LOS ANGELES (Reuters) - Hilton Hotels Corp, owned by the Blackstone Group, on Monday launched a new extended-stay hotel brand, Home2 Suites by Hilton, aimed at the mid-price market.
It will compete with chains like Intercontinental Hotels’ Candlewood and Marriott International’s TownePlace Suites, said Bill Duncan, brand manager for Home2 Suites and Homewood Suites, Hilton’s more upscale existing extended-stay brand.
Duncan said the new chain will aim for an average room rate of about $100, compared with Homewood’s average of $122.
He described the new brand’s style as “hip and humble,” with a modern but comfortable vibe that in consumer focus groups “appealed to everybody from millennials to baby boomers.” The millennial generation is made up of those born roughly between 1982 and 2002.
The company said it had already received 10 franchise applications, with the first Home2 Suites hotel expected to begin construction in the next 6 to 12 months. Duncan said all of the applicants had secured financing for their projects.
The per-room cost will be $70,000 to $75,000, Hilton said.
“During challenging economic times, developers turn to strong brand names they can trust that are supported by proprietary systems and programs ...,” Christopher Nassetta, Hilton’s president and chief executive, said in a statement.
The company estimated that 100 Home2 Suites will be open by the end of 2012, with another 60 to 70 opening each following year. The immediate focus will be on U.S. development, with expansion into Canada, Mexico and abroad in subsequent years.
Reporting by Deena Beasley; editing by Carol Bishopric
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