With its new Spark by Hilton brand launching today, Hilton is addressing a customer segment it never has before — the economy traveler.

For a global hotel company that is no stranger to brand launches — Spark marks its 19th brand — the economy segment had always been attractive but not top priority, said Bill Duncan, global category head for focused service and all suites brands for Hilton.

But the huge leisure travel boom of the past three years changed that thinking for Hilton executives.

Duncan said a few big-picture trends overlapped to make the economy segment a goal for Hilton: the sheer volume of travelers staying in economy hotels, years of nudging by hotel owners seeking conversion opportunities and founder Conrad Hilton’s vision “to spread the light and warmth of hospitality.”

“Our CEO Chris Nassetta was about translating that vision to everyone,” Duncan said.

“We found we really weren’t serving this [economy] customer at all.”

The idea of adding a new customer base was a big attraction, he said.

“The pandemic era exposed the fact that no matter your price point, people want to travel and will travel,” he said. “That opened our eyes up to the segment.”

Spark will be a conversion-only brand, starting in the U.S. but with potential for international expansion later. As for target locations, Duncan said anything goes, though secondary and tertiary markets are initial goals. The “sweet spot” room count is between 80 and 120 rooms.

Duncan emphasized that a conversion brand in the economy segment doesn’t mean standards are thrown out the window. Hilton is targeting “all competitor brands within the higher-end economy to lower midscale segments as conversion opportunities, and any age of property,” but every potential hotel must go through a review.

“We have 100 active deals and discussions right now with owners who have brought hotels to us,” Duncan said. “And we’ve said no to more than 100 already that don’t meet our qualifications.”

Once hotels are signed and approved and firms are hired to do the required renovation work, conversion should take seven to eight months, which means Hilton expects its first Spark hotels to open this year, Duncan said.

Spark by Hilton hotels that make the cut will be required to renovate rooms, lobbies and exteriors to incorporate “simple, inspired design with splashes of color and cheer that bring the outdoors in,” according to the news release.

Digital tools such as 24-hour digital check-in and mobile keys are part of the model, and hotels will offer a basic breakfast with coffee, juices and a bagel bar with toppings.

Duncan said attention to quality and consistency is lacking in the economy brand landscape, which will allow Hilton's Spark brand to stand out.

“Do you know how hard it is to be simple and practical? That is really tough to achieve,” he said. “Chris [Nassetta, Hilton's CEO] pushed us really hard on this launch to get to where he believed we should be in the segment. Guests have certain amounts they are willing to and can pay, and putting it all together to get there is like trying to solve a puzzle.

“Creating simple, practical affordable solutions for both owners and customers was hard,” he said. “But it’s a really fun challenge to be able to say, ‘If we can crack this code, we can open this up and achieve our ambition of serving people where they want to travel, whatever the price point.’”

Duncan said he’s not worried about overlap into Hilton’s next-closest brand, the midscale Tru by Hilton, which launched in 2016.

“Tru has really punched up its performance in the last few years so there’s significant distance now from Spark, which made us very comfortable,” Duncan said, adding that Tru is an all-new-build brand focused on primary and some secondary markets, giving it a wide-enough berth.

Spark by Hilton is the company’s 19th brand. Hilton has launched several new brands in the past few years:

• Tempo by Hilton launched in January 2020 as an upscale lifestyle brand designed to appeal to what the company called “modern achievers,” or brand-loyal travelers interested in maintaining their daily routines while on the road. L&L Holding Company and Fortress Investment Group are developing the first Tempo by Hilton as part of TSX Broadway, a 46-story entertainment and hotel tower in Times Square, set to open this year.
  
• Hilton set out to expand its nascent luxury collection brand LXR Hotels & Resorts in 2019, with management agreements with The Biltmore, Mayfair in London, and Habtoor Palace in Dubai. Today nine hotels around the world are included under the LXR Hotel & Resorts flag, including the brand’s first new-build hotel in the U.S., Crockfords Las Vegas, which opened in 2021 as part of Resorts World.
  
• Signia Hilton launched in February 2019 as an upper-upscale meetings- and events-focused brand, debuting with a renovation of the Hilton Orlando Bonnet Creek. Signia by Hilton hotels also are now open in San Jose, California, and Atlanta.
  
• Motto by Hilton launched in October 2018 as a midscale “hostel on steroids” designed for urban locations, according to the company. The brand now has six hotels open around the world and more than 20 hotels in the pipeline. Motto expanded internationally in 2022 with hotels in Rotterdam and Tulum, Mexico.

Return to the Hotel News Now homepage.