Hilton announces new affordable hotel brand, Tru
LOS ANGELES--Hilton Worldwide today announced a new affordable brand targeting younger travelers.
Tru by Hilton will debut at the end of this year. It will be Hilton's 13th brand, and its re-entry into the midscale hotel segment. The company introduced the new brand at the Americas Lodging Investment Summit in Los Angeles.
The company already has 102 hotels signed. Another 30 properties are in various stages of approval in cities such as Atlanta, Houston and Chicago.
"I ultimately think this will be our biggest brand over time," says Hilton CEO Christopher Nassetta.
The move comes as the hotel industry is consolidating, with Marriott International buying Starwood Hotels and Resorts, and AccorHotels acquiring Fairmont, Raffles and Swissotels. Rather than buy an existing brand, Nassetta says the company preferred to start its own.
Nassetta says that 40% of demand for hotel rooms is in the midscale segment, which includes brands such as Comfort Inn by Choice Hotels and Fairfield Inn & Suites by Marriott.
Rates at Tru will vary by location, but will be in the $90 to $100 range.
The brand will target all age groups, but is intended to appeal to a "millennial" mindset, Nassetta says. Millennials, those in their twenties and early thirties, tend to like modern design, public spaces where they can work and socialize, and advanced technology such as mobile check-in.
Because of the price point, it will probably attract younger travelers on the road for business and pleasure, he says.
"We have a very large swath of demand that indexes very young, and we’re not serving it," Nassetta says. "There's an opportunity to build a new brand, if we do it right, that will drive huge demand."
Analysts think the new brand could find a niche. "The Midscale chain scale contains many older line limited service brands that have not seen the innovation that a new brand would coming out of the box today," says Bruce Ford, Senior Vice President at Lodging Econometrics.
Hilton had a midscale brand, Hampton Inn. But that brand has now been elevated into a more upscale product.
Each Tru hotel will be a new build or a repurposing of an existing property. "We won't take another hotel brand and rebrand it as a Tru," says Phil Cordell of Hilton Worldwide.
The hotels will cost on average about $85,000 a room to build. Each will typically have 98 rooms over 1.58 acres. Common areas include a 2,776 square foot space divided into four zones for working, lounging, playing, and eating and drinking.
Guests "are very interested in having a great degree of flexibility," says Alexandra Jaritz, global head of Tru by Hilton. "This idea of having customized experiences is very important to them."
Local snacks and drinks, including single-serving beer and wine, will be available from a grab and go area. A build-your-own breakfast station will be complimentary. Coffee and tea will be free throughout the day.
The play area will have a large TV and activities such as ping pong and foosball tables.
Wi-Fi will be free.
Rooms will come with either a king bed or double queen beds, in sizes of 231 or 275 square feet.
"Smaller rooms are very common in Europe," Cordell says. "There are some people who think customers aren't ready for that in Atlanta or Dallas. We think they are."
The rooms have platform beds and 65-inch TVs and various storage areas such as a luggage bench. Closets will not be enclosed. Instead of a desk there will be a multifunctional chair.
Bathrooms will have extra-long vanities and showers instead of bathtubs.
"We really wanted to make sure the guest experience was simple, intuitive and efficient," Jaritz says.