Hilton targets the middle

30 Jul 2015

Hilton's Chief Executive Chris Nassetta has revealed more details about the company's new midscale hotel brand which will launch in the next 12 months.

The expansion plans were discussed in a conference call with analysts regarding the company's second quarter earnings on Wednesday.

The launch will give business travellers and Hilton HHonors members a more affordable accommodation option by mid 2016. 

Mr Nassetta noted there was currently a shortage of premium midscale product in the market and the company's former offering, Hampton Inn, had evolved into a more expensive option.

The average nightly rate at Hampton Inn properties had increased to approximately US$115 per night which cut a large percentage of Hilton's demand base out of its midscale range.

The new midscale brand will be designed to fill the gap left by Hampton Inn and would be a powerful driver for bringing in new customers and building loyalty earlier in the guest lifecycle.

Mr Nassetta said the consumer demand for a midscale option was genuine but the market was lacking products in that range that resonated with the customer. 

Hilton's management is anticipating an initial launch of the new brand in the USA with the potential for a global rollout that could make it one of Hilton's largest brands by hotel count.

The new brand will be made up of a majority of new build projects and will be designed to recreate the midscale segment rather than being a palette swap of the Hampton Inn brand.  

The forthcoming launch follows Hilton's recent successful venture into the upscale hotel range with its Curio Collection and Canopy by Hilton brand.

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