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You are here: Home  September 2009  Financial News Focused service brands the right fit in this economy

Focused service brands the right fit in this economy

MEMPHIS, TN — “Focused service” is how Hilton categorizes its Homewood, Hampton and Hilton Garden Inn brands. They’re smaller hotels with more limited food and beverage, suitable for guests looking for value. And they’re doing very well in this challenging economy.

Take Homewood Suites, Hilton’s extended stay brand. There are eight open in Canada, with six in the pipeline for next year. Fifty per cent of their business is for six nights or more. They offer a full kitchen, cooktop, microwave, dishwasher and refrigerator, and come in studio, one or two-bedroom units.

They’re good for business people with longer-term assignments, leisure or vacation guests, or for people out of their own homes due to renovations, says Phil Cordelle, global head of focused brands for Hilton Hotels Corporation.

Phil Cordelle, global head of focused service brands, Hilton
“Residents feel it’s almost like a small apartment. We have a free breakfast that’s very robust — a hot breakfast with scrambled eggs. From Monday to Thursday, every evening, there is a manager’s reception offering a snack, meal and beverage. And The Lodge is a gathering spot for socializing or for breakfast.”

The six upcoming Homewoods will be located at Toronto Airport, Calgary Airport, Dartmouth, NS, and Vaughan, Ajax and Barrie, Ontario.

“While Canada’s overall market is depressed, extended stay has been less impacted,” Cordelle adds.

“Extended stay carries over the shoulder nights. Its ADR is holding its own, occupancy is down, but overall RevPAR is down far less than other segments. With backyard sales and local stays, that brand is faring the best within the Hilton family,” he says, adding that there will be 300 open in the U.S. by the end of the year.

The Hampton Inn/Hampton Inn & Suites brand has been around for 25 years. There are more than 1,700 Hamptons open in the U.S., and 150 of them in the pipeline this year.
“They are clearly mid-range hotels without food and beverage that provide free breakfast that is beyond the usual complimentary breakfast, with fruit, yogurt and two hot offerings,” Cordelle says.

There are 27 Hamptons in Canada in locations ranging from Halifax to Vancouver. “When Hampton was first launched, it only worked in secondary and suburban markets. [Lately] we’ve been able to prove that it works well in select urban markets, including Manhattan.” There’s an urban Hampton in downtown Vancouver on Robson Street.

Recent openings have included Winnipeg, Windsor, Vancouver, Toronto, Niagara Falls, Montreal, London, Quebec, Kamloops, Edmonton and Calgary.

Four more will open this year, and Hilton is looking at properties in Hamilton, Brantford, Elliott Lake, South Edmonton, and the Toronto Airport Corporate Centre.

“Once we have more than 30 hotels, we will start to feel comfortable with the level of brand awareness,” Cordelle says.

A year-and-a-half ago, Hilton added “by Hilton” to its brands.

“We found that brand awareness was relatively high, and the addition of “by Hilton” made not only the brand connection, but also the connection with the HHonors [loyalty] program. From a development perspective, awareness adds credibility for financing.

“Across all brands, the demographics of our guests differ greatly,” Cordelle says, adding that it’s easy to switch from one Hilton brand to another. Guests use different members of the Hilton family for different travel occasions. For example, they might use Embassy Suites for a weekend getaway, but switch to Homewood Suites for longer stays when they want to spend less money.

Hilton Garden Inns are a step above Hampton. They’re still relatively small — about 150 rooms — but with a restaurant, bar and the biggest meeting space per number of rooms. At Hilton Garden Inns, guests pay for breakfast, but they have a business centre with high-speed Internet and a printer-secure environment.

“It’s a business-oriented hotel, but it appeals to weekend travellers too. There’s a hospitality centre with a microwave and coffee maker, and a small pavilion pantry with microwavable foods and alcohol.”

Hilton has more than 470 Hilton Garden Inns in the U.S., and 19 in Canada with two recent openings.

Both recently-opened hotels are part of Easton’s Group of Hotels (see story in How’s Business). Both the Hilton Garden Inn Toronto City Centre and the Hilton Garden Inn Toronto Airport Mississauga opened this summer.

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