Hampton’s evolution from economy to an industry leader
 
Hampton’s evolution from economy to an industry leader
14 JUNE 2018 9:15 AM

Hampton by Hilton has come a long way since 1984, when it started as an economy brand under the Holiday Corporation. In this brand history, executives and owners talk about how Hampton’s growth has influenced the industry.

Update 19 June 2018: This story has been updated to include Hilton’s development numbers as of today.

REPORT FROM THE U.S.—Nearly 35 years ago, when Phil Cordell was in line to be GM of the second-ever Hampton Inn, he was a little skeptical when he learned it would be an economy hotel.

He was worried it would be “kind of a truck-stop hotel or one I didn’t want to be affiliated with,” he said.

However, once the properties started opening and Cordell got to know his hotel in Spartanburg, South Carolina, he realized the company was on to something.

“That first one in Memphis that opened ran 100% occupancy for the first seven months,” said Cordell, who is now global head of new brand development for Hilton. “It was full every night for seven months. That helped override any potential concerns about a new brand. To see it perform that well instilled some confidence. I wanted to be part of that.”

The brand has gone through different changes over the years, including expanding into Hampton Inn & Suites, and now has more than 2,345 properties around the world and more than 610 in its 2018 development pipeline.

How it started

Hilton as everyone knows it today is the result of two companies that came together in recent years, Cordell said, and looking back through its family tree shows how Hampton Inn began as part of the Holiday Corporation in the early 1980s.

About 18 months after it had debuted its Holiday Inn brand, the Holiday Corporation launched Hampton Inn to keep guests who didn’t want to stay at a Holiday Inn within an overarching brand family, Cordell said.

Cordell had been working for Holiday Inn when a recruiter called him about becoming a GM for the upcoming launch of Hampton Inn. When he interviewed, the first Hampton had yet to open. A group of employees were hired at the time without any property assignments, he said, so they didn’t know where they would end up.

The first Hampton Inn opened in Memphis, Tennessee, in 1984, and it was postured as an economy brand, Cordell said. The rooms were small, only about 225 square feet, which Cordell said made it one of the first micro hotels. High-speed internet didn’t exist yet; the brand offered a complimentary breakfast of coffee, a donut and a Danish.

“It did incredibly well,” he said.

The economy segment at the time didn’t have a clear leader, Cordell said, and the Hampton Inn brand was a differentiator in the segment. The company went on to open 10 more Hampton Inns over a two-year period, and its growth accelerated after that, primarily focused in the Southeast U.S. Because the returns on profitability were high and the brand was popular with guests, it gained traction with franchisees, he said.

Following the sale of the Holiday Inn brand to Bass, the Holiday Corporation reorganized itself into the Promus Hotel Corporation, under which Hampton became its flagship brand alongside Embassy Suites and Homewood Suites.

Introducing its 100% Satisfaction Guarantee in 1989, Hampton Inn stood apart from other brands because no other hotel company or brand offered such a guarantee to guests, Cordell said. The guarantee told guests that if they weren’t satisfied, they didn’t have to pay.

“As you go down the timeline, one thing Hampton has always been about is evolution versus revolution,” he said. “Some brands, in or outside of the hotel space, don’t start to recognize the impetus for change until it’s too late. Hampton tried to stay ahead of the curve.”

Over the years, Hampton continued to grow and evolve. Hampton Inn & Suites launched in the early 1990s, and 2004 was a particularly big year for the brand, Cordell said. By this time, Hilton owned the brand and had moved it into the midscale segment. The brand launched “Make It Hampton,” which included 127 feature product changes at every property.

“They’re things that today seem minor, but at the time they were major,” he said. The changes included a curved shower rod, inventing and patenting an easy-to-set alarm clock, and offering free high-speed internet access in each room.

Cordell said each of the brand’s milestones was a quantum leap, and within a one- to two-year period, other competing brands implemented similar changes.

“The new evolution became the brand standard,” he said.

Cordell led the team that took Hampton to China. Competitors had some missteps in the country, he said, but Hampton found a local partner, Plateno Hotels Group, that was active and engaging local brands in China. It worked out a master license holder agreement, and the team developed a physical product and modified it for Chinese markets. The first Hampton in China opened in 2016. Overall the initiative was a success, he said.

“They embraced it in ways it was never embraced in the U.S.,” he said.

The brand today
There are currently more than 2,345 Hampton by Hilton properties with more than 238,000 rooms in 21 countries and territories across the world, and there are more to come, said Shruti Buckley, SVP and global head of Hampton by Hilton.

