Hilton Worldwide intends to launch a midscale hotel brand
in the first quarter of 2016, a move that will enable the company to pursue a
market that it currently doesn’t serve, CEO Christopher Nassetta said during
the company’s second-quarter earnings call on Wednesday.
Nassetta said a huge swath of customers cannot afford to
pay room rates at its lowest-price chain, Hampton Inn, an upper-midscale brand
that was initially targeted at the midscale segment “but has grown up out of
it.” Hampton’s average daily rate across the chain will be about $115 this
year, Nassetta said.
Furthermore, Nassetta said that “there is no good midscale
product, and that’s why we are doing it.”
“We're doing it in a way that's going to be unlike anything
anybody has done. It's going to be all new build [as opposed to] product that's
out there that is almost no newbuild. That's going to be very appealing to the
customer,” Nassetta said.
Hotels will be constructed and operated “in a very
simplistic way to be able to drive returns like we've done with Hampton,” he
said. Nassetta envisions a “megabrand” that could amass more than 1,000 hotels
“just as we’ve done with Hampton.”
According to STR’s chain scale, prominent brands in the
midscale segment are Best Western, Ramada and La Quinta.