The recurring dream I have came from left field two years ago. But in light of last week’s speculation that real-estate giant The Blackstone Group was contemplating breaking up Hilton Hotels Corporation, it’s not that far-fetched. Even though Blackstone and Hilton vehemently denied such a scenario was being considered, the thought of such a deed overcame my usual visions of Cleveland Browns Super Bowl titles that have haunted me for the better part of 40 years.

My dream is dominated by a major full-service international hotel chain based in a major metropolitan area and a Memphis, Tennessee-based company that specializes in limited-service hotels. There are a couple of peripheral players as well: a Dallas, Texas-based limited-service chain and a small full-service hotel brand based in the southwestern United States.

In the dream, I am juggling press releases from all of these companies. I comment to an unseen co-worker that it’s good to see the Hilton, Hampton, La Quinta and Doubletree brands having such successful years. Then I wake up in a sweat. Is it going to be déjà vu all over again? It’s sometimes funny how the future can mimic the past.

Think back 10 years. At the time it was billed as a “merger of equals” when Doubletree and Promus Hotels Corporation became one company in December 1997, and the company was dominated by the Hampton Inn and Doubletree brands. It turned out to be, from just about every account, a marriage made in hell. Clashing corporate cultures and a management team that couldn’t agree on anything was leading Promus down a path to nowhere. It’s no wonder that in late 1999, little old Hilton Hotels Corporation, a Beverly Hills, California-based company with a few hundred hotels in its portfolio, gobbled up Promus for US$4 billion. In November 2007, Blackstone acquired Hilton for the audacious cost of US$26 billion. Before that, Blackstone had acquired La Quinta Inns in 2005 for US$3.4 billion, and while La Quinta never became part of the Hilton family of brands, it can be considered its cousin.

So, will Blackstone tear down the Hilton empire it took so little time to build? Don’t look now, but it already started the demolition. Remember that Blackstone sold Extended Stay America in April 2007 for US$8 billion—a mere three years after acquiring it. It also disposed of the Baymont Inn & Suites brand, which was part of the La Quinta portfolio, in 2006 to Wyndham Worldwide. 

Blackstone historically has been attracted to high-end, full-service hotels. It would be no surprise if it ended up going back to that approach. Breaking up the Hilton company and selling it in smaller pieces would fetch more on the open market than if it tried to sell it as a whole. Even more appealing to the company would be to break it up and take some of the pieces public.

Imagine the money it would raise if it offered a company that consists of the 1,700-hotel Hampton Inn brand, the Hilton Garden Inn brand and the Homewood Suites brand—all of which now conveniently are located in Memphis. It also could secure an initial public offering for La Quinta—with Hyatt’s planned IPO and Starwood Capital Group’s highly successful offering last week it’s clear that this again is a viable vehicle for hotel companies—and roll that company off into a separate entity like it was when it was the primary piece of a real-estate investment trust called Meditrust.

The whole scenario isn’t far-fetched. Blackstone is a company known for its fastidious planning. It probably had an exit strategy in place for the Hilton portfolio before the acquisition was completed. Twenty-six billion bucks is a lot of money to get to break even on a deal that went down during the heydays of this decade. About the only way to do it would be to break up its portfolio.

Of course, Blackstone would keep "plum" assets like the Waldorf-Astoria in New York. If nothing else, the piece of land between Lexington and Park avenues is worth its weight in gold.

All of this is speculation, however. It might be a dream. But then again, it might be 1995 all over again.