Despite being nearly 35 years old, the brand currently has the largest pipeline in its history, with more than 580 planned hotels, 325 of which are in the U.S., Buckley said. Hampton also has properties in Latin America, Europe, the Middle East and the Asia/Pacific region.

China is one of the brand’s fastest-growing markets, with more than 200 signed deals, Buckley said. Hampton now has the fastest-growing international hospitality pipeline in China, she said. The country has a strong economy and a growing and dynamic population that is looking for international mid-tier hotels with quality experiences and products for business or leisure travel, she said.

The brand also is rapidly growing in Europe, she said, particularly in Eastern and Western Europe. The brand will debut in the Middle East with a property in Dubai, United Arab Emirates, toward the end of summer.

Hampton currently commands a 20% revenue-per-available-room premium over competitors in its segment, making it a big opportunity for developers in many markets, Buckley said.

Adding to the brand’s success is its strong commitment to evolve the guest experience, she said.

“We have our eye on what consumers are looking for, how they travel and how they look at the hotel experience,” she said. “We’re evolving to meet their needs, to win the hearts and minds of travelers.”

The “Hamptonality” campaign has been one of the core elements of Hampton’s success, Buckley said. It’s a commitment for every member around the world to deliver a great guest experience. The 100% Satisfaction Guarantee is a commitment by key members and owners to live up to that promise, she said.

“Hampton has a great legacy of being an innovator,” she said. “We will continue to set the bar in the upper-midscale segment.”

Hilton unveiled its new Hampton Inn prototype in May, including new design for the brand’s exterior, guestrooms and public spaces.

“It’s been over 10 years since it made any material changes,” Buckley said. “The competitive environment is changing and evolving.”

The new design is more efficient, saving more than 2,000 square feet while still improving the guest experience, she said.

The brand is still No. 1 in guest preference and experience, she said, and because it is known for innovation and being proactive, this felt like the right time to move forward.

Owners’ experiences
Sage Hospitality Group* is the owner of Hampton’s first full new prototype build in Middleburg, Florida. Sage Hospitality Managing Member Gary Patel said he felt Hampton by Hilton was a perfect fit for his company’s portfolio. The Middleburg hotel is the company’s first Hampton property.

The brand correlates with high guest satisfaction levels, he said, which translates into higher average daily rate and solid occupancy levels.

“Hampton has a track record of strong performance, and we saw an opportunity to add the brand to the portfolio,” he said.

The Cherry Cove Group has been working with the Hampton brand since November 1997, President and CEO Brian Norris said. The company has owned three Hampton properties over the years, currently has one in its portfolio and is an early adopter of the new prototype, he said.

The company acquired its first Hampton after it sold one of its independent properties and needed to replace it with a brand that had better brand name recognition and a better reservation system, he said. The brand comes with strength and consistency and is a leader in the market, he added.

“I don’t feel there is any other brand that has the market presence of Hampton, and with the new prototype I feel Hampton is in the right place for the future,” Norris said.

MCR Development has 12 Hampton properties now and previously sold off two additional properties, SVP of Acquisitions & Development Russ Shattan said. The company recently received a Top Performer award from Hilton for its ownership of Hampton properties under the large portfolio category.

The brand is one of the best in the business, has a giant distribution network and is effectively in every major, secondary and tertiary market, Shattan said.

“We’d love to own 100 more of them,” he said. “We have a strong preference for Hampton. It’s a category killer and industry leader.”

When Hampton introduced Hampton Inn & Suites, the new design and amenities helped to elevate the brand and provide for future growth, Shattan said. It also raised the game for the core product.

The brand’s migration from suburban to urban markets has been another hallmark of its success, Shattan said. MCR’s Hampton Inn Baltimore Downtown Convention Center is near Camden Yards, the convention center and medical center, and despite being select-service, stands out among guests in a market with plenty of full-service hotels, he said.

“It’s just a high value proposition to the traveling customer,” he said. “It has a giant distribution network. You can find them everywhere, and everywhere you find them, they’re a great value.”

*Correction 14 June 2018: The story has been updated to correct the name of the hotel company.

1 Comment

  • James A Ostrowski June 18, 2018 3:00 PM Reply

    Nice to hear from you again Phil, Sounds like you had a great career with Hampton. The days with Craig and George Schultz are long gone but not forgotten. You did a great job then, and I congratulate you.

    Jim Ostrowski

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