Hilton HHonors - Should Hilton Hotels Consider Adding a Low-End Product?

Please allow me to start off with the analogy of the Honda Civic to explain what I am asking in this thread:

I owned a silver 1979 Honda Civic CVCC 5-speed automobile (http://www.adclassix.com/images/79hondacivic_cvcc.jpg) years ago. It had a choke. It ran using regular leaded gasoline as fuel. It had no air conditioning. There was no power anything. It was no speed demon. Still, it satisfied my purposes required for my transportation at that time, and it was reliable. I purchased it used for US$2,200.00 and it was worth every penny.

I then purchased a red 1986 Honda Civic Si 5-speed automobile (http://upload.wikimedia.org/wikipedia/en/3/3e/Image-Karma%40Reservoir%2702s.jpg), which was the first Si model. It had air conditioning, a rear brake light, fuel injection, power brakes, a moonroof and other features. Needless to say, the car cost considerably more than my first Honda Civic.

The Honda Civic had always been the low-end line of cars for Honda. They were cheap and reliable. However, over the years, they became faster, more comfortable, more technologically advanced, contained more and more features — and, inevitably, the price has also steadily increased. It is not impossible to purchase a fully-loaded Honda Civic today for greater than US$20,000.00.

To address the maturity of the Honda Civic, Honda introduced the Honda Fit (http://fp.images.autos.msn.com/merismus/as/autoshow2006/photos%5Cp_Honda_Fit_01.jpg), now the new low-end car for Honda. I suppose it needed to fill a void that expanded due to the maturity and improvement of the Honda Civic as the years passed.

I believe that Hilton Hotels is in a similar situation with the Hampton Inn brand. Once considered a competitor to brands such as Fairfield Inn, Hampton Inns have improved with more comfortable beds, a more consistent free breakfast, and other improved additional amenities. However, the rate for a room at a Hampton Inn has steadily increased. While it is still possible to find a room whose rate is US$75.00 per night, that rate is becoming increasingly scarce for a Hampton Inn room. In fact, it is not unusual anymore for a Hampton Inn to cost between US$130.00 and US$180.00 per night. While it is unusual, the rate at a few select Hampton Inns can cost as high as US$350.00 per night!

In light of the overall improvement of the Hampton Inn brand — and the steadily increasing room rates — should Hilton Hotels consider adding a low-end product? If so, should it be like what Hampton Inns used to be, or do you envision something different? What should be the name and identity of this new low-end brand? Should Hilton Hotels develop this low-end brand itself, or should it acquire an existing hotel company, much as it did when it purchased Promus years ago?

What do you think?

Maybe they could call them Paris hotels.Suitably trashy.
Seriously though Hilton have moved out of the low end of the market,fortunately as I have matured and enjoy and can afford the extra perks.However I am sure there are many who are like I used to be and looking for something cheaper though reliable.
Big problem-all us grumpy old Fters will bemoan the fact that it is now far too easy to obtain diamond status and express the wish to go back to the good old days when upgrades and free breakfast were not just a forlorn dream.

I have thought about this myself. Hyatt did just that when they bought U.S. Franchise systems. They now have hotels at various price points. The purchase of U.S. Franchise systems got them the mid-scale, extended stay Hawthorne Suites brand as well as the economy brand, Microtel.

A couple of concerns that Hilton probably has:

Diminishing the value of the "Hilton" name. Can a budget brand make Hilton proud?

Inability to execute HH benefits. If you believe some people in this forum, that even their more upscale hotels can't get the benefits right, how can a budget brand do it?

I'd like to see it. Most stays, I'm happy with what Hilton offers. And, I'd be happy to see the lowest end Hamptons dropped as soon as they can be, rather than a half-arsed attempt at upgrading them.

I'm not that familiar with the budget chains and haven't had a really satisfying stay with any. I'd love to see Hilton attempt it, though, and there would be nights when I would choose one. For me, though, those stays would be in lieu of a Hampton stay and I don't know if that's common enough to keep Hilton from trying. They'd have to feel they could win enough business from the other budget chains, not canibalize Hampton.

I think, now that Hilton has given up on the Scandics, that they should first expand with their low/medium brands to big cities outside of the US. The situation in places like London and Paris is now such that they have nothing to offer under something like 300 euros / 35000 points.

Ok.. first let me say I agree, I wish there was something in the $75 or less range for most places.. I know NYC would never have it but.. you know most places

I'm in frickin Huntsville AL and its close to a $100 for a frickin HI.. so I'm at the Fairfield where its 71

anyway, but I don't see why Hilton would do this, the margins would be way to low at a low end prop.. the fixed costs will only bottom out so far.. the variables will be less but not significantly and in the end the Gross Margins will probably just not meet Hiltons corporate goals. I just don't see it happening

I'm happy with the current selection! So, No!

I am lucky all of the hampton inns I stay in for personal travel seem to be in the 100-125 price range.

