Dive Brief:
- Hilton announced the newest addition to its brand portfolio on Tuesday. The forthcoming apartment-style concept, currently under the working title Project H3, will cater to guests who stay 20 nights or more.
- The lower-midscale hotel brand was informed by Hilton’s research showing long-stay guests to be a “vastly underserved group.” These guests include traveling nurses, military members and workers undergoing job relocations.
- The need for extended stay hotels has been on the rise in recent years as the pandemic changed guests’ work and travel habits. Developers are also drawn to the concept for its lower-maintenance business model.
Dive Insight:
Many long-stay guests continued traveling during the pandemic, “especially within the lower midscale extended-stay segment,” Hilton Chief Brand Officer Matt Schuyler said in a release.
Project H3 — a working title as Hilton navigates the final stages of the trademarking process — was developed as a “direct response to this growing need,” Schuyler said. “Project H3 will disrupt the category and allow Hilton to better provide reliable and friendly service for those who are in it for the long stay.”
Each Project H3 will feature a nontraditional, multifunctional lobby that offers sight lines from the front desk to the fitness machines, laundry facilities and a small store, meaning guests can grab a coffee and start their laundry in the same place.
The accommodations themselves will feature adaptable layouts with four distinct areas for residents to rest, work, cook and refresh. These suites will have ample storage space and movable multipurpose furniture designed to accommodate both work and rest. Amenities include a fully equipped kitchen with a full-size refrigerator, microwave and two-burner stovetop to allow guests to maintain their daily routines. Guests will access rooms via Hilton’s Digital Key.
Design will aim for warm comfort, with a modern farmhouse-inspired color palette and industrial touches. Hotels will feature outdoor patio space with a communal grill and fire pit.
In 2022, the extended stay hotels market was valued at $48.6 billion, according to Future Market Insights, which projected it would reach $132.4 billion by 2032.
Hilton is currently seeking owners and investors for the new brand. In recent years, extended stay hotels have been increasingly popular with developers because they’re more efficient than many other kinds of hotels and their models require less housekeeping, Lodging Econometrics Senior Vice President Bruce Ford previously told Hotel Dive.
At Project H3 hotels, potential revenue will be maximized by the nontraditional lobby format, which dedicates a greater portion of the hotel’s space to guest rooms and reduces overhead costs. Owners will be able to access Hilton’s above-property revenue management and sales support models to facilitate staffing and automated digital check-in, and Hilton’s Digital Key will make staffing more efficient.
Kevin Jacobs, Hilton’s chief financial officer and president of global development, said, “The response from the hotel owner and developer community has been immediate and enthusiastic. We’re engaged in more than 100 active development conversations, with many owners expressing interest in multiple locations.”
In March, Wyndham Hotels & Resorts announced a major expansion of its extended stay brand, Echo Suites, with 200 hotels in its pipeline. And earlier this month, Choice Hotels debuted a midscale “Premium Kitchen in a Box” model allowing franchisees to convert almost any transient hotel into an extended stay property.
