Which branding strategy is Hilton using? Why is this appropriate for Hilton?
Case 11.2 Hilton Worldwide Expands to New Brands and New Markets
Hilton Worldwide was founded in 1919, and the lodging giant is expanding by adding new brands and opening in new markets to continue its aggressive growth. Based in McLean, Virginia, Hilton has a wide product mix covering multiple brands. Its line of luxury hotels includes two brands, Waldorf Astoria and Conrad. It markets lifestyle hotels under the Canopy by Hilton brand and full-service hotels under four brands: Hilton, Curio Collection by Hilton, Doubletree by Hilton, and Embassy Suites by Hilton. Hilton’s hotel brands with limited services include Hilton Garden Inn, Hampton Inn by Hilton, Homewood Suites by Hilton, Home2 Suites by Hilton, and Tru by Hilton.
Hilton is currently opening the doors to the first of more than two dozen Canopy boutique hotels. These are hotels in locations like Reykjavik, Iceland, and Bethesda, Maryland, where customers can use mobile devices for convenient check-in, then check out the neighborhood using the hotel’s on-site bikes. Canopy hotels have open lobbies to invite lingering, a free gift waiting in every room, and free wine tastings in the evening to
encourage mingling.
Another of Hilton’s newer brands is Tru, a group of more than 100 mid-priced hotels designed with Millennials in mind. Introducing the brand, Hilton’s CEO stated: “We have a very large swath of demand that indexes very young, and we’re not serving it.” The company’s analysis indicates that 40 percent of demand for hotel rooms comes from customers seeking affordable accommodations. Tru is geared to travelers in their twenties
and thirties who want accommodations with a modern design and a reasonable price, plus opportunities to personalize the experience for individual needs.
Each Tru hotel has flexible public-space areas for customers to enjoy as they choose: some may want to play foosball, others may do a bit of work, while still others will relax in easy chairs or get a snack from the “grab and go” eatery. Tru’s guest rooms are smaller than typical U.S. hotel rooms but carefully set up with amenities preferred by the target market, such as free Wi-Fi, 55-inch televisions, and showers rather than bathtubs. Tru will compete in the mid-priced market with rival brands such as Comfort Inn by Choice Hotels and Marriott’s Fairfield Inn & Suites.
Meanwhile, the
boutique hotels and to plant their brands in more cities. Marriott International acquired Starwood Hotels and AccorHotels acquired Fairmont, among other hotel brands. The industry is also feeling competitive pressure from rental services such as Airbnb, which link
owners of apartments, condos, and homes with customers who want to rent for a day or longer.
Rather than buy an existing brand, Hilton is developing its own hotel brands from scratch so it can build in the features and services desired by particular target markets, with appropriate pricing. It is also entering new markets, such as Bolivia and Chad, bringing its total to more than 100 countries. With a portfolio of 13 brands covering hundreds of thousands of rooms worldwide, Hilton is well-positioned to meet the needs of a wide range of customers in a wide range of locations, now and in the future.
Questions for Discussion
1. Which branding strategy is Hilton using? Why is this appropriate for Hilton?
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