Hilton, which three years ago implemented an electronic procurement system, currently buys in excess of approximately $1.5 billion per year in goods and services through thousands of suppliers. These transactions will migrate to an online web-based system powered by PurchasePro.com's e-commerce engine. Hilton anticipates that significant purchasing and operational benefits will be realized through this agreement, representing another step in the successful achievement of synergies related to Hilton's acquisition of Promus Hotel Corporation. PurchasePro.com currently processes millions of dollars in bid and purchase transactions from the hospitality industry over its network every month.
In addition, Hilton and PurchasePro.com announced the creation of a hospitality exchange that will combine the purchasing power of Hilton's hotels with that of other hospitality companies that will have the opportunity to participate. With Hilton as the "anchor tenant," the exchange will leverage relationships with the thousands of existing hotels having access to the PurchasePro.com network, making this the largest exchange in the industry.
The hospitality exchange will link thousands of member buyers and suppliers in the very fragmented hospitality industry to create significant procurement and sales cost savings, as well as generate new sales opportunities for suppliers. Members will enjoy preferred pricing through the bulk purchasing power of the exchange and also will have the ability to create a customized experience for users featuring their own branded look and feel. Other advantages to the hospitality exchange created by Hilton and PurchasePro.com include:
PurchasePro.com's proven online browser-based, e-commerce solution has been in use for more than three years at major hotel chains nationwide, including such industry leaders as Best Western, Meristar Hotels, Sunstone Hotels, Richfield Hospitality, Mirage Resorts, Mandalay Resort Group and one of the largest hotels in the world - the MGM Grand Hotel in Las Vegas.
State-of-the-art functionality including fully automated sourcing tools for identifying new suppliers, including minority and women-owned businesses.
Access to more than 21,000 businesses offering the lowest possible pricing from suppliers.
Time-to-market advantage enabling member hospitality companies to get up and running in days, instead of months.
Patented bidding technology allowing one-to-many and many-to-one bidding, creating increased corporate efficiencies.
Web-based solution with XML support allowing connectivity to any and all enterprise resource planning (ERP) and other existing IT systems.
"Having utilized a web-enabled system for years, Hilton has long appreciated and acted upon the benefits of using technology to achieve purchasing efficiencies. This project represents the next logical step in our evolution, and is consistent with our intent to continue as the industry leader in e-commerce," said Dieter Huckestein, president - hotel division of Hilton Hotels Corporation. "Our initiative with PurchasePro.com is designed to further improve our company's efficiencies and profitability, which translates into value for our shareholders, franchisees and owners, and will bring us an even greater competitive advantage."
"While newcomers are simply planning a marketplace solution for the hospitality industry, PurchasePro.com has been providing a robust and usable bid and purchase network since its inception more than three years ago," said Christopher Carton, president and chief operating officer of PurchasePro.com, Inc. "With thousands of hotels on our network, we have set the industry standard for hospitality procurement. Creating the hospitality exchange with an industry leader like Hilton is a natural evolution for PurchasePro, bringing our vertical expertise to bear in making e-procurement even more streamlined for hospitality businesses."
Gartner Group, a leading Internet research firm, has projected that the number of private e-marketplaces could soon number more than 7,500. PurchasePro.com is quickly aligning itself to meet this private marketplace demand with a complete suite of products that are rapidly deployed and highly scalable, meeting the procurement needs of many types of businesses and industries.
About PurchasePro.com, Inc.
PurchasePro.com, Inc. PPRO, a leader in Internet business-to-business e-commerce, operates the PurchasePro.com exchange encompassing approximately 21,000 businesses and powers 155 private marketplaces with its highly scalable, browser-based e-commerce engine. The PurchasePro.com exchange and the private marketplaces employing its technology make it easy for businesses of all sizes to buy and sell a wide range of products and services. PurchasePro.com enables businesses to compete more efficiently by meaningfully reducing procurement costs and greatly increasing employee productivity. A key element of PurchasePro.com's strategy is to develop sales and marketing relationships with industry leaders including AOL, IBM, Sprint Corp., and Office Depot, Inc. The company provides extensive support and training programs. For information call toll free at 1-888-830-4600 or visit www.purchasepro.com.
About Hilton Hotels Corporation
Hilton Hotels Corporation is recognized internationally as a preeminent hospitality company. The company develops, owns, manages or franchises more than 1,800 hotels, resorts and vacation ownership properties. Its portfolio includes many of the world's best known and most highly regarded hotel brands, including Hilton, Doubletree, Embassy Suites, Hampton Inn, Hampton Inn & Suites, Harrison Conference Centers, Hilton Garden Inn, Homewood Suites by Hilton, Red Lion Hotels & Inns and Conrad International. For more information on our family of brands, please visit www.hilton.com.
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NOTE TO EDITORS: PurchasePro.com is a trademark of PurchasePro.com, Inc. All other trademarks or registered trademarks are the property of their respective owners.
This press release includes forward-looking statements which are subject to a number of risks and uncertainties, including the risks and uncertainties associated with rapidly changing technologies such as the Internet, the risks of technology development and the risks of competition. Actual results could differ materially. For more information about these risks and uncertainties, see the SEC filings of PurchasePro.com, Inc., including the section entitled "Factors That May Affect Results" in its 10-K filing for the period ended December 31, 1999 and its 10-Q filing for the period ended March 31, 2000, which is available from the company on request and on the Internet at the SEC's website, www.sec.gov.