ATLANTA — It's been nearly 10 years since Hilton launched Tru, and now the midscale brand is hitting new milestones and anchoring Hilton's dual-brand development strategy.
Andrew Harp, brand leader of Tru by Hilton, said the brand is nearing 300 open hotels as the Tru portfolio stretches across the U.S., Canada, Mexico and South America.
Over the past 20 years, Hilton has streamlined its development formula for dual-brand hotels, Harp said during a video interview at the recent Hunter Hotel Investment Conference. Initially, Hilton developed dual-brand hotels in downtown urban markets, but now the company is expanding the concept outside of major cities, and Tru by Hilton has been a big part of that effort.
"Where we've gotten to today at Hilton is in some markets, we're doing, say, a Tru and a Home2 Suites together. Those may be 140- to 150-combined-key locations. So we're going into secondary and tertiary markets where, potentially, that dual-branded hotel is the Hilton of that market," Harp said.
For example, Hilton recently opened the Tru by Hilton Lumberton and Home2 Suites by Hilton Lumberton in North Carolina. Harp said the two brands from different segments pair well together when they share the same building.
"We see a lot of success when it's a transient brand, like a Tru or a Hampton, paired with an extended-stay brand like Homewood or Home2 Suites, and Tru-Home2 continues to be our most prevalent combination to date," he said. "We finished last year with about 30 open and trading, and it remains our most popular in the pipeline as well. Owners are seeing a lot of great synergies with Tru and Home2 in particular."
Combining Tru and Home2 Suites has been Hilton's most popular dual-brand hotel concept, but it's not alone. Among Hilton's recent dual-brand hotel openings, the company paired Tempo and Homewood Suites in Raleigh, North Carolina; Hampton and Home2 Suites in Austin, Texas; and Hilton Garden Inn and Home2 Suites in Nashville.
Owners and franchisees of dual-brand hotels can operate them with leaner staffing models, including one general manager and one director of sales, Harp said. Pairing hotels together from different segments also opens up the demand types that could stay at the dual-brand hotel, he added.
"Where they also drive a ton of efficiency is on the top-line revenue, because these hotels are able to cater to multiple segments," Harp said. "So extended-stay, transient, leisure, corporate, it's really a salesperson's dream to work at a dual brand, because they can essentially talk to the customers, to the guests, and say, 'What's your budget? Do you need standard rooms? Do you need suites?' And then they can offer them these plethora of options."
This year, Hilton is focused on the recovery of corporate and group demand at its hotels, Harp said.
"Group is obviously key. We think there's still going to be a ton of folks out there for all of those trip occasions, whether it's the SMERF groups [social military, educational, religious and fraternal], some of the corporate groups and training, we're really excited about being able to drive occupancy this year through group base," he said.
Most of Hilton's dual-brand hotel portfolio is franchised, but Hilton does manage a handful of dual-brand hotels, too, Harp said. Dual-brand hotels have been so popular that Hilton's franchisees are eager to develop more than one dual-brand property.
"What's been exciting for us to watch at Hilton is we now have owner-operators who are developing multiple dual-brand locations. ... They've cracked the code. They figured out all of these synergies and efficiencies, and they're coming back to do multiple deals with us," Harp said.
For more insights from Hilton's Andrew Harp, including specifics about the company's dual-brand prototype for Tru by Hilton and Home2 Suites by Hilton, watch the video embedded above.