ATLANTA—All suites hotels are a hot trend in the hospitality industry—and they are also a good investment. So says Bill Duncan, global head of Hilton's All Suites brands.
GlobeSt.com asked Duncan to explain his view in part two of this exclusive interview. You can still read part one: Is This The New Standard For Urban Hotels?
GlobeSt.com: With all of the new brands entering the market, and all of the options at various cost per key price points, why are all suites hotels a good investment?
Duncan: All suites hotels have a track record of providing a strong return on investment, including during economic downturns, and having growing appeal with business and leisure travelers. The profit margins for this segment, especially with the extended stay brands, are strong, and ADR continues to steadily increase while occupancy remains high.
Compared to 2014, all of the All Suites brands saw increases in occupancy, RevPAR and ADR. Most notably, Embassy Suites and Homewood Suites saw a more than 5% increase each in RevPAR, while Home2 Suites saw a jump of nearly 9%.
The outlook for this segment also remains strong, especially in the extended stay space. The Highland Group's 2016 Extended Stay Lodging Market Report noted that RevPAR had increased by 7.4 percent, which was one of the biggest annual gains in the last 16 years. In addition, occupancy remains at the highest level since 2000, demonstrating the strong demand for these types of hotels.
Additionally, Hilton Worldwide's All Suites category, makes it easier for owners to compare different brands within this space to determine what makes sense for their portfolio. The synergies that are driven through this integrated approach also translates into more savings that are then passed on to the owner through revenue generating activities.
The reputation these brands have for delivering outstanding customer service, which supports guest loyalty and trust, is another strong selling point. Embassy Suites and Homewood Suites have both been recognized numerous times for their excellence in customer service by J.D. Power and Associates. Home2 Suites will be eligible for this ranking for the first time this year, and we expect great results for this fast-growing brand.
GlobeSt.com: In late 2015, we saw the announcement that Hilton has joined its three all suites brands under one category umbrella. How will this new organization help the brands continue to grow their footprint?
Duncan: The All Suites category was created to maximize synergies and drive efficiencies by uniting three of our award-winning brands, Embassy Suites by Hilton, Homewood Suites by Hilton and Home2 Suites by Hilton. The brands share many common factors across brand development, sales and operations, so it only made sense to take advantage of these to render savings that we can then put into revenue generating activities for our owners.
It's important to note that although we have created this category, each brand still retains its own unique personality and standards, as one of the tenants of the Hilton Worldwide portfolio is that it is comprised of 13 diverse, yet complementary, brands. Embassy Suites is also differentiated by its position as the only upper upscale all suites brand in the industry.
The All Suites brands are slated to open 100 new properties throughout the US and Canada in 2016, and we are identifying ways to leverage our opening and ramp up strategies for these properties. Also, these three brands have proven to be attractive and viable outside of the U.S., allowing Hilton Worldwide to continue to grow internationally. For example, we created a new Homewood Suites Latin American prototype in response to the demand we have seen in that region.
Join the conversation on April 28 for RealShare ATLANTA, the metro's premier CRE event. Click here for details and to register.
ATLANTA—All suites hotels are a hot trend in the hospitality industry—and they are also a good investment. So says Bill Duncan, global head of Hilton's All Suites brands.
GlobeSt.com asked Duncan to explain his view in part two of this exclusive interview. You can still read part one: Is This The New Standard For Urban Hotels?
GlobeSt.com: With all of the new brands entering the market, and all of the options at various cost per key price points, why are all suites hotels a good investment?
Duncan: All suites hotels have a track record of providing a strong return on investment, including during economic downturns, and having growing appeal with business and leisure travelers. The profit margins for this segment, especially with the extended stay brands, are strong, and ADR continues to steadily increase while occupancy remains high.
Compared to 2014, all of the All Suites brands saw increases in occupancy, RevPAR and ADR. Most notably, Embassy Suites and Homewood Suites saw a more than 5% increase each in RevPAR, while Home2 Suites saw a jump of nearly 9%.
The outlook for this segment also remains strong, especially in the extended stay space. The Highland Group's 2016 Extended Stay Lodging Market Report noted that RevPAR had increased by 7.4 percent, which was one of the biggest annual gains in the last 16 years. In addition, occupancy remains at the highest level since 2000, demonstrating the strong demand for these types of hotels.
Additionally, Hilton Worldwide's All Suites category, makes it easier for owners to compare different brands within this space to determine what makes sense for their portfolio. The synergies that are driven through this integrated approach also translates into more savings that are then passed on to the owner through revenue generating activities.
The reputation these brands have for delivering outstanding customer service, which supports guest loyalty and trust, is another strong selling point. Embassy Suites and Homewood Suites have both been recognized numerous times for their excellence in customer service by
GlobeSt.com: In late 2015, we saw the announcement that Hilton has joined its three all suites brands under one category umbrella. How will this new organization help the brands continue to grow their footprint?
Duncan: The All Suites category was created to maximize synergies and drive efficiencies by uniting three of our award-winning brands, Embassy Suites by Hilton, Homewood Suites by Hilton and Home2 Suites by Hilton. The brands share many common factors across brand development, sales and operations, so it only made sense to take advantage of these to render savings that we can then put into revenue generating activities for our owners.
It's important to note that although we have created this category, each brand still retains its own unique personality and standards, as one of the tenants of the Hilton Worldwide portfolio is that it is comprised of 13 diverse, yet complementary, brands. Embassy Suites is also differentiated by its position as the only upper upscale all suites brand in the industry.
The All Suites brands are slated to open 100 new properties throughout the US and Canada in 2016, and we are identifying ways to leverage our opening and ramp up strategies for these properties. Also, these three brands have proven to be attractive and viable outside of the U.S., allowing Hilton Worldwide to continue to grow internationally. For example, we created a new Homewood Suites Latin American prototype in response to the demand we have seen in that region.
Join the conversation on April 28 for RealShare ATLANTA, the metro's premier CRE event. Click here for details and to register.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.