This year Hilton Worldwide’s Embassy Suites Hotels brand is celebrating its 30th year in operation after the first Embassy Suites property opened in Overland Park, Kansas, in 1984.
At the Hunter Hotel Conference, held last month in Atlanta, HOTELS spoke with Alan Roberts, Hilton’s newly appointed vice president brand performance support – Embassy Suites Brand, to learn more about the brand’s plans moving forward and the rollout of Design Option III, a design prototype first announced in 2009 that marked a departure from the brand’s previous design.
HOTELS: How is the Embassy Suites brand currently performing?
Alan Roberts: The biggest challenge for us is to drive for more rate. Growth is in occupancy, not rate.
HOTELS: Why has rate lagged?
Roberts: That is not unusual for Embassy Suites, as the brand has often ran a counter-cyclical rate strategy. When the periods of recession hit, the brand’s RevPAR placement would increase as competitors cut rate, but during periods of growth the brand’s rate growth has lagged behind. As they grow rate, we should grow rate with them. In some cases now the brand is not keeping pace with this, although the occupancy is there to do so.
HOTELS: Do you have any concerns about new supply, given all the dual-branded extended-stay properties that have been announced lately?
Roberts: The Embassy brand has always been a category unto itself. There are no other upper upscale model that fall in the rate category we do and that offers the amenities we offer. Marriott International’s Marriott Hotels brand is really the biggest competitor we have out there. While there’s a lot of dual-branded stuff going on, we’re not seeing as much of that with Embassy Suites.
HOTELS: Who is the target customer of Embassy Suites?
Roberts: We do a healthy piece of the international business traveler business and we appeal to the leisure traveler, specifically the mom who travels with her children on the weekend.
HOTELS: How is the brand’s pipeline looking?
Roberts: There are 26 hotels in the pipeline, located in the U.S. and Caribbean. These are mostly franchise deals for new-builds and Design Option III is easily adaptable to the markets we are targeting. Also owners appreciate that the staffing model is not the same as a full-service hotel. You see returns for an Embassy Suites like the returns you see for a Homewood Suites by Hilton-branded hotel.
HOTELS: How has the Design Option III rollout progressed?
Roberts: All new Embassy Suites Hotels being built right now are the Design Option III prototype, which has the brand’s signature atrium located on the front of the hotel with the rooms-tower attached.