Maria Wood is senior editor of Real Estate Forum magazine.
NEW ORLEANS—At a time when the hotel industry still struggles to overcome its slump, Hampton Inn and Hampton Inns & Suites, the mid-priced, limited-service offerings of Hilton Hotels Corp., introduced a widespread set of changes to its product line. The alterations touch on everything from the breakfast service configuration in its properties to the addition of high-speed Internet access and new bed linens in its hotels.
The new look was unveiled at a Hilton conference held here for its limited-service chains, which include Hampton, Hilton Garden Inns and Homewood Suites by Hilton. The event was attended by more than 3,000 owners, general managers and director of sales, of which about two-thirds were affiliated with the Hampton brand.
According to brand executives, the changes were the result of customer research as well as discussions with owners, GMs and hotel employees done over the past two years. Over the next two years, and at a cost of some $100 million to the owners, the changes will be implemented in all existing hotels, said Phil Cordell, senior vice president of Hampton brand management. The brand itself is kicking in between $7 million and $8 million to fund the alterations required in the breakfast areas of each hotel.
"This will change how people think of our brand," said Tom Keltner, EVP of Hilton Hotels Corp. and president of brand performance and franchise development. Hilton executives contend that the program is unique in that it will be incorporated in existing properties, not just newly built Hamptons. Currently, about 100 Hamptons are testing these new service and product orientations. All told, 1,260 hotels fly the Hampton banner.
Although the formal announcement was not made until this week's owners' meeting, Cordell stated that many owners are already aware of the new program and the feedback has been "very positive." The Hampton brand feels so strongly that these changes must be implemented in each hotel that any hotel owner who declines to undertake them could potentially be dropped from the system.
In essence, the changes are aimed at giving an upscale feel to a mid-priced lodging product, Cordell said. He could not give an estimate of how much additional revenue a hotel owner might realize from implementing these changes. But he noted that the Hampton chain has performed ably even during the economic recession. "We're confident in our performance in tough times," Cordell said. "When the recovery comes--and even when there is another downturn--we will stay in a position of strength."
The Hampton chain is proving to be one of Hilton's top draws with developers. According to Lodging Econometrics, as of September 2003, Hilton ranked first among the top 10 lodging companies in the category of hotels in the active development pipeline, or those expected to open or begin construction in the next 12 months, with 279 properties and 36,667 rooms. Of the company's total rooms pipeline, approximately 30% were in the Hampton chain, tops among all its brands.
William Edmundson, VP of brand performance and support for the Hampton system, said that he expects the chain to grow 1,300 by year's end. Much of the system's growth will occur in the West, where "we don't have a high saturation and there are more opportunities."
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