For business travel we go cheap...I am talking I am lucky to get a la quinta or the like so a low cost Hilton where I could still earn points would be nice.

CPTANGO

My company usually gets $59 rates at many HI's, so I don't think they'd be able to offer a lower product at a lower rate and still make money. They'd be competing against the Super 8 and Motel 6 crowd, which I don't think Hilton would really want anyway (think of the WN flyers we have in the US today).

Of course outside of the US, it would be great to see some additional Hilton offerings, as others have noted. It is risky to take a chance on a non-chain (with no point options) to save some $$$ during a European vacation, so I'll pay the extra money to get a product I know and trust.

In Europe, I think Hilton needs to have something in the 100-180 euro range even to attract business travellers.

I think Hilton has done a nice job segmenting the market. How much lower than a Hampton Inn do you want to go?

I really don't want to take a step down from Hampton Inn. That's why I tend to stay away from Fairfield Inns and Four Points unless they are new.

Can someone name a low-end product that delivers a consistently good experience. What about Holiday Inn Express? Any other ideas?

They'd have to feel they could win enough business from the other budget chains, not canibalize Hampton.I'm in frickin Huntsville AL and its close to a $100 for a frickin HI.. so I'm at the Fairfield where its 71I think Hilton has done a nice job segmenting the market. How much lower than a Hampton Inn do you want to go?I had the “opportunity” recently to stay at a Hampton Inn in Lumberton, North Carolina.

Even with the American Automobile Association rate, the room rate was US$139.00 per night, not including taxes, no matter which night or nights I chose to stay there.

Needless to say, I did not stay there, as I thought that room rate was absolutely ridiculous.

In this scenario, there would have been no cannibalization had I had another Hilton HHonors choice of properties. I also do not need a coffee maker in my room. For this stay, all I wanted was a clean, comfortable, yet reasonably priced room.

If they do, get ready for no stay/night credit (you can still earn points) toward elite status.

I had the “opportunity” recently to stay at a Hampton Inn in Lumberton, North Carolina.

Even with the American Automobile Association rate, the room rate was US$139.00 per night, not including taxes, no matter which night or nights I chose to stay there.

Needless to say, I did not stay there, as I thought that room rate was absolutely ridiculous.

And in the case of that particular Hampton Inn, unless it's seen major renovations in the last 18 months, those rates are way too expensive for a Hampton of that age, condition, and location.

Why doesn't Hilton start investing in the "pod" type hotels? No, not iPod.
(These are not the sleeper pods that are popular in Japan.)


But the hotels where everything is ultra compact, you are basically paying for a place to sleep and use the the bathroom / shower (no tub). Maybe there would be a TV available (in the upgraded rooms ;) ). There would be wi-fi in all rooms but it would cost you $5 for 24hrs, except if you had Hilton status, then it is free.
Maybe half the size of a regular Hampton Inn room or a little less then half the size.
Single and double beds only. No maid service during your stay. LED lighting to keep it cheap. No in room phone provided. I am sure a few other cheap / green options could be added to keep the costs down.
I think the only expensive thing should be good thick walls/floors/ceilings to block out your neighbor's sounds.
Everything would be branded whatever the brand is called with a tie in to Hilton.

I have seen similar options in articles in travel mags, for hotels in Europe.
I could see these being built in metro areas and being popular near airports.

$19.99 - $39.99 a night, depending on location and other amenities in room.

But I doubt we will see these, I just don't think they would go over that well in the US. We like our "space" too much.

Edited to add:
Stays at this type of property would only earn you half credit / half points.

I had the “opportunity” recently to stay at a Hampton Inn in Lumberton, North Carolina.

Even with the American Automobile Association rate, the room rate was US$139.00 per night, not including taxes, no matter which night or nights I chose to stay there.

Needless to say, I did not stay there, as I thought that room rate was absolutely ridiculous.

In this scenario, there would have been no cannibalization had I had another Hilton HHonors choice of properties. I also do not need a coffee maker in my room. For this stay, all I wanted was a clean, comfortable, yet reasonably priced room.

Not that I doubt you, Canarsie, but the nightly rates for the next 2 weeks for AAA members and AARPers (not you, I know) = 80.10-84.55 with the "best rate" = $89.00. It's a Cat 2, so I know it ain't the Ritz. Something going on while you were there? It's been years since I was last in Lumberton, but I wouldn't pay $139 for a private room in their hospital. :D

I don't think HHonors needs to bring on a lower-class property into its network. If people really need to stay at cheap hotels, they should consider other networks (like the Cendant chain.) I like the value the Hampton Inn brings to the mix ...but think the HHonors program and the Hilton chain would lose some equity by trying to attact even more downscale consumers in.

No. They shouldn't roll out a lower-scale property than Hampton.

I get what you guys are saying about the rates. Hamptons definitely are a few bucks more than a Fairfield Inn. But that's because Hampton has the best overall execution amongst roadside motels, so they are successful at filling the rooms at a higher price point. Isn't that in general what we want out of a roadside motel? A consistent product, cleaner/brighter/nicer than its competition?

