Extended Stay’s Long-Haul Potential

At the Americas Lodging Investment Summit held in San Diego in late January, Hilton Hotels Corp. announced Home2 Suites by Hilton, a midscale extended-stay brand. Bill Duncan, global head of brand management for Hilton’s Homewood Suites and Home2 Suites, talked with hospitality editor about the brands.Gilligan: How did Home2 Suites come to be?Duncan: We have worked on this since March of last year. We have received a large amount of owner input, and that information has helped us build and design the brand. We talked to the owners of our focused-service brands, and we received input from customers, as well. We have been able to move the brand introduction along quickly, with a few minor tweaks along the way.Gilligan: Where do you want to see Home2 go?Duncan: We want to grow in the U.S. and Canada and then move into Mexico. We have received 25 applications, and there are 25 more in process. We have designed the rooms to appeal to Gen X and Gen Y travelers, but we found that the rooms appealed to all age groups. Baby Boomers are still the biggest travel segment, so that’s important. The rooms are hip and humble—“hip” meaning up to date and “humble” being comfortable. Comfort is important when your guests are staying 10 or more nights. We will have a balance between extended-stay and transient travelers.Gilligan: What is the outlook for Homewood Suites, the other brand you manage, this year?Duncan: We’re on track to open 40 hotels, a 15 percent increase over last year. We have some great locations and some unusual locations. For example, we have a combined Homewood Suites/Hilton Garden Inn in Brooklyn that is set to open in the third quarter of this year. The segment is strong, as corporations have project managers, for example, that have to travel to sites and stay for an extended period of time. It’s tough to pull them off the road.Gilligan: What is your forecast for the hotel industry?Duncan: We are seeing interest in our brands. There is activity. Developers are securing sites. It does take longer to get deals done—things are slower—but there is activity.