IHG has unveiled its 17th brand: Atwell Suites. The official reveal came yesterday during the IHG Americas Investors & Leadership Conference currently underway in Las Vegas.
“We see an $18-billion opportunity with a segment of guests who really are not being served well in the industry today,” said Heather Balsley, SVP/global marketing-mainstream category, during a media call to present the new concept. “This brand will rightsize the amenities that they [guests] need because right now they're falling between the full amenities that an extended-stay brand offers and the more limited amenities that a select-service brand offers.”
IHG expects to release its franchise disclosure document in September, putting the company on track to begin construction on the first hotel in 2020 and opening the first Atwell Suites in 2021. Initial development will be focused in the United States. While the brand is expected to carry a 5 percent royalty fee, the first 100 signed license agreements will be eligible for a 2-percent fee discount in the first year and a 1-percent fee discount in the second.
Suite Opportunity
The new brand had been teased during IHG’s Q4 and full-year 2018 earnings call, when CEO Keith Barr said the all-suites segment of the Americas’ upper-midscale market has grown in scale by around 70 percent over the past four years, “which speaks for itself in terms of the clear demand from both guests and owners.
In deciding whether or not to create a new brand or adapt an existing one, Balsley said the IHG team evaluated options and conducted consumer research to see what demands its existing extended-stay brands, Staybridge Suites and Candlewood Suites, might not be meeting. "We found a pretty significant unmet need with [our] target guests,” she said, describing the target Atwell guest as an “opportunity seeker” who blends business and leisure when traveling, and who wants larger public spaces than private ones.
“We believe that launching this new brand will allow our existing brands to stay true to what already makes them great and what has delivered really strong guest satisfaction and owner returns," she said, noting Atwell Suites will fit in the upper-midscale segment with a price point below where Staybridge Suites is currently
Efficient Efficiencies
Atwell Suites will be a new-build brand, although Barr said in February the company would consider conversions “for appropriate, high-quality, upper-midscale assets that have the right physical design, too.”
The current prototype does not include one-bedroom options, said Balsley, but will offer either a 321-square-foot studio with a single king bed or a 409-square-foot studio with two queen beds. The cost to build, she estimated, would be between $105,000 and $115,000 per key [market dependent]. The hotels were designed, she added, with an “efficient staffing model” that includes limited housekeeping—“more consistent with other longer-stay brands, as well as a focused food-and-beverage option.
“We built this brand to be flexible, giving these guests options at every turn so that they can choose the elements of the stay that are right for them at that moment,” said Balsley.
Unlike extended-stay properties that support stays of several weeks or longer, Atwell will be geared toward stays of four to six nights. As such, some of the amenities found at other extended-stay hotels will be limited. “Our research showed that our target guests, the opportunity seekers, they actually don't like to cook when they travel even when they're staying for a longer period of time,” Balsley said. “As a result, we've designed these studios with a ‘right-size’ kitchenette with a counter-height fridge, a microwave, a coffee maker and sink—but not a full kitchen. This kitchenette will not have full cooking capabilities.”
Studios also will have a work area with a high-top desk/table, a pullout sofa and a closet that can be accessed from both the guestroom and the bathroom.
Following the model of other extended-stay brands, the hotels will serve complimentary breakfast with two to three hot items along with cold grab-and-go options. Balsley expects costs similar to Holiday Inn Express and Staybridge Suites, which also offer a complimentary breakfast. At the end of the day, the lobby will become a bar with small food bites available. A meeting space also is integrated into the lobby for small functions.
Photo credit: IHG