Hilton Worldwide has launched Motto by Hilton, which it described as an affordable lifestyle brand, with flexible rooms.
The group has six deals signed so far, with CEO & president Chris Nassetta forecasting that the brand would reach “hundreds of hotels”.
Tripp McLaughlin, global head, Motto by Hilton, told Hotel Analyst that the brand would operate under both the franchise and managed model, in line with Hilton’s asset light growth strategy. He said: “Motto by Hilton is focused on delivering a more affordable cost-to-build and efficient staffing model for owners. We used a “kit of parts” approach to design the brand – which means each owner will have the flexibility to develop and operate his/her Motto by Hilton in the way that makes most sense for the specific site and market.
“We are working very closely with prospective owners to identify the best destinations and locations. All of our location decisions will center around offering locals and guests an authentic, yet unique, experience. We expect Motto by Hilton properties to be predominantly new build or adaptive reuse projects. We will look at selected conversions, though expect these to be few and far between given the need for the micro-sized rooms.
The brand is due to break ground shortly in Marylebone for a late 2019/early 2020 projected opening.
McLaughlin said: “London was a natural choice for one of our first Motto by Hilton hotels – it has enduring appeal as an international travel destination, and Marylebone is a neighbourhood where our target guests want to be. In prime central London space is at a premium, and Motto’s competitive advantage includes efficient build costs, highly engineered, flexible guest rooms, and multiple revenue opportunities in the public spaces – making it a compelling brand for owners seeking premium returns.
“The development of chain connecting rooms and ability to confirm interconnecting rooms at time of booking is an industry first – and a key feature of Motto. As with all of Hilton’s industry-leading developments, we will share best practices and learnings from the connecting rooms with the broader Hilton enterprise so other brands can explore and evaluate the feature.
Hilton said that it had evaluated the emerging lifestyle hostel model and found that travellers who stayed in hostels did not like rooming with strangers and often book just with their friends or family. They wanted more from their hostel experience but were limited by current options in the market.
The rooms will have an average footprint of 163 square feet, with features such as wall-beds, lofted beds, segmented shower and toilet stalls, and multi-functional furniture that can be stowed when not in use. Hotels will also have the option for guests to book multiple connecting rooms in advance.
The hotels will also allow guests to split payments between more than one person at the time of booking.
The company has approached existing owners first, with a focus on those with the Hampton brand. Chris Nassetta, president & CEO, Hilton Worldwide, told analysts on the group’s third-quarter earnings call: “We’re very excited about Motto by Hilton. Our existing owner base has been very loyal to us and we want to be loyal to them.
“Not only are we going to them as the first shot out of the blocks, but there has been a cadre of them that have been very involved in the development of the brand. We’re always talking to customers and doing focus groups as we design these brands and figure out how to make them tick the right way, so that they’ll appeal to customers but we are also working very closely with owners to make sure that we’re engineering the cost to build and the cost to operate in a way that they’ll deliver returns that work for owners. Otherwise, we’ll have a great thing for a customer, but we will have no hotels for the customer to stay in.”
Nassetta said that “not all but many” of the first deals were being done with existing owners. The CEO said they were “more complicated than Tru’s given that they are urban, it’s a little bit longer gestation period and higher degree of complexity.”
“It’s great product that we can attract customers that have heretofore not been able to stay with us that want to be in an urban environment and adventurous and they need a product at a price point they can afford whether they are young, in middle-aged or old. And when they stay with us we have a pretty good track record of getting them to try other things with us.”
HA Perspective [by Katherine Doggrell]: The global hotel operators have become talented at listening to owners, less so the consumer. But Airbnb cannot be ignored, as it nibbles at the edges of performance and casts a harsh light on the sameness of the hotel brands.
Finally, the end appears to be nigh for all those parents who were sick of drinking in darkened bathrooms, or under duvets, or in the corridor. And for all groups – any groups – who wanted to be able to share the same space and not bump into other guests while wearing their bunny onesies. And all at a price which everyone can enjoy.
The only factor holding this brand back now is the difficult urban development environment, particularly in the US. If the flag comes with inspiring F&B as well, Hilton could find that money will be spun. For the other operators, a competitor is a must have.