilton reported a more than 95 percent increase in total net and gross reservations on its proprietary brand websites over the previous year. Online channels currently account for approximately 10 percent of the company's total bookings, with more than 75 percent of that total coming from the company's brand websites. Approximately 18 percent of all Hilton HHonors stays are presently booked through the company's brand websites. In mid-January, Hilton set a single-day record of approximately $4.6 million of gross sales revenue from its brand sites.