I'm ordinarily a Marriott fan, but I avoid the FI's because Hamptons are markedly better. Fortunately, in practice, I tend to see maybe $10-20/nt. difference between the two. A given highway exit might have a $80 Hampton next to a $70 Fairfield and a gaggle of Motel 6-type properties in the $50 range. If the Hampton looks nice enough from the outside, I'm paying the $80.

I'm guessing these $300 Hamptons you guys are seeing are either unusual locations or special events like a college football game or NASCAR race? For my normal roadtripping needs - just random, standard Hamptons alongside I-70 or I-80, it's never been over $100 for me.

The only Hilton brand I don't really understand is Doubletree.

I really don't want to take a step down from Hampton Inn. That's why I tend to stay away from Fairfield Inns and Four Points unless they are new.

Can someone name a low-end product that delivers a consistently good experience. What about Holiday Inn Express? Any other ideas?

For a low-end brand it seems that Microtel has a good reputation. I believe that they are all new-construction, no conversions.

Holiday Inn Express is a fierce competitor of Hampton Inns, and is probably priced just a little lower than Hampton.

The only Hilton brand I don't really understand is Doubletree.

I'm curious, what don't you understand about DoubleTree?

Most of the HI's I have stayed in are pretty worn out. Maybe Hilton will make the franchisee remodel, or build new (that is happening in Southern Pines, NC - the absolute worse HI EVER!). If pricing is your gauge of low end then HI's are not a bargain anymore. If service is a consideration I don't think you get can go much lower.

I may be biased, or possibly have begun my aversion to them before having sufficient exposure to really comment, but the brand I really don't understand is DoubleTree Club, I have stayed at a few, and they ranged from poor to abominable. There's one in Livermore CA where I have an HGI stay Thursday, and I have avoided even checking it out. As I say, I might be biased.

IMO, if Hilton wanted to open a Microtel-level hotel with perhaps five base points per stay, maybe half-stay credit, there's probably a market foe it.

In the meantime, they seem to be avid to open more Hilton Garden Inn's in Europe, and they should consider re-branding a few UK Hiltons as Hampton Inns. (Maybe one or two folks have complained about here as DoubleTree Clubs. ;))

I had the “opportunity” recently to stay at a Hampton Inn in Lumberton, North Carolina.

Even with the American Automobile Association rate, the room rate was US$139.00 per night, not including taxes, no matter which night or nights I chose to stay there.

Needless to say, I did not stay there, as I thought that room rate was absolutely ridiculous.

In this scenario, there would have been no cannibalization had I had another Hilton HHonors choice of properties. I also do not need a coffee maker in my room. For this stay, all I wanted was a clean, comfortable, yet reasonably priced room.

Lumberton has been our halfway point on trips from NJ to Hilton Head. I can honestly say that the Hampton Inn is the finest hotel in Lumberton. I've tried the Fairfield, and the Best Western at 20-30 bucks less per night and my family would prefer, no insist that we go back to the Hampton on our next trip.

I have thought about this myself. Hyatt did just that when they bought U.S. Franchise systems. They now have hotels at various price points. The purchase of U.S. Franchise systems got them the mid-scale, extended stay Hawthorne Suites brand as well as the economy brand, Microtel.

A couple of concerns that Hilton probably has:

Diminishing the value of the "Hilton" name. Can a budget brand make Hilton proud?

Inability to execute HH benefits. If you believe some people in this forum, that even their more upscale hotels can't get the benefits right, how can a budget brand do it? Hyatt has had a lot of issues with integrating the new brands. At first you could earn points, but not credit for status. Now you can earn credit, but Hyatt is worried diminsihing thier brand. I can see now a lot of poeple getting points and status then using them at their high end properties.

I'm curious, what don't you understand about DoubleTree?

Why does it exist? It seems like they range from on-par with the Hilton brand (about 25% of the time) to downright crappy hotels (about 75% of the time). Why don't they take the good ones and rebrand them Hilton and take the bad ones and rebrand them...uhhhh...Sheraton? :p

Seriously: what is the purpose of the DT brand? Is it intended to fill some sort of gap between HGI and Hilton? And there are oddball DT's - like the one near Busch Gardens in North Tampa - that are a downright toilet. I seriously think the building was once a HoJo.

It's not that I don't "get" all secondary full-service brands. I get Renaissance and W. I kind of get Sheraton - in most places it's a clear step down from Westin. (I don't *like* Sheratons, but I *get* them.) But I really don't get Doubletree...

Id stay in a low budget Hilton in a heart beat considering most of my travel is out of my pocket(85%) not a corporations(15%).

No one forces me to book a Hampton Inn at over $100 per night.............so I rarely do it. I instead book a Comfort Inn, Days Inn, BW etc.

MisterNice