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Hilton Considering New Chain of "Hostel-Like" Hotels for Millennials

March 9, 2016

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Rupert Neate, The Guardian, March 9, 2016

Staying at the Hilton has, arguably, already lost a bit of its cache. The 97-year-old company last year sold the flagship New York Waldorf Astoria to the Chinese for $2bn, and is now considering launching a new chain of budget “hostel-like” hotels marketed at millennials.

Related: Pets, debts and e-cigarettes: how millennials spend their pay cheques

Hilton’s chief executive Chris Nassetta said the new chain would offer younger customers “urban flair” and stripped-back services for lower prices. It comes as global hotel chains scramble to attract younger customers, many of whom have ditched traditional hotels for Airbnb and other online accommodation services.

“There’s potential for something that has more of an urban flair, more of a micro-hotel,” Nassetta said in an interview with Bloomberg at the International Hotel Investment Forum in Berlin. “We haven’t made a decision to do anything in that space, but it’s certainly one of the things we’ve been exploring.”

Hilton’s rival Marriott has already teamed up with Ikea to launch Moxy Hotel, a budget chain offering young people “contemporary stylish design, approachable service, and, most importantly, an affordable price.”

The first US Moxy, which launched in Europe in 2013, will open in downtown New Orleans in April, before expanding to New York, San Francisco, Seattle, Chicago, and Nashville.

Hilton, which with 747,000 rooms is the world’s largest hotel company, has long been moving away from its high-end roots towards the cheaper mass market. In January, the company, which already operates the budget chains Hilton Garden Inn, Hampton Inn, and Homewood Suites, launched even more budget chain Tru. The rooms will cost $90 to $100 a night, but guests shouldn’t expect a box spring bed.

“You go in a lot of the competition and it’s like Russian roulette,” Nassetta said when he launched the Tru chain. “There’s really nobody doing it well at this price point.”

Nassetta knows that millennials don’t have as much disposable income as their parents, but his plan is to “get them loyal to our system, and trade up as they move on in their lives.”

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This article was written by Rupert Neate in New York from The Guardian and was legally licensed through the NewsCred publisher network.


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