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Hilton Looks to Price and Design to Lure Millennials to Its New Tru Brand

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Skift Take

Hilton’s latest new brand is bringing all of the next generation hospitality trends to one cost-effective platform, which could potentially scale very well based on price alone.

— Greg Oates

The new Tru by Hilton hotel brand was designed to capture the very youngest travelers into the Hilton HHonors program, while also providing a more efficient construction model for owners and developers.

Hilton announced its new midscale hotel flag at this week’s Americas Lodging & Investment Summit (ALIS) in Los Angeles.

The first Tru by Hilton properties are expected to open in the U.S. by the end of 2016. Presently there are 102 confirmed agreements with owners, and over 30 others in various stages of negotiations, throughout North America in cities including Chicago, Dallas, Atlanta, Portland, Phoenix, Charlotte, Houston, Nashville, and others.

The big differentiators for this hotel brand are price and design.

Room rates at Tru by Hilton are expected to average between $90-$100 nightly, compared to $120 at Hampton Inn, another of Hilton’s midscale flags.

To accomplish that, there are only two standard guest room types, and both fall below the hotel industry average of 300-350 square feet in North America. The King and Double Queen rooms are 230 and 275 square feet respectively, which puts them more on par with European standard guest room sizes.

The rooms won’t have desks, bathtubs, closets, bedsprings or in-room coffee machines. They will have a fun little rolling chair with a pop-up desk, irons/ironing boards, a mini-fridge, and 55-inch TVs with 152 DIRECTV channels.

New Generation Hotel Design

Everything about Tru by Hilton is designed to provide a low barrier of entry for owners in urban, suburban and airport markets. Per-room construction cost, notwithstanding real estate, is around $83,000 compared to over $100K for Hampton.

“We’re very focused on making sure the return on investment is strong, and looking at building comps and operating comps, our goals are to drive returns comparable to Hampton, both in terms of GOP (gross operating profit) and return on capital,” says Alexandra Jaritz, global head for Tru by Hilton.

Meanwhile, as per one of the biggest trends in hospitality today, “The Hive” lobbies are being blown out to over 2,700 square feet for the 84- and 97-key prototypes. The overall design incorporates multifunction areas with moveable furniture for both animated social activity and quiet business workspace.

Jaritz told us, “We have not seen this large lobby space and activation yet in the midscale segment.”

Taking inspiration from many hostels, The Hive will have a Play House area with foosball and pinball games surrounded by tiered seating. Also standard, there will be a small fitness area, 24/7 market, and breakfast buffet.

According to Phil Cordell, global head of focused service brands for Hilton Worldwide, all Tru properties will be newbuilds or adaptive reuse projects. Because the guest room sizes are smaller than average, that means that no previous hotels in the U.S. will likely be converted into Tru properties.

Cordell adds that all Tru by Hilton hotels with have keyless mobile entry and a 48-hour window pre-arrival where guests will be able to choose their specific room through the Hilton HHonors app. All of this is designed to improve operational efficiencies and save on labor costs.

He says, “We need to streamline operations so that they are efficient as can be, because in the midscale hotel category, labor is our most expensive operational cost.”

Fresh Hotel Website Design

The creative surrounding Tru by Hilton is fresh and energetic, produced by the GSD&M media agency in Austin. The brand pillars behind Tru are “simplified, spirited and grounded in value,” says Jaritz, but the creative makes that a lot more fun than it sounds.

The videos especially seem to be targeting a very young 20-something audience with their Batman-style pullout quotes and bubblegum colors.

Jaritz says that’s by conscious design. The message to the media behind this is that Tru by Hilton is fun for all ages, but the creative clearly shows the goal is to win young travelers’ hearts.

“We tried to be disruptive with the creative because if you look at what’s out there in the segment today, it’s all very much focused on a traditional look and feel,” she told us. “This says we’re different. We have a youthful mindset.”

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