Less than half a year after announcing its 19th brand, Hilton has announced its 20th—a new extended-stay brand designed to meet the needs of the $300 billion workforce travel market. Through what the company describes as “extensive research,” Hilton developed a lower-midscale hotel product for this “vastly underserved” group looking for apartment-style accommodations for 20 nights or more.
The brand will launch in the U.S. under the working title Project H3 as Hilton navigates the final stages of the trademark process.
“Project H3 is perfectly positioned to serve the unique needs of the long-stay traveler, thanks to its innovative design, strong value proposition for our owners and of course, the hospitality our team members offer every day,” Hilton President and CEO Chris Nassetta said in a statement. “We aim to serve any guest, anywhere in the world, for any travel need they may have, and this new brand represents a greater opportunity for us to grow our portfolio while providing the reliable and friendly service our customers expect from Hilton.”
Developing H3
Hilton’s research shows long-stay travelers—including traveling nurses, military personnel and those relocating for work—will book an average of 20 or more nights and want a “reliable home base” that lets them to maintain their routines. As such, the new brand was developed to provide elements that will cater to these demands:
- Deliberate design: According to the company, the brand will "reimagine core design elements from the ground up." The exterior will include warm wood tones and a modern farmhouse-inspired palette with light industrial touches. Outdoor patios will have grills and a communal fire pit.
- Apartment-style accommodations: The suites will have an adaptable layout with four distinct areas for rest and work. Storage space and efficient closet design will complement movable, multipurpose furniture. Suites also will have a fully equipped kitchen with a full-sized refrigerator, dishwasher, microwave and two-burner stovetop.
- Nontraditional lobby: The "hyper-functional" lobby will be called The Hive, with sightlines from the front desk to the fitness room, laundry facilities and the retail market.
“Many long-stay guests never stopped traveling during the pandemic, especially within the lower-midscale extended-stay segment, and we designed a product in direct response to this growing need,” said Matt Schuyler, chief brand officer at Hilton. “Project H3 will disrupt the category and allow Hilton to better provide reliable and friendly service for those who are in it for the long stay.”
Owner Economics
Project H3 was developed with input from owners, and the company claims it kept "the needs of the development community and long-stay travelers at the forefront of the design process." The new brand prototype dedicates the majority of space to revenue-generating guestrooms in a bid to reduce overhead costs for prospective owners.
“Hotel owners have played an integral role in the development of Project H3 and they will continue to guide us as we build this brand from the ground up,” said Kevin Jacobs, chief financial officer and president, global development, Hilton. “Project H3 has incredible growth potential, tapping into the rapidly expanding and underserved workforce travel market. The response from the hotel owner and developer community has been immediate and enthusiastic. We’re engaged in more than 100 active development conversations, with many owners expressing interest in multiple locations.” Jacobs expects the brand to begin contributing to the company's net unit growth in 2024.