Hilton also isn't entirely insulated from deteriorating economic fundamentals such as a fall in real estate prices, a slowdown in credit or a rise in mortgage defaults. If Hilton's franchises in the U.S. or international markets like China are unable to cover the financial burdens of owning and maintaining real estate, they could be forced to terminate management or franchise relationships.
Still, Hilton's financial exposure is relatively minimal compared with a business model that invests and owns hotels directly. For those looking for a way to invest in China's growth without taking all of the risks associated with the country, Hilton could be a compelling IPO.
The company plans to use IPO proceeds to pay down some of its $7.5 billion in outstanding term loan borrowings, the leftover debt from Blackstone's 2007 leveraged buyout.
--Written by Antoine Gara in New York