Many luxury hotels make for world-class vacation destinations because of their plush amenities.
They often offer premium dining, lavish rooms and gorgeous settings in prime locations.
Related: Walmart makes a major store closure announcement
Hilton (HLT) -) owns some of these lush properties. They include, for example, the Waldorf Astoria hotels in Beverly Hills, Calif., in Amsterdam and on the Hawaiian island of Maui.
Hilton also owns several upscale, but not quite luxury, brands such as DoubleTree and Embassy Suites.
But now the hospitality company is looking to also serve guests who are focused on value more than decadence.
In fact, Hilton held the grand opening of its first new economy-style hotel in Mystic, Conn. on Oct. 10.
Image source: Hilton Hotels
Spark by Hilton is a new 'premium economy' option
The newest addition to its brands, Spark by Hilton got a moment in the spotlight.
"The introduction of Spark by Hilton fills an open space in the industry by creating a new premium economy lodging option to meet the needs of even more guests and owners seeking value, quality and consistency," Hilton said in a statement.
Cameron Sperance of The Points Guy reported on the grand opening Oct. 11.
"The way we look at this brand is through customer segmentation. The economy segment has a distinct customer side, and we didn't have a product," said Matthew Schuyler, Hilton's chief brand officer, according to Sperance.
The new move should attract more travelers to the company's Hilton Honors network.
"Travelers win out because Spark means there's a more affordably priced entry point into the Hilton Honors ecosystem," Sperance wrote. "While rates this week at the Mystic hotel range from $142 to $223 per night, more advance bookings show nightly rates typically hovering around $100 per night. Next summer, rates are generally under $200 per night — a decent bargain for a Hilton-affiliated hotel in a seaside New England town during the peak travel season."
The new brand is building aggressively
The Spark hotels are expected to grow fast. In January, when Hilton announced the new brand, it said it had more than 100 conversations about deals in the works.
"Today, that number is 400. Further, there are already more than 100 hotels where there are 'hammers in the wall,'" said Alissa Klees, Spark brand leader, according to The Points Guy.
Hilton expects Spark to play an important role in the company's future.
"Hilton wins out here because Spark is expected to become a leading growth driver for the company at a time when higher interest rates mean not a ton of new hotels are getting built," Sperance wrote. "Instead, companies look to conversions — deals where an existing hotel changes affiliation to a new brand — to drive growth. Spark is a conversion brand, and it is expected to grow fast."
Chris Nassetta, Hilton president and CEO, commented on the Spark debut.
"Hilton has pioneered the hospitality industry as we know it today, and we continue to grow our portfolio as our guests' and owners' needs evolve," he said in a January statement. "The debut of Spark by Hilton builds on that legacy of developing world-class brands as we work to serve any guest, for any trip occasion, anywhere in the world."
Get exclusive access to portfolio managers and their proven investing strategies with Real Money Pro. Get started now.
