Hilton has officially launched a lower-midscale, extended-stay brand that will target guests looking to stay for at least 20 nights.
The new brand, currently known as Project H3, will offer apartment-style accommodations to meet the needs of the growing $300 billion workforce travel market, according to a company news release. Long-stay travelers, such as traveling nurses, military personnel and people moving for work, prioritize quality time and comfort, according to Hilton’s research. They will book a stay averaging 20 nights or longer, and they want a place that allows them to maintain their routines.
Hilton President and CEO Chris Nassetta teased the new brand during the company’s first-quarter earnings call, saying the brand could deliver “astronomical margins” on an efficient per unit build cost and would address unmet workforce housing needs.
“We’re talking about an average length of stay of probably 20 to 30 days on average, versus most of the core extended-stay brands with five to 10 days, in that range,” he said. “It’s a different demand base, different types of locations, which is why we love it because we’re not already serving it. It’s not competitive with Home2 and certainly not competitive with Homewood.”
Project H3 hotels will feature warm wood tones and a modern farmhouse-inspired palette with light industrial touches, according to the release. The outdoor patios will have grills, a communal fire pit and comfortable seating. The lobby, known as the Hive, is a nontraditional space that will provide easy access to all amenities. It will allow sight lines from the front desk to the fitness center, laundry room and retail market.
The suites will have an adaptable layout with four distinct areas for guests to rest, work, cook and refresh. There will be ample storage space with efficient closet design and movable multipurpose furniture. The fully equipped kitchen will have a full-sized refrigerator, dishwasher, two-burner stovetop and more.
“Many long-stay guests never stopped traveling during the pandemic, especially within the lower-midscale, extended-stay segment, and we designed a product in direct response to this growing need,” said Matt Schuyler, chief brand officer at Hilton, in the release. “Project H3 will disrupt the category and allow Hilton to better provide reliable and friendly service for those who are in it for the long stay.”
Owner-input helped Hilton design the brand to meet the needs of both developers and long-stay travelers. The brand prototype dedicates most of its space to the revenue-generating guestrooms, which reduces the overhead costs for owners.
“Hotel owners have played an integral role in the development of Project H3, and they will continue to guide us as we build this brand from the ground up,” said Kevin Jacobs, chief financial officer and president of global development at Hilton, in the release. “Project H3 has incredible growth potential, tapping into the rapidly expanding and underserved workforce travel market.”
Hilton has engaged in more than 100 active development conversations so far, Jacobs said. Several owners have expressed interest in multiple locations.
Several other major hotel brands have announced and launched their own new extended-stay brands over the years. Most recently, Hyatt Hotels Corp. announced its Hyatt Studios brand, and Marriott teased its own new extended-stay brand announcement during its first-quarter earnings call.