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You are here: Home  November 2010  Openings, Sales & Renos Hilton seeks to grow key brands

Hilton seeks to grow key brands

Shawn McAteer
TORONTO—Hilton Hotels & Resorts has “a strong desire to grow the Embassy Suites brand here” and would like to open or construct 10 to 12 hotels in the next five to seven years, addition to the two it has already in Canada.

Embassy Suites has only two properties in Canada so far, but they are both extraordinary properties.  The Niagara Falls Embassy Suites, at 512 keys, is the largest Embassy Suites in the world.  The Montreal Embassy Suites is an adaptive reuse hotel in a corner of Old Montreal that encompasses buildings from three centuries.

“Customers here in Canada value the hotel’s space and value proposition,” Shawn McAteer, vice president brand performance and support for Embassy Suites, told CLN when he was in Toronto last month for Hilton’s latest Developers Forum.

McAteer calls Embassy Suites “upper upscale, the most highly differentiated of all Hilton’s brands.” Features include true two-room suites with a separate bedrooms, complimentary cooked-to-order breakfast, free alcohol at the manager’s reception, open air atria, and complimentary business centres.

“We define and own the [upscale all-suite] category,” McAteer says, adding that with its 207 hotels, Embassy Suites has 70 per cent of the market in a playing field that also includes Marriott Suites, Sheraton Suites, Hilton Suites and Doubletree Suites.

“Guests love the concept,” he adds, stating that since the brand was born in 1986, it has had the highest loyalty figures in the category, winning JD Powers honours in eight of 11 years, and coming in second the other years.

It has a broad appeal to many segments, and is busy throughout the week.  During the week, 25 per cent is group business, while on weekends families take advantage of the suites. “We have a 35 per cent RevPAR premium on weekends,” says McAteer.

One of the barriers to entry in Canada is the cost of construction, McAteer notes.

Embassy Suites launched a new design option in late 2006.  The original design has an atrium that is the entire height of the building.  Design Option 3 has the atrium in the front, and a room tower behind with double-loaded corridors.  The design is much more cost efficient, reducing the cost per key by $10,000 to $15,000, and the land requirements by 25 per cent from four acres to three.  And it’s completely scaleable, suitable for 150 to 300 keys.

Five Homewood Suites in the pipeline

Dawn Koenig
Also on hand at the Developers’ Forum, was Dawn Koenig, vice president hotel performance support for Homewood Suites and Home2 Suites.

She said that Homewood Suites recently opened its 300th hotel in Austin, Texas, and the upscale extended stay brand is celebrating its 20th birthday this year.

Keeping in mind that last year wasn’t far from ordinary, Canada’s nine Homewood Suites are having a stellar year, with occupancy up 9.2 per cent, ADR up by 9.6 per cent, and a RevPAR increase of 19.6 per cent.

Given this success, Hilton is eager to grow the brand, with five hotels in the pipeline in Vaughan, ON, Calgary Airport, Ajax and Barrie, ON and Dartmouth, NS.

“It’s a great value proposition for food and beverage, with a daily hot breakfast, and dinner on Monday to Thursday evenings,” Koenig says. “We’re focused on making sure we offer all the comforts of home.”

Like Embassy Suites, Homewood Suites performs well in JD Power surveys, leading its category for the last 7 years.

Seeking Home2 Suites developers

Home2 Suites is the baby of the Hilton hotel family, founded in 2009, with the first slated to open in Fayetteville, NC in January 2011.  The pipeline is 75 hotels strong, but as yet there are no Canadian Home2 Suites on the books.

“There’s a significant difference in type of business,” says Koenig, comparing Homewood Suites and Home2 Suites.  For one thing, Home2 Suites is a mid-tier brand, with a sixty per cent extended stay occupancy base, with guests staying 10-plus nights.  There’s a high focus on public spaces, and brand offers the Inspired Table with cereals, different breads and a signature hot sandwich from 6-9 a.m.

“The prototype is 108 keys with a price point of $75,000 per key.  Ninety per cent of the inventory is Queen Studio suites, with the remaining 10 per cent one bedrooms," Koenig adds.

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