It was March 2011 when Home2 Suites by Hilton rose out of the ground and debuted its first property in Fayetteville, N.C. The opening became the quickest launch in Hilton Worldwide’s history. In the Oasis lobby of the premiere property, Bill Duncan, the brand’s leader, told reporters at the time, “We now get to see this come to life exactly the way we thought it would.”
This month, the much ballyhooed extended-stay brand has quickly risen to open its 10th property on the Gulf Coast of Mississippi. It’s a rapid rise for a new-build brand, particularly in a tough development environment. And, the brand isn’t standing pat. In an interview with Duncan, he told Lodging, that there are 15 Home2 Suites that are actually under construction. “We have more deals coming in everyday so there seems to be some good momentum not only on the development front, but also moving to under construction,” he says.
For the uninitiated, Home2 Suites is positioned to fit in the midscale extended-stay market, an area where Duncan said franchise partners told Hilton Worldwide that it needed a brand. But the brand is different in many ways.
One of the distinctive aspects of the brand is its emphasis on outdoor activities. The brand also puts an emphasis on guest interaction and healthy activities. On the development side it is designed to be a fast build. The expected timeframe for groundbreaking to opening is approximately nine months.
The last 15 months since the first property emerged has been a busy one for Duncan and his team. At the time of the first debut, Duncan said he expected that finally having a working showcase of the brand beyond drawings and renderings would help developers realize the potential of Home2 Suites and its unique value proposition in the extended-stay space. Now, he says that it is exactly what has happened.
“It did and it continues to something that we are focusing on,” he says. The brand is holding a series of developer forums, which are being held at the existing, operating properties. “We’re bringing in potential developers, feasibility analysts, finance professionals, anyone who is interested in Home2.
“Once people see, they believe,” he continues. “It’s fun, it’s new, and it’s well planned out.”
And it’s not jus the bricks and mortar that have impressed those potential investors. The existing Home2 Suites have already been putting up good numbers, according to Duncan, although he says he’s still limited in what he can divulged due to the youth of the brand and the lack of enough mature comparables. “We’re about two or three months away from that, but the overall numbers seem relatively strong,” he says.
He does allow that that year-to-date for all of the brand’s hotels, the brand is running at about 65 percent occupancy. “Everyone’s very pleased,” he says. “Most of the owners are actually working on their second, third, and fourth deals.
“Our distributions figures are great, “ he continues. “It really proves the strength of Hilton and how it can really help boost a brand.”
In the world of extended-stay development, the given is that upon opening, the hotel will have to initially serve more transient guests than long-term guests while the property takes hold and slowly changes over to primarily long-term guests. The beginning of Home2 Suites is no different. Currently, Duncan says, the brand is running at approximately 44 percent extended-stay guests as it works toward that always magic number of 50 percent which most extended-stay hotels seek to achieve.
“The ramp up is typically more transient and they extended-stay should increase over time,” Duncan says. “That is happening and overall the numbers look really good.”
Duncan allows that since properties started going up that there has needed to be slight changes to the design. “The biggest change is we redesigned the “Working Wall” a little,” he says of the signature guest suite wall that is designed to serve as functional space and to create three distinct work zones: kitchen, living/work, and bedroom.
“We found that there could potentially be some small inconsistencies in the floor that may make a contiguous counter surface problematic,” he says. “So we adjusted it to have different heights.”
He says that besides the adjustment to the working wall, the design in its original state continues to stand up. Duncan credits that to the fact that it was originally designed with input from Hilton owners.
“He took what they liked and didn’t like; and what they’d seen work and not work and put it all together,” Duncan says. “That’s allowed us to move quickly with minimal changes.”
Duncan allows that the growth of the brand, while moving quickly has actually been slower than originally planned due to the economy. “Obviously, it took the whole industry by surprise. It affected everyone, including us, but we made it through and we’re picking up steam again,” he says.
Now in double figures in open properties, Duncan is looking forward to continued growth and development. And, there seems to be very little hindrance to that goal.