Hilton: Disrupting the Midscale Segment in 'Tru' Fashion
By Talene Staab Vice President & Global Head, Tru By Hilton, Hilton | March 15, 2020
This article was co-authored by Mitch Patel, President & CEO, Vision Hospitality Group
The midscale hospitality space is an enticing one for hotel brands and developers. At the inception of the Tru brand, Hilton's internal research showed that approximately 40 percent of total U.S. hotel stays were in the midscale and economy segments. What's more, the midscale category was poised for disruption. The existing supply was 26 years old on average, resulting in an inconsistent guest experience that needed to be updated.
The opportunity was there to develop a brand to reach this wide audience. But in order to launch a new brand with all new build hotels in a competitive category where value is king, a different approach by the Hilton team was required.
The launch of Tru by Hilton is an example of how innovative ways of thinking driven by insights and collaboration can disrupt a category and drive unprecedented growth. The brand has established itself as the premier midscale brand with over 100 hotels open in less than two and a half years since the first property opened. Tru has a $109 ADR and a REVPAR index of 130 (over $77), the highest brand premium in the industry.
Despite a number of brands in the midscale category, Hilton identified an unmet need in the marketplace for both consumers and owners. With consumers, Hilton uncovered a group of underserved travelers who didn't want to compromise quality or design for a value-oriented hotel experience. From an owner perspective, Hilton recognized the need for a brand that was compelling for everyone – those new to the industry, new to Hilton, or existing owners seeking further diversification in their portfolio.