Hilton Worldwide has launched Tru, a new budget brand targeting younger guests. Accommodations, priced from $75- $90 per night, are designed to compete with economy and midscale brands such as Comfort Inn, Fairfield Inn and La Quinta. It will join other limited service brands in the Hilton portfolio such as Hilton Garden Inn, Hampton Inn, Homewood Suites and Home2 Suites.

Hilton Worldwide has more than 4,500 hotels globally. CEO Chris Nassetta says that although 40 percent of hotel demand is in the lower price bracket, many economy and midscale chains offer an “inconsistent product and service delivery,” giving Hilton a unique market opportunity.

Most Tru properties will be new construction or urban conversions of historic banks or office buildings. Currently 102 properties are planned, with 30 more in negotiation. The hotels will be located in urban, airport and suburban markets, including Atlanta; Dallas; Houston; Chicago; Denver; Portland, Oregon; Charlotte, North Carolina; San Antonio, Texas; and Nashville, Tennessee. They will typically feature 98 guest rooms and sit on 1.5 acres of land. In contrast, Hilton’s Hampton Inn brand typically has 130 guest rooms and occupies 2 acres of land. Tru guest rooms will feature open spaces with hangers and hooks on the wall instead of closets, no desks and platform beds without box springs.

Lower End Market is Growing

Hotel data benchmarking firm STR Global points out that although upscale luxury chain hotels have high occupancy rates, their growth is flat. Over the past year, they are experiencing a less than one percent increase in occupancy and less than 5 percent growth in revenue per available room. In contrast, midscale and economy chains are growing at a rate of 2 and more than 6 percent, respectively.