Hilton’s all-suites leaders incorporate changes in food and beverage into refresh programs as brands reach various stages of maturation.
ATLANTA—Hilton’s all-suites brands are using food-and-beverage programs to feed their systemwide refreshes as they look to boost future growth.
While the brands’ ages are wide-ranging—Home2 Suites by Hilton is 9 years old, Homewood Suites by Hilton is 29 years old and Embassy Suites by Hilton is 34 years old—each must evolve to continue meeting needs of owners and customers, according to brand leaders.
“Things have changed a little bit in travelers’ preferences, and that’s what launched us into taking a look at how we do food and beverage,” said Alan Roberts, global head of Embassy Suites by Hilton.
Continuing to evolve F&B offerings as part of overall brand updates is important in the battle for guests with alternative-accommodations platforms such as Airbnb, said Adrian Kurre, global head of Homewood Suites and Home2 Suites.
Adrian Kurre, Hilton
“We can deliver a differentiating experience because we have F&B and for the most part they don’t,” Kurre said. “We have to make sure that our team members are absolutely, spectacularly turned on to deliver that light and warmth of hospitality. And that’s a great area to do it. It’s a great differentiator between hotels and some of the disruptors that are out there.”
Roberts said the renewed and deeper focus on F&B in the hotel industry is driven by how people live.
“These things have changed the world; phones have changed the world,” Roberts said while waving his cell phone in his hand. “They’ve shrunk our attention spans; they’ve made us permanently and forever mobile. … Diners want the speed and kind of ease that you get with that, but they want a healthier choice. We can leverage that as hoteliers; we can benefit from that because of our service model.”
The service model can be the driving force of differentiation, according to Kurre.
“If we do a spectacular job of the delivery of hot foods served hot, cold foods served cold, served by a person with a smile on their face and a song in their heart, and we deliver the light and warmth of hospitality, we recognize our frequency members that are there, and we do all the things right, that’s a differentiating moment,” Kurre said.
Embassy Suites’ renewal
Embassy Suites’ brand-wide atrium refresh program will continue until 2020—and it will now incorporate the F&B refresh, Roberts said.
“We’ll begin to see the volume of those renovations fall off enough that we’re falling to what I would call at that point kind of a regular renovation cycle for the brand,” Roberts said. “Right now, we have still more than 40% of our hotels have active (property-improvement plans) going on with them, so it’s a heavy amount of work still going.”
Alan Roberts, Hilton
The timing of the atrium refresh is due to property age as well as the license-agreement cycle, Roberts said. License agreements for Embassy Suites, which was launched in 1984, typically run for 20 years. After a steady ramp-up period, the bulk of the portfolio was developed beginning in the mid-1990s.
“By 2014, 30 years later, a big bulk of those early hotels that were being built were coming to the end of that 20-year license agreement, and that’s what’s carrying us through this four or five years we’re in right now,” Roberts said.
The excellent markets in which the original “strong boxes” were built remain intact today, so owners who want to retain the flag have reinvested in part through the atrium refresh, Roberts said. Part of the process is envisioning the next 30 years for the brand, which led to the F&B refresh.
Up to 50% of Embassy Suites guests utilize its complimentary breakfast or its complimentary evening reception, according to Roberts. Reinventing the offerings at the evening reception is an important part of that process because guests want a more casual style of food than they did in the past.
For owners, the F&B refresh will provide opportunities to add another revenue stream, Roberts said.
“We entice (guests) in with the complimentary evening reception and the snacks and the beverages, then we give our owners now the opportunity to upsell to a premium beverage program,” he said, adding that the philosophy provides guests with more options and owners with more revenue-generating opportunities. “It is for an additional cost, but it’s still at a considerable savings compared to what you would get at a restaurant where you go in and order.”
The same is true for alcoholic beverages, Roberts said.
“If you want the Bud Light, here it is, but if you want to upgrade to the Goose Island IPA, you can do that for a nominal charge—making sure that it is a small charge for the premium program,” he said.
Roberts said the brands within Hilton’s all-suites division are on a journey to get to the same point of customer and owner satisfaction. For Embassy Suites, that means a continuing evolution.
“This is a brand that wasn’t there just three or four years ago; it was a lot different in complexion,” Roberts said. “We’re changing the existing the footprint of the brand, we’re reformatting, reviewing, redoing how the food-and-beverage programming works to give the owners and operators the ability to deliver a better food-and-beverage experience, and oh, by the way, make a little bit of money while they’re doing it. It’s not just a cost center anymore — it becomes a revenue possibility.”
Embassy Suites has 235 hotels open and 50 projects in the pipeline.
Homewood Suites follows similar path
Homewood is in the same position as Embassy on the refresh program, according to Kurre. Seventy hotels were refreshed last year, 70 more will be refreshed this year and the brand will refresh 70 more hotels in 2019.
“By the time we hit our 30th anniversary at the end of 2019, the majority of hotels in the system will either be refreshed or less than 6 years old,” he said. “We’re taking good boxes in good locations and making sure that they are up-to-date with where they need to be.”
Homewood’s F&B upgrade also ties into the renovation program, Kurre said. It specifically involves the complimentary breakfast and evening reception.
“The original intent of the evening reception was to give the general manager and the director of sales an opportunity to know who was in their hotel and identify where they are staying next and where are their friends staying and how do they get them to stay at their hotel,” he said. “It morphed into a full-fledged dinner. Anytime you give the guest something free they want, a year later they want something more and something better for free, and we as an industry haven’t necessarily disciplined ourselves to say, ‘Let’s make sure that there’s a return on that investment.’”
The result for Homewood Suites is to get out of the dinner business and back into a beer, wine and appetizer offering, and take Embassy Suites’ lead in the paid-upgrade area, according to Kurre.
“We’re testing right now for how can we do something very similar to what Alan has described,” he said. “One of the advantages of the all-suites division is we can look at what’s been successful and what can we learn from within this group to say can we morph this some way to help us return on the investment in Homewood.”
Homewood Suites has 435 hotels open and 171 in the pipeline, Kurre said.
First refresh, improved breakfast flow for Home2 Suites
Home2 Suites, which was launched in January 2009, is entering the refresh cycle for its first wave of hotels.
“Owners are extremely happy that the physical product that we put together is not showing horrible wear and tear,” Kurre said.
Things such as upgrading the color palette, replacing wallpaper and paint and replacing parts on chairs are at the core of the refresh, Kurre said.
The Home2 Suites brand provides complimentary breakfast but does not provide an evening reception—and Kurre has no intention of launching one.
“With Home2, I want to focus on driving higher guest satisfaction at a lower cost at breakfast—isn’t that always everybody’s dream?” he said. “We’ve got a couple of pinch points in (the breakfast area) … if you’re cooking something in the microwave, if you’re making a waffle, that whole process could take you seven minutes to get through it, and the meantime someone else is waiting behind you, which is causing a dissatisfaction. It’s our lowest-rated attribute for Home2, but it’s also one of the highest — other than Embassy — it’s the highest-rated complimentary breakfast in the system.”
The company is watching the evolution of breakfast at its Tru brand and plans to adopt variations of some of the successful components there to Home2 Suites, Kurre said.
“We understand that 45%, 46% of our business is extended-stay, so we have to make sure we give the product that’s right for the extended-stay guest, but try to drive the cost of that down with the satisfaction going up,” Kurre said. “We’re pretty sure we know why owners build a hotel, and we think it’s to make money, and we want to have them make more money with us than our competitors do.”
Home2 Suites has 158 properties open and 280 in the pipeline, Kurre said.