‘Tru’ Story on Hilton’s Newest Brand

On Jan. 25, Hilton Worldwide unveiled Tru by Hilton, a midscale brand geared toward the millennial traveler with bright pops of color and a minimalist approach to design. Right out of the gate, Hilton has signed 102 hotels, with another 30 in various stages of approval. The typical hotel will have 98 rooms, with a cost of $84,000 per room–a cheaper option for owners than Hilton’s Hampton Inn brand, which comes in at $110,000 per its average 130 rooms. Phil Cordell, global head of focused service and Hampton brand management, sat down with LODGING at the Americas Lodging Investment Summit to give the skinny on what makes Tru stand apart from the competition.

Why was it time for Hilton to enter this segment?
If you group together the midscale and economy segments, that’s 40 percent of travel in the U.S. today. So there is a compelling argument that says 40 percent of travel and some of that’s in midscale. We know that 20 percent of our HHonors customers don’t stay with us today because they need to step away to a different price point, and we don’t have a brand that meets their needs. The midscale segment is pretty recession resilient. People still travel, they still do some weekend stuff. This is going to be a great hotel for business and leisure travel. If you take a product that’s new and unique, cost effective to build, driving a good rate, with operating ease, and put “by Hilton” behind it to get our commercial engines, it’s a win.

Can you describe the layout of Tru?
The room is smaller, and the commercial space is bigger. The standard guestroom with a king bed is 225 square feet. But it’s a room that’s very well designed. It has everything a guest needs to be comfortable, with some “wow” moments. The bathroom is larger than you would expect to see in a hotel at this price point, with a nice shower. We figured we’d give them a clean bed, a 55-inch TV with 152 channels from DirecTV, and a work area that’s really a chair with a tablet arm, so they can use their laptops. They have room to plug in everything, if they’re sitting on the bed. So the room is simple, but it’s got some spirit to it. And the commercial space is about 2,800 square feet, divided into four zones: a work zone, a hangout zone, a play zone where there are games, and then the zone where we’ll serve breakfast.

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Are the signed deals primarily conversions or new build?
When you look at the oversized lobby space—the commercial space that we call The Hive—and the smaller guestroom, there is nothing that converts to that. It just doesn’t. We’re going to have a few urban locations out of the box downtown, so we’ll do some adaptive reuse in high-barriers-to-entry markets. But everything else will be new build.

Where will the first Tru open?
We’ll have a few open this year. I wish I knew which one it’s going to be—there are two or three that are going to be really close. Of the deals we have signed, there is geographic diversity: Atlanta, Denver, Phoenix, Portland, Dallas, Chicago—they’re all spread out. We’ll focus first on the U.S., and probably a little bit later in the year, think about Canada.

In terms of the markets you’re targeting, where’s the sweet spot?
It’s kind of everywhere. We’ll have a couple of urban locations right out of the gate—which is not what I expected—some university towns, airports, and suburban areas. We’ve got a few that are king of their market in a secondary or tertiary market, so it will be the Hilton for that particular market. It sounds self serving or arrogant, but I think it’s going to fit just about anywhere.