Hilton Launches New Focused Service Brand

1/30/2009

Hilton Hotels Corporation announces the launch of Home2 Suites by Hilton, a new mid-tier, extended-stay hotel concept targeting the savvy, value-wise, extended-stay guest, an under-represented segment of the marketplace. The announcement was made at a special media and developer event prior to the kickoff of the 8th Annual Americas Lodging Investment Summit in San Diego, Calif. To demonstrate the strong interest from the hotel development community, 10 submitted franchise applications were announced at the event, with the first Home2 Suites hotel expected to begin construction in the next 6 to 12 months. Executives anticipate an additional 10 to 15 franchise applications to be approved within the next 30 to 60 days.

"The addition of Home2 Suites to Hilton's industry-leading family of brands is an exciting milestone for our company," says Christopher Nassetta, president and CEO, Hilton Hotels Corporation. "During challenging economic times, developers turn to strong brand names they can trust that are supported by proprietary systems and programs like our Hilton HHonors, OnQ technology, global reservations and cross-selling, eBusiness, and our worldwide sales and marketing force."

Key features
Home2 Suites, a complement to the current Hilton Family of Brands, will embody the following attributes:

An authentic new design and brand personality that greets guests upon arrival and is reflected throughout the property.
The "Oasis," an expanded living zone with a community table, individual work zones, a pantry, integrated guest laundry and activity room.
More amenities and services such as complimentary continental breakfast, walking/exercise course, fitness facility, indoor pool, outdoor living rooms, outdoor grills and more.
An innovative guestroom design that features an iconic 'working wall,' a series of modular, brand-designed millwork pieces that serve as workspace, closet and storage.
Fundamentally sustainable design with no impact on the cost of operations or the guest experience with amenities such as EPA Water Sense plumbing fixtures by Kohler, bulk shower dispensers, dual-flush toilets, and recycled flooring.

"The mid-tier, extended-stay segment accounts for approximately 42 percent of the U.S. extended-stay supply, with current brands delivering an often inconsistent and quickly-aging product," says Phil Cordell, global head of focused service brands, Hilton Hotels Corporation. "Home2 Suites will offer developers an opportunity to enter the segment with a comfortable, yet stylish product at a low cost per key."

Home2 Suites will require a minimum of two acres for site development, less than most competing brands in the segment. Development plans call for four-story, wood frame construction with an average of 108 guest rooms. The properties will be comprised of approximately 80 percent studios and 20 percent one-bedroom suites, at 323 and 509 square feet, respectively. Public space will account for approximately 4,200 square feet. Average cost per key, excluding land, will average $70,000 to $75,000.

Home2 Suites forecasts 100 properties open by year-end 2012, with 60 to 70 per year thereafter. Immediate focus will be on U.S. development, with expansion into Canada, Mexico and abroad in subsequent years. Submitted franchise applications announced today at the ALIS Conference included sites in New York City, N.Y., Baltimore/White Marsh, Md., Charlotte, N.C., Jacksonville, N.C., Gadsden, Ala., Alabaster, Ala., Elko, Nev., and three hotels in San Antonio, Texas.

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