Hilton’s full service brands in Canada

Jim Holthouser

MEMPHIS, TN—Jim Holthouser enjoys his new job as global head of Full Service Brands for Hilton Hotels Corporation. “I have the best of all worlds.  I get to keep the Embassy Suites brand I’m just nuts about, and I get to work with two other very cool brands, Doubletree and Hilton.”

CLN spoke to him recently about Hilton’s plans for its full-service brands in Canada.

Embassy Suites. At present, Canada has two Embassy Suites.  The Niagara hotel, which is the largest in the system, has more than 500 suites. That hotel “just cranks it out—it’s an amazing hotel,” says Holthouser.  An addition to the Niagara property is in the works.

The other Embassy Suites is in downtown Montreal, across from the convention centre.
 
And more Embassy Suites hotels are planned for Montreal, Halifax and St. John’s, NL, with discussions underway for a hotel in Calgary.  While Hilton can do conversions to Embassy Suites, they are generally new builds – and thus not as appropriate for this economic climate.

Right now, with the recent prototype, there are 55 Embassy Suites in the global pipeline.

Embassy Suites Hotels' one-room suite

One room suite concept

Embassy Suites has launched the “one-room suite”—an optional product for the brand, since the Embassy concept is already so well established and well-understood by the customer, Holthouser says.

“We wanted to capture more commercial business, although our numbers are reasonably strong during the week,” he says. “We felt we were losing business because business people travelling by themselves felt they didn’t need a full suite.”

The one-room suite is smaller than the usual one-bedroom Embassy suite—370 square feet rather than 462. “But it still has the wet bar, sleeper sofa and residential-sized bathroom of the Embassy suite.  It was designed to capture more commercial traffic, but also to be more attractive and competitive with hotel investors.”

Hilton views hotel developers as customers—and the one-room suite is something they asked for in order to move more Embassy Suites hotels into the market.

The one-room suites are capped at a maximum of 20 per cent of rooms. Even with this percentage of rooms, it lowers the overall square footage per key from 870 to 834 square feet.  Put another way, using the Design Option 3 Prototype with 20 per cent one-room suites, a hotel developer can get 168 rooms for the exact same footprint as 156 of the regular one-bedroom Embassy suites.  “Take the 12 extra rooms, at the average daily rate, times 22 years and that can very positively impact ROI.”  (Hilton franchise agreements typically run for 22 years.)

Holthouser stresses that this decision was not taken lightly.  “We are very careful branders,” he says, adding the decision was a result of three years and half a million dollars in research.

The company built a one-room suite in Memphis for consumer testing. The main comment was that it looks bigger than the two-room suites, because you are not carving the room up with an additional wall.  And as a brander, Embassy is known to its customers for space and great value, Holthouser says.

“The trick for me was how to take 370 square feet and make it feel very spacious.  We have lighter colour walls, and a sliding washroom door—all design tricks to make this room seem very large—I think we’ve nailed it!” he adds.

“For the business traveller it’s just perfect, but for families it’s ‘not why I stay with you’.  If I were building at Toronto Airport, I would built the 20 per cent of one-room sites, but if I was outside the gates at Disney, I wouldn’t,” says Holthouser.

The first property that includes the one-room suite is located in Buffalo, NY in an old federal government building that has been converted into an Embassy Suites.

“Doubletree is on a fantastic journey,” Holthouser says, of the second brand his full service portfolio. “It was a hodge-podge 10 years ago, but Dave Horton, who has now moved to the Hilton brand, gave it definition, values and consistency. Now it is a nice, boutique brand.  It’s a big conversion candidate and this market shows Doubletree at its finest.”

Hilton has two Doubletrees open in Canada – one near Toronto airport and one across from the Embassy Suites in Niagara Falls.  There will be another Doubletree conversion in Canmore,  AB with work starting on the former 159-room Four Points by Sheraton this month.

Hilton brand. There are 14 Canadian Hiltons, with two more in the design stage. In Vancouver, conversion of a 102-suite Hilton Suites will be completed in 2011, while the 252-suite Hilton Suites Calgary Airport will open in August 2010.

“That’s the beauty of having a slate of brands. Not only are they all positioned for different customers and different travel occasions,” but they are also positioned for different parts of the economic cycle,” says Holthouser.  “This part of the economic cycle works well for conversions, while the other part works for new builds.”

“We’re very excited about building our brands in Canada – it’s a terrific market, a very affluent market.  We are doing everything we can to develop smart and cultivate great relationships with franchisees across the country.”