The Jacksonville property also falls into that urban category. Landcom Hospitality Management Inc., also in Jacksonville, developed that property. Henry B. Fonde Jr., senior vice president and director of hotel development, says Landcom built another Hilton-branded hotel, a Hampton Inn, in the city. "Due to the success we had with a Hampton Inn in the Downtown Jacksonville market approximately 12 years ago," he says, "we knew that there was additional transient demand. But we were also aware of extended-stay demand in the market and the absence of any other extended-stay product Downtown. We had a hard time making the decision of which way to go, but at the end of the day, we decided to do the dual-brand property."

By doing a joint build, Fonde concedes the company gave up the opportunity to sell two hotels separately at a later date in favor of the efficiency gained by merging two reservation systems to lure in guests as well as the ability to share housekeeping and engineering services. "It's always less expensive to build one building than two buildings, one roof rather than two and one fire system rather than two fire systems," Fonde says.

The total cost of the Jacksonville project was $30 million. Fonde estimates that the company realized about a 30% discount by constructing two products under one roof.

Since the hotels are still in the ramp-up stage, Fonde could not give a projection on operational cost savings. Yet he points out that sharing staff between the two hotels is a major plus. "If we had two separate buildings, we might have to double the headcount on employment," Fonde explains. "We are able to save on that. In many cases, we have one employee instead of two."

Fonde also declines to release any figures on occupancy, RevPAR or ADR. He does admit that the recession has prolonged the hotel's ramp-up period. "By the same token, we think we will buck the trend as we start coming into the recovery," Fonde says. "Having the newest two products in this particular market with Hilton flags will allow us to perform a lot better than the competitive set."

Doing a joint build does come with some unique hurdles. First, Landcom had to convince regulatory authorities it was building one structure, not two. Dividing up the utility costs between the two products and generating two separate P&L statements also requires more work on the part of ownership. Then there is the problem of melding the sometimes divergent property management and tech systems of each individual brand. "Nothing that can't be overcome," Fonde says, "but little issues come up in the process."

The Jacksonville Homewood/Hilton Garden Inn was Landcom's first joint build, and Fonde says the company desires to do more such projects. "I'm pleased with the way this one has turned out and I would love to go in that direction," he says. "But I don't know when the economy is going to allow for more development. I do think it will eventually happen and this will be one way to do new development in the future."