January 22, 2020

Hilton Launches 18th Brand, Tempo, in Upscale Space

Hilton executives believe the company’s newly launched brand, Tempo by Hilton, fills a void in the upscale segment, fitting between its Hilton Garden Inn and Canopy by Hilton brands.

With Hilton’s new upscale brand Tempo by Hilton, executives are gambling there is a segment of travelers willing to pay a premium for a hotel that lets them maintain the “rhythms” of their home life while on the road.

The brand, which is expected to fit between Hilton Garden Inn and Canopy by Hilton in the company’s portfolio, targets a demographic Phil Cordell, global head of new brand development, described as “modern achievers.”

“They travel with frequency for both business and fun,” he said. “They skew younger but are not just millennials, and we think they’ll pay a bit more for something more unique and differently shaded than a typical scalable hotel would be.”

Cordell noted business travel in particular has a tendency to disrupt a person’s sleep and nutritional habits, and the brand was purposefully designed to help travelers avoid that phenomenon.

“It’s not a health hotel, but a lifestyle hotel that meets those need for modern achievers,” he said. “We’re helping them to be their best while they travel.”

To accomplish that goal, the brand takes a unique approach to guestroom design, dedicating 40% of the 310-square-foot rooms to the bathroom and a “get ready zone,” Cordell noted. A desk work area, separate from the sleeping space, is designed to offer guests more of a buffer between those aspects of their stay. In-room entertainment will also include guided “morning and bedtime rituals” created by Arianna Huffington’s Thrive Global.

The hotel also offers “streamlined” food-and-beverage offerings created with input from restaurant planning and development company Blau & Associates, including a lobby bar that will not only emphasize alcoholic drinks but also items such as premium coffees and teas with “various benefit-driven mix-ins” and non-spirited cocktails. In the morning, the hotel will feature a breakfast café and a retail offering for later in the day that will include “juices, flavored waters and healthy bites,” Cordell said.

He noted Tempo properties will be roughly 140 rooms and located in core urban and primary suburban locations in major markets.

He also said the brand, meant to operate in the lifestyle segment, will allow owners opportunities to incorporate some individual flair at each property.

“It won’t be a 100% prototypical room,” Cordell said. “There are a kit of parts there, and the guestrooms are fairly replicable, but the properties can be fairly flexible. While the baseline is about 140 rooms, our New York project is over twice that size.”

What owners want

Much of the thinking behind various aspects of the hotel, with F&B being a particular focus, was to keep operations as streamlined as possible. Cordell described it as an “efficient, select-service-like operating model.”

He said a fully staffed Tempo at the prototypical size would have roughly 30 full-time employees, including housekeeping, front-desk and F&B staff. He also noted the F&B offering includes “nothing complementary at all,” and the café’s “casual breakfast service” can be offered with 2.5 to 3 FTEs.

Even with the streamlined model, Cordell said he is confident the uniqueness and appeal of the brand will be able to achieve a “rate premium that’s a little more than (owners) expect.”

Owners of other Hilton brands, particularly Hilton Garden Inn and Canopy, have been deeply involved in the brand’s development since the beginning and have been supportive of the brand’s more adventurous elements, such as the unique room design, he said.

“Similar to the path we took with Tru (by Hilton) and other brands, from the beginning we engaged with guests but we also engaged with a core group of owners who are active in development and think creatively and strategically,” he said.

He said the design is likely to change going forward as brand officials present a model room to owners at the Americas Lodging Investment Summit later this month and then in Chicago later in the year.

“The design is probably 80% to where it needs to be, so there’s an opportunity to fine-tune there,” he said, noting the company welcomes “real-time direction and input” from its ownership community.

Projected ramp-up

Cordell said the brand is launching with “30 (properties) committed and (an additional 30 deals) in various stages of development.”

Initial locations will include Manhattan, Maui, Dallas, Boston, Atlanta, Los Angeles, Houston, Phoenix, Washington, D.C., and Lexington, Kentucky.

“Within a couple months of this journey, franchisee interest was so strong, that we didn’t have to wait until launch to get things going,” he said. “There are a number of projects with plans in zoning (reviews) and are financed with everything good to go. These are active, real projects.”

He said the first Tempo opening is likely 18 months away, which is slowed in part because of a difficult construction environment. The brand is only new builds or special adaptive reuses, with no plans currently to take conversions from other brands.

The brand also plans to be focused in the U.S., at least initially.

“The model was developed more for in the U.S. than outside it because there is a clear whitespace here,” he said.

Cordell said initial owner feedback leaves him optimistic about the brand’s long-term trajectory.

“Based on the current interest and energy around the brand, I think we can get to more than 500 properties, eventually,” he said.

While Hilton lately has been launching brands at a break-neck pace—with Tempo marking the 18th brand in the company’s portfolio—Cordell said this brand could be the last big splash for a little while.

“There is probably not another big, scalable brand (launch) in the next year or two, but will be more chances to fill niche opportunities,” he said.

Copyright 2019 STR. All rights reserved. From http://www.hotelnewsnow.com. By Sean McCracken.

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