Hilton's extended stay brands target Canada

George Sell George Sell Uploaded 07 May 2019

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Canada: Canada’s strong, stable economy and booming tourism sector has prompted Hilton to expand its extended stay offering there.

Hilton recently opened a twin-tower, dual-branded Homewood Suites and Hilton Garden Inn in Ottawa and has a similar project under development in Montreal. Under its All Suites flags  it has six extended stay developments in its short-term pipeline.

"The combination of Hilton Garden Inn and Homewood Suites, both in the States and in Canada, makes perfect sense because it appeals to a different client base," said Rick Colling, global head of Homewood Suites by Hilton. "Homewood Suites is a real niche brand, primarily driven by extended-stay offering all the luxuries of home-style living. When you marry that with a Hilton Garden Inn, which primarily drives group business and transient business, the two make a tremendous combination."

The two Ottawa hotels, owned and operated by Morguard Corp. (MRC-T) sit at the western edge of the downtown a few blocks from Parliament Hill and a burgeoning tech sector. The CAN$50 million project involved the conversion of a former Delta hotel and apartment tower into the two new Hiltons.

"The end result is absolutely spectacular," Colling said. "We could not be happier with the end result; it's a flagship property for both Hilton Garden Inn and Homewood."

The two towers offer a total of 346 rooms, split almost evenly between the two brands.

Colling said having one staff with the ability to offer two distinct types of accommodation is a major boost to a property's bottom line - especially in a market such as Ottawa with its mix of public and private sector weekday clients, and leisure visitors.

"They are tremendously appealing to a cross-section of clients who will elevate occupancy levels seven days a week," he said. "It's kind of a changing of the guard to some degree on a Friday. You'll have some extended-stay folks check out and of course you'll have the leisure folks check in. It's a really nice complement on how we can deliver occupancy levels that are really conducive to the return on the investment."

Canada had its best-ever year for tourism in 2018, with more than 21 million international visitors. This includes, significantly, a record 6.7 million from outside North America - visitors who tend to stay longer and spend more per trip than visitors from the U.S.

"We will be putting the same combination of hotels in Montreal midtown, which will open in 2020," Colling said. "A Homewood Suites and Hilton Garden Inn in Montreal midtown, which is a perfect combination of assets in settings that make such good sense for us for visibility sake."

Construction on the two Montreal hotels is to begin later this year as part of Phase III of the Westbury development by Devmont. Westbury is a mixed-use project which will include four towers, about 550 residential units, office and commercial space and other amenities when fully built out in 2022.

The 290-room Garden Inn/Homewood Suites will include conference rooms and a 5,000-square-foot, multi-purpose ballroom.

"I think it would almost be a carbon copy of what we've done here in Ottawa," Colling said. "Any time we can get major visibility in a market like that, it complements the brand."

Hilton's immediate pipeline also includes secondary markets such as Ajax outside Toronto, and Thunder Bay in Northern Ontario (soon to be sites of Home2 Suites hotels)

However it is yet to open a property in Vancouver. Adrian Kurre, global head of Home2 Suites by Hilton, said: "It's a spectacular location, it's just a high-barrier-to-entry market. It's hard to get in there. It's hard to make the cost-to-profitability ratio hit. It's a really hot market for the Asian traveller. The challenging part for the development group is finding a piece of land that makes sense, that you can actually make return on investment. So it's been a long slow haul to try to get new hotels into that market."

Hilton's announcements come shortly after Marriott opened the world's biggest Residence Innin Calgary.

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