Hilton All Suites Hits 1,000 Properties
With the U.S. stock market tumbling, along with softening auto sales, home building and consumer confidence, you’d be forgiven for assuming times are tightening in the hospitality market, but so far that isn’t the case. As the hotel industry continues an unprecedented growth streak, Hilton’s All Suites brands—Embassy Suites, Homewood Suites, Home2 Suites—hit the milestone of 1,000 open properties.
Homewood Suites leads the way in the All Suites group with more than 470 properties open. Embassy Suites by Hilton has 251 open locations, and the young Home2 Suites brand now has more than 255 locations.
Hilton’s executives overseeing the All Suites portfolio stressed they still have major growth in the pipeline with new locations coming soon in urban and “suburban-urban” locations, hip neighborhoods outside city centers, as well as coastal vacation destinations.
Matt Wehling, Hilton’s senior vice president of U.S. and Canadian development, said multi-branded properties continue to be especially attractive to its franchisee base, which has proven itself in a variety of market segments.
“The growth of the All Suites brands has really been market agnostic,” he said. “We certainly haven’t built every market out, so we’ll be looking to analyze in depth each of the markets where we currently have our pipeline and see if we can do appropriate infill going forward.”
As many neighborhoods near city centers have gentrified, redeveloped and added additional traveler amenities, Wehling stressed that such areas are a particular focus for Hilton. “The fact that the amenities that are available in many of these neighborhoods are such that they’re attractive for hotel guests is exactly what’s sparking this growth,” he said, adding smaller submarkets often don't have the ability to support competing brands, which magnifies the benefits for jumping into a hot neighborhood before a competitor does.
Most city centers are still seeing significant hotel room growth, and Hilton’s All Suites portfolio added several urban properties in the past year, ranging from New York City to Las Vegas and Seattle’s Pioneer Square.
With talk of a coming recession heating up, Global Head of All Suites Dianna Vaughan underscored Wehling’s sentiments, adding that when the economy gets tight its brands tend to do better, with business travelers bringing spouses along also fueling the growth of Embassy Suites.
“We approved over 29,000 new rooms for development in Q3  alone this year,” Wehling said. “I think there are some signs of slowdown already, which quite honestly, I think is healthy.”
Compared to previous development cycles, he said that lenders and developers have been quicker to slow down the investment faucet so there isn’t as much over-building as previous growth phases, most notably in the years leading up to the Great Recession. He stressed that part of this cycle’s caution includes staying in close contact with existing Hilton franchisees.
“We do about 75 percent of our business with existing partners, so we keep the lines of communication very open and really enjoy a good back and forth dialogue with them,” he added. “There are some partners that will be a little more aggressive than others, but overall our focus isn’t to build rooms for the sake of building rooms, it’s to truly hit niches and markets.”
Asked where they would add one new hotel if they could, Wehling named Austin, Texas, which is now the fastest-growing city in the country at 4.7 percent during the first half of 2018. Vaughan was a little more adventurous, saying she sees tremendous opportunity in Hawaii and wouldn’t mind dropping by to keep tabs and hit the beach.
Hilton’s 1,000th All Suites property is a Homewood Suites in Pleasant Hill, California, less than a 20-minute drive northeast of Oakland.