US: Hilton CEO Chris Nassetta revealed that the company is planning to launch a new extended stay brand within the next two months.
During the company’s Q1 earnings call, Nassetta said the brand will sit at the “lower end of midscale,” below Home2 Suites.
He said: “There are so many workforce housing needs that are just unmet with this kind of product, for somebody who needs to be somewhere 30, 60, 90, 120 days. So, you’re talking about an average length of stay of probably 20 to 30 days, versus most of the core extended-stay brands that are like five to 10, maybe.”
Nassetta added that the concept has the potential to scale to “hundreds and hundreds of hotels” over time. He said: “While it will be a newbuild product, it will be a very efficient build cost. The lower-cost-to-build products that are very high margin, they’re the lowest risk and they’re the easiest to finance. We think that is a mega brand opportunity for us, even in an environment that’s been more challenging from a financing point of view.”
For the first quarter, Hilton reported growth in revenue per available room (RevPAR) of 30 per cent on the same quarter last year, to $103.72. First quarter occupancy rose 9.8 per cent, to 67.7 per cent, and average daily rate (ADR) was up 11.2 per cent, to $153.20.
Hilton also recorded a net income of $209 million for Q1, compared with $211 million a year earlier. Revenue increased by 33.2 per cent, almost totalling $2.3 billion.
The extended stay launch follows the recent introduction of Spark by Hilton, the company’s first economy brand.
