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Hilton CEO Chris Nassetta teased during this week’s Q1 earnings call that they would soon be launching a 20th brand. The new budget, apartment/extended stay brand would within the next few months. This new brand will fall on “the lower end of midscale.”
This new brand aligns with Hilton’s recent focus on lower-end brands that are high margin. The goal here is to attract travelers looking for stays that average 20-30 nights on average. Hilton’s recent addition, Home2Suites, has been very profitable and hotel operators love it both based on margins and that they need to provide minimal Hilton Honors benefits at lower-end hotels.
This is similar to what you’d receive at a Hyatt Place, Hyatt House, Element, Residence Inn by Marriott, etc. For Hilton, lower-end properties make up a huge percentage of its portfolio and as long as they stay profitable, this focus will likely stick around (Hilton has 2,863 Hampton Inns versus 45 Conrads, for example). Hilton is not alone in this strategy as Hyatt and Marriott are also expanding these segments. Hyatt recently announced its new Hyatt Studios extended-stay brand (read more here).
Anthony’s Take: Hilton plans to add hundreds of these lower-end hotels within the next few years. I rarely stay at extended-stay, lower-end properties, but am always glad to have additional options especially in smaller markets, where there might not be higher-end options.
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