Embassy Suites’ flexible options

Shawn McAteer

MEMPHIS, TN—The Embassy Suites by Hilton brand is becoming much more flexible.

The brand is still looking at new builds, emphasizing the reduced cost factor of their Design III model, which costs $10,000 to $15,000 less per key than the traditional Embassy Suites design.

“What those costs help us to do is to target developers who are with Hilton Garden Inn, Hampton Inn, Courtyard or Holiday Inn move up into the upper upscale category at a price point that is not typical of the upper upscale segment,” says Shawn McAteer, vice president brand performance and support for Embassy Suites, who was in Vancouver last month for the Hilton Worldwide Development Forum.

“The beauty is that they can still command upper upscale rates.”  That revenue premium (running at 126 per cent vs. its comp set year to date), plus great ADR, and a profit model that is very self-service oriented (read, lower labour costs) are some of the advantages of the brand for Canadian developers.

“The profit margin is much closer to that of a focused service hotel brand than a full service hotel brand,” McAteer says.

Hilton still plans to add 10 to 15 Canadian Embassy Suites hotels in the next five to seven years, with the help of the Hilton Development Team, McAteer says.  “We’ve identified 29 markets where Embassy Suites would go well, including downtown Vancouver, multiple locations in Calgary, a couple in Edmonton, and we’re very interested in Toronto downtown and airport locations.

“Kit of Parts”

Exterior of Embassy Suites Buffalo

What’s changed is that Hilton now views its Design Option III as a “kit of parts,” meaning that while all elements of the Embassy Suites guest experience should be part of a hotel, Hilton doesn’t require them to be in the same place.

In other words, Hilton is now considering adaptive re-use and conversion properties in addition to new builds.

For example, says McAteer, a new build in downtown Vancouver would be a challenge, but there may be an opportunity to convert a hotel or try an adaptive re-use project.

He points to a recently-opened Embassy Suites in St. Louis, MO as an example of the latter.  This building was purpose built as a Dillards department store in 1906.

“It’s now a stunning Embassy Suites hotel, which is also mixed use with residential units on top and the hotel on the bottom.”  One of the outstanding features of the property is the Atrium—a distinctive feature of Embassy Suites hotels. In this case, it is located on the fourth floor with glass panels at the top, creating a large, expansive space.

Similarly, an Embassy Suites in the pipeline to be built in Louisville, KY will adapt an old department store into a mixed-use Embassy Suites development.

“We can also do conversions,” McAteer says.  “No matter what your real estate strategy, Embassy Suites can fit it.”

“All the features guests love in Embassy Suites are still there, but just in a different location.”

The Embassy Suites in Buffalo, NY is another example of a mixed-use development, with the hotel on the bottom and high end residential condos on top.

And one of the two Embassy Suites hotels in Canada, the Montreal location, was purpose built as a condo project. “It’s a strong Embassy Suites in a great location, close to Montreal’s financial district and Old Town Montreal,” says McAteer.

Here’s a piece of interesting Embassy Suites Trivia. The other Canadian Embassy Suites is in Niagara Falls, “and the number one feeder city for both hotels is the Greater Toronto Area,” McAteer notes.