Hilton Re-Enters the Mid-Scale Segment

Hilton’s groundbreaking announcement yesterday of its new brand – TRU by Hilton – created a seismic event in the lodging industry.  You can read the TRU announcement press release here.  With this new brand, it re-enters the mid-scale segment of the industry with a product that is targeted squarely at Millennials.  Coincidentally (or not), in 2016 Millennials will become the largest guest demand group in the U.S. hospitality industry, surpassing the venerable Baby Boomers for the first time.

Hotel development utilizing the traditional hotel size and shape has become difficult as available sites tend to be too small or oddly shaped.  The compact size of the new brand solves this issue in many cases.  New opportunities created by this brand will help fuel Hilton’s growth, and the growth of numerous Hilton developers such as Springwood Hospitality.

Hilton’s research shows mid-scale guests are dissatisfied with the consistency of the quality experience they see at mid-scale hotel chains.  Sometimes it’s great; sometimes it’s awful.  The guest feels as if she’s playing “reservation roulette.”  Hilton will bring its quality and brand consistency to bear to build a dominant brand in this market segment it has not served for more than a decade.

Its Hampton brand abandoned the mid-scale segment years ago as it gradually moved upmarket with improvement after improvement.  Hampton Inn & Suites by Hilton is now considered an “upper-mid-scale” brand.  Just as many car manufacturers have recently done (BMW 1-Series, anyone?), Hilton is rejoining the segment with a trimmed-down version of its biggest winner.

And just as car companies are doing, the smaller model will pack many of the best luxury features of its larger cousin.  From the 60″ TV’s to the roomy shower stalls, guest rooms in the new brand are poised to delight.  From the second a guest steps into the fresh lobby with its game area and upscale retail feel, he’ll know he’s stepped into something totally fresh; completely different.

Springwood is excited to have two new TRU by Hilton hotels in our development  pipeline.  Stay tuned for more announcements from us about where these hotels will open.