In the year since the launch of Home2 Suites by Hilton the brand has managed to fuel its expansion with new-builds despite the ongoing troubles some developers have found obtaining finance.
Looking ahead, the midscale, extended stay brand from Hilton Worldwide, McLean, Virginia, is seeking to expand across North America, including Canada and Mexico as well as the U.S. at city center locations in everywhere from major urban areas to suburban and third-tier destinations, all via franchising. To find out more about the brand’s plans, HOTELS Magazine spoke with Bill Duncan, Hilton Worldwide’s global head, brand management at Home2 Suites by Hilton and Homewood Suites by Hilton.
HOTELS Magazine: How many hotels have opened under the Home2 Suites brand since its launch?
Bill Duncan: Right now we have seven open and we’ve got approximately 10 under construction with more coming pretty quickly.
Our properties that are currently open are located in:
- Baltimore
- San Antonio
- North Charleston, South Carolina
- Fayetteville, North Carolina
- Lexington Park, Maryland
- Layton, Utah
- West Valley City, Utah
HOTELS: What is in the brand’s pipeline? Are expansions limited to North America or is the brand going global?
Duncan: We have 70 deals in the pipeline. It is limited to North America We signed our first agreement in Canada in West Edmonton, Alberta. We have our first application for Mexico in-house. We’re really going to focus on North America first before expanding internationally, although we see it as having strong potential internationally.
There is a great flexibility to this brand. We talking deals from downtown Philadelphia to some of the oil towns in South Dakota. This brand can go anywhere and it is designed for that.
HOTELS: Is the pipeline principally conversions or new-build properties?
Duncan: All of the 10 are new-builds. I don’t think we have any more conversions right now.
HOTELS: Are developers able to access financing or are they finding difficulty?
Duncan: Finance is loosening up. We are seeing more happening. With the hotels under construction, financing is out there and available.
Capital groups and banks are liking the product, liking what they see and liking being part of Hilton Worldwide and all the strength that brings.
Obviously we wouldn’t be building new hotels without financing, as this is an all-franchising brand.
HOTELS: How has the Home2 Suites concept been tweaked since its launch?
Duncan: We have done a bit of work on our “working wall” based on input from owners. A little around the “working wall” and breakfast, but that’s been about it, which is good.
HOTELS: Who is the typical customer at Home2 Suites hotels?
Duncan: We designed it to go after Generation X and Generation Y, that was our target. What we have found out that is kind of funny is that it has strong generational appeal. The Boomers like it because they feel very young at heart. It’s been very fun to watch.
HOTELS: How are customers responding to at Home2 Suites hotels?
Duncan: They are responding incredibly well, we have some of the highest customer satisfaction scores in the Hilton family which we are very proud of.
HOTELS: How is the Home2 Suites portfolio performing in terms of RevPAR, ADR and occupancy?
Duncan: Because we’re just having our first hotels hit the one-year mark, we don’t have a lot of information there to share because of privacy, but they’re doing pretty well.
ADR for the portfolio is around US$95, which is great. All of the metrics that we have are showing that it is moving in absolutely the right direction.
Extended stay, which is five or more nights, is very close to that 50% mark of our business, which is very good.
HOTELS: How are you marketing the brand?
Duncan: By going local with our Your2 Hands program, which involves us partnering with a local community partner. In Fayetteville, for example, they are installing beds in a rehabilitation center for injured veterans.
The other thing is emphasizing sustainability. For example, the carpet tiles are made of 65% recycled materials. And if need to replace carpet, you can just replace one tile at a time as needed. There is a great story there that customers appreciate.