Hotel giants in new focus on midscale brands

Hilton and Starwood need “something” in midscale segment
Global hotel group Hilton plans to launch a midscale brand in the next 12 months, with the hoped-for result of attracting new customers with lower rates.
“For sure, you are going to see us do something in that category. And we think that could be a mass-scale brand globally,” Hilton Worldwide CEO Christoper Nassetta said.
Upscale hotel giants like Hilton and Starwood “feel they have something lacking in the midscale segment and plan on doing something about it,” Skift writes.
Nassetta said during a conference call that organic growth is always preferable to inorganic growth. He explained: “I think, particularly an entry-level brand that would replace what space Hampton has, which with all of its amazing success has exited as it’s moved up. And I think we could stand to have a slightly lower price point brand in the mid-scale segment that would allow us to capture customers earlier in their lifecycle and garner their loyalty to allow them to grow up with us in our system and shop in and around our system with our other brands.”
He added: “So…whether it’s this year or early next, sometime I’d say in the next 12 months, for sure, you are going to see us do something in that category. And we think that could be a mass scale brand globally. I mean, it will start likely in the US, but given the scale of the Hampton brand as an example, we have over 2,000 hotels open. This could be amongst the largest brands by hotel count that we have. And I think we will be a very powerful driver of bringing new customers in and continuing to build loyalty.”
In other news, Hilton Worldwide said its first-quarter net income rose 22% from last year to $150 million amid a 10% increase in revenue to $2.60 billion. Hilton has around 240,000 rooms in its pipeline, with 56% of the properties in development in the US.
Skift / American City Business Journals
[pictured: Hampton Hotel, Dublin]