New-build Hilton brand finds new opportunities for growth

Since its launch in 2016, the midscale Tru by Hilton brand has eclipsed 200 hotels open and today has a pipeline of approximately 250 more hotels with about one in three properties being developed by new-to-Hilton owners. Even during the pandemic and since the beginning of 2020, the brand added nearly 100 hotels to its global portfolio.

More recently, the brand has seen extensive growth in the Caribbean and Latin America with the opening of Tru by Hilton Monterrey Fundidora in Mexico coming in late 2022. Also in the pipeline: Tru by Hilton Chapeco in Brazil in 2023; Tru by Hilton Punta Cana in the Dominican Republic and Tru by Hilton San Jose Airport, Costa Rica in 2024; and Tru by Hilton San Juan Condado in Puerto Rico in 2025.

Tru by Hilton Criciúma in Brazil opened in 2021

HOTELS recently spoke to Talene Staab, global head, Tru by Hilton, for a further update on brand activity.

HOTELS: How has the brand performed through Q1 – rate and RevPAR growth?

Talene Staab: In Hilton’s Q1 2022 earnings release, Tru by Hilton reported an occupancy rate of 63.1%, an ADR of $112.29 and a RevPAR of US$70.86.

H: What has been among the biggest evolutions/changes to the brand during the first five years of development?

TS: The brand was built on owner feedback and since our launch we continue to use our learnings to evolve in real-time. While the pandemic was a challenging time for the industry, it actually served as a great proving ground for Tru. We saw how a streamlined design, lack of carpeting in guest rooms and all new construction properties really resonated with our guests. Tru doubled in size over the last two years and our unique brand attributes helped attract many new and loyal guests to our hotels.

“Tru is in now in the part of the growth cycle where hotels are beginning to trade. In 2021 the brand had eight hotels trade – the most in a single year for the brand since inception. The brand is also seeing more interest from investors about the brand’s performance and acquisition opportunities.” – Talene Staab

H: How is the amenities lineup evolving?

TS: We recently streamlined our complimentary hot breakfast by reducing or removing high-waste items, while keeping fan-favorite items on the menu. Guests will also find a new signature brand offering at all hotels – an automatic, hands-free pancake maker that magically turns batter into a delicious golden-brown pancake with the wave of a hand.

H: How is the prototype evolving?

TS: The brand recently expanded into South America and we announced our new Caribbean and Latin America (CALA) prototype. The product is a “kit of parts” approach that provides owners with specifications and packages to allow for prototypical deployment of new properties. Inspired by the region, the CALA prototype includes subtle refinements such as room size with queen or two double bed layouts and large windows that invite natural light; updated exterior façade and a softened color palette; and a complimentary build-your-own “Top It” breakfast bar that features regional food items with local gourmet snacks and drinks in the 24/7 market.

The prototype also offers signature elements that guests know and love, including enlarged lobbies with areas to work, play games, eat or lounge; custom murals inspired by each property’s local attractions; and modern fitness centers featuring popular fitness equipment such as barre, resistance bands, free weights, cardio and flexibility gear and fitness center tablets.

H: How are you managing development costs as supply chain issues persist, inflation arrives, interest rates jump?

TS: Across Hilton, our procurement experts are working to leverage the scale, scope, reach and expertise of Hilton Supply Management to ensure their clients have the flexibility, access, information and solutions they need to operate and grow their business. While purchasing decisions are made hotel to hotel, we will continue to work with our properties and partners to address the challenges of the current operating environment.

H: What are owners most attracted to about the opportunity?

TS: Opening a Tru is like getting a new phone. You take it out of the box, plug it in and everything just works. Our hotels have a very efficient turnkey prototype, a lean staffing model and unique commercial model making it the ideal brand for first time hotel owners. They also benefit from the power and scale of Hilton’s high-performing commercial engines and loyalty of 133 million Hilton Honors members.

The brand continuously appeals to a new-to-Hilton partner audience and since the brand’s inception, nearly one of every four Tru hotels was developed by an owner new to Hilton. From the beginning of 2020 that number has grown to about one in three new to Hilton owners.

Additionally, Tru is in now in the part of the growth cycle where hotels are beginning to trade. In 2021 the brand had eight hotels trade – the most in a single year for the brand since inception. The brand is also seeing more interest from investors about the brand’s performance and acquisition opportunities.

New at breakfast – an automatic, hands-free pancake maker

H: What is the best way Tru positions itself against competition?

TS: Tru delivers great customer service, which then creates loyalty, and ROI. Besides having one of the most unique products in the industry, Tru has an incredible service culture. We call it “Tru Spirit” and it revolves around the idea that we are friends caring for friends. Our lobby layout and even the t-shirt and jeans uniforms give off a friendly, approachable vibe. Tru guests appreciate this and so do our team members, which is even better given the current business climate.

Tru by Hilton is also positioned favorably among its competitors when it comes to franchise attractiveness. Tru ranked in the top 100 of all franchises in Entrepreneur’s annual Franchise 500 rankings this year. Entrepreneur also ranks Tru among the top 40 fastest-growing franchise brands in the U.S. and Canada.

H: Where, what types of markets are you having the most pipeline success?

TS: The majority of Tru by Hilton properties are in secondary and tertiary markets, though the brand has also found success with its city center and primary market locations along with strong growth near airports and college towns.

H: What is the mix of conversions versus new builds?

TS: Tru by Hilton is unique in the midscale space as we’re almost entirely new builds which helps drive the consistency of experience for guests.

H: What are the biggest obstacles to greater growth?

TS: Early on the structure and rigidity of Tru was a challenge for owners but being prescriptive is a good thing because it has strengthened both the brand’s positioning and consistency. The brand is here to listen and learn and we’ve certainly made adjustments along the way based on guest and owner feedback.