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The economic waters powering the travel sector might be fine for now, but one can\u2019t help but feel the world\u2019s largest hotel companies are moving as quickly as possible to prepare for turbulence.<\/p>\n
On Wednesday, Hilton kicked off the hotel earnings reporting cycle by citing a $209 million first-quarter profit and better-than-expected data showing travel demand outperformed pre-pandemic levels in many segments. Those hoping for economic uncertainty-fueled bargains are out of luck, as hotel rates at Hilton were 11% higher than 2019 levels for the first three months of the year.<\/p>\n
But Hilton isn\u2019t keeping its eye off the more affordable end of the hotel sector.<\/p>\n
Hilton\u2019s CEO Christopher Nassetta indicated during an investor call Wednesday morning that a \u201cvery low end of the midscale\u201d extended-stay brand is in the works at the company and will be officially announced within the next two months. This comes months after the company debuted Spark<\/a>, an economy brand targeting the premium end of budget travel.<\/p>\n \u201cMy history of living through the Great Recession is that it’s your lower cost-to-build products that have been very high margin because people make the most money doing it and they’re the lowest risk and they’re the easiest finance. … Those are the ones that get going the fastest,\u201d Nassetta said of the extended-stay brand that has yet to be publicly named.<\/p>\n This new brand-teasing arrived a week after Hyatt announced a new extended-stay brand, Hyatt Studios<\/a>. Hyatt leaders indicated that they were targeting the \u201cupper-midscale\u201d segment (competitors here include Hilton\u2019s Hampton brand) with Hyatt Studios. Nassetta noted the new brand would park below Home 2 Suites in the overall Hilton food chain.<\/p>\n