Hilton’s history of running brands in the top half of the quality scale makes it an unlikely entrant in the economy segment, where it’s hard to spark joy in consumers. But some developers may find the new brand Spark by Hilton commercially promising.
Hilton Worldwide is rolling out its first-ever hotel brand in the economy slice of the market, Spark by Hilton, taking on rivals such as Marriott International, Choice, and InterContinental Hotels Group in this competitive market segment.
The new concept focuses on an easy-to-maintain design for developers providing basic amenities at a rate range of approximately $85 to $100 a night. That pricing range puts it in the “premium economy” segment. It offers less space and amenities than Hilton’s midscale lifestyle brand Motto or its urban limited-service brand Hilton Garden Inn.
The Spark by Hilton pitch is a conversion brand aimed at developers and other hotel investors with properties between 60 and 100 rooms that they’ve flagged with other chains.
“If you’re willing to go through conversion for just a bit of time, the long-term development play here is that you’ll elongate the life of the property and command a higher occupancy and a more premium rate thanks to the Hilton demand engine, coupled with a clean and safe and reliable hotel structure that we’ve streamlined,” said Matt Schuyler, Hilton’s chief brand officer.
“We looked at this space and saw there’s just not great product across the space in general,” Schuyler said. “There’s a lot of inconsistency. So we saw a great opportunity. We’ve got close to 200 deals in various stages of discussion now, with over 100 that are relatively solid in some form of development.”
From the consumer perspective, the pitch is to travelers driving down a major American freeway and seeing economy hotels at the crossroads of exits and not being sure if the properties are going to feel dirty and safe but not wanting to spend much for more than the basics just for an overnight stay for you, your family, and possibly your pets.
The Spark by Hilton design is minimal. The bathroom has a basic sink, mirror, and simple shower stall, while the bed has wall-mounted nightstands next to it. There’s a clothes bureau. a TV, and a table that can flex and extend for different purposes. That’s essentially it.
“We did a massive amount of studying of consumer sentiment and behavior to get inside the minds of the traveler today,” Schuyler said. “Roughly 80 percent of the travelers we talked to said they had occasions to use an economy brand.”
Hilton’s move comes at a time of a few other brand rollouts as Marriott, Wyndham, and Best Western recently debuted new extended-stay/apartment brands in the past few months.
Over 15 years, the McLean, Virginia-based hotel giant has doubled its number of hotel and resort brands to 19 and more than doubled its number of rooms to 1.1 million.
It seems likely more brands are yet to come, given that Chris Nassetta, president and CEO, said his company’s goal is “to serve any guest, for any trip occasion, anywhere in the world.”