Hilton Sets Sights On Hostel Users With New Micro-Hotel Brand

Hilton has just announced the details of their latest hotel brand, called Motto by Hilton.

Why hotel groups create new hotel brands

Before we talk specifically about Motto by Hilton, I think it generally makes sense to talk about why hotel groups start new hotel brands. It’s not necessarily to be able to sell to consumers, but rather to be able to sell to investment companies.

For the most part, the global hotel chains don’t actually own most of their hotels, but rather they just have management or franchise contracts for them. So the reason they create so many new brands is so they have something to pitch to investors.

They try to make each brand seem super-unique, in hopes of luring a company to build a city’s first Aloft rather than a third Sheraton, for example.

That’s why there’s also such little innovation when it comes to new hotel brands. Instead I feel like we just see each of the major hotel brands introduce similar concepts over and over.

The basics of Motto by Hilton

This brings us to Motto by Hilton, which is Hilton’s newest hotel brand. The way Hilton describes it, Motto is a new affordable urban lifestyle brand, but then again, that’s how companies love to describe everything nowadays.

What’s interesting about Motto is that Hilton says that they looked at the emerging lifestyle hostel model globally to understand the opportunity to enhance the shared room concept.

Hilton decided that travelers who stay in hostels don’t actually like rooming with strangers. They want more from their hostel experience but are limited by current options in the market.

So here’s how Hilton describes the primary motivation behind the features of these hotels:

  • Prime Locations: It’s about giving travelers access to the best location – being in the heart of the city and in the most popular neighborhoods. Right neighborhoods make a difference.
  • Authenticity: What does it mean to be “here”? Locality breeds identity, community, and ultimately, a sense of place.
  • Affordability: Competitive rates that open the doors to cities and locations that travelers didn’t think they could afford.
  • Flexibility: One size doesn’t fit all — choice is paramount. Multi-purpose spaces are growing in popularity because of the flexibility they afford.

More specifically, here are the features we can expect from Motto:

  • Guest Rooms: With an average footprint of 163 square feet or 14 square meters, the highly efficient rooms will include space-saving features such as wall-beds, lofted beds, segmented shower and toilet stalls, and multi-functional furniture that can be discreetly stowed when not in use.
  • Linking Rooms: Eliminating the hassle of coordinating travel for larger groups, Motto by Hilton hotels will have the option for guests to book multiple connecting rooms in advance.
  • Split-payments: Motto by Hilton hotels will allow guests to split payments between more than one person at the time of booking, avoiding the sometimes-complicated math exercise during checkout.
  • Connected Room: All Motto by Hilton rooms will be outfitted with Hilton’s Connected Room technology – the first mobile-centric hotel offering that allows guests to control features in their room (i.e., temperature, lighting, TV, window coverings, etc.) from their Hilton Honors mobile app.
  • Curated Sleep Experience: Motto by Hilton hotels will put an emphasis on a premium sleep experience. Whether it is a premium mattress; a Sleep Kit with eye masks, essential oils or vitamin bars; a white noise app; blackout window shades; or sound absorbing materials throughout the room, Motto by Hilton is sleep-obsessed and prioritizes quality sleep for every traveler.

So, what kind of pricing should we expect from Motto? Hilton claims that rates will vary by market, but that each property will offer competitive rates that will make it a viable option for travelers who would otherwise typically stay with friends or family or seek out temporary housing options.

The first Motto will be located in Marylebone, London. Construction will start in January 2019, with a 2020 opening date targeted.

Hilton says that they have deals in various stages for markets like Lima, Dublin, Savannah, San Diego, Boston, and Washington DC.

So it’s possible we’ll see a property open before then, but that’s the first official property under construction.

My take on Motto by Hilton

Generally speaking I feel like the major hotel groups are super uncreative with the new hotel concepts they come up with. For example, Hilton’s last major brand launch was Tru by Hilton, which was just an annoying copy-cat of Aloft, Moxy, etc.

By comparison I actually think this brand is pretty creative. I think the features like being able to split payments and confirm connecting rooms/spaces in advance is a useful concept. Not that these are things that can’t be overcome otherwise, but it shows they’re paying attention.

What I’m still skeptical of is their pricing. Will they really be able to compete with hostel pricing in major cities? They say that’s their market and where they’re getting inspiration from, but I guess how the math will work out there.

Also, while I’m no expert on hostels, isn’t one of the major reasons people stay at hostels because they have some sort of cooking or food prep space, so people can save vs. the cost of eating out?

Nothing in this brand launch suggests this brand will offer that, in which case I think they’re missing out on something major. People staying in hostels aren’t just saving money compared to hotels based on getting cheaper accommodation rates, but they can also save on food and drinks.

Comments

  1. I stay in hostels about 4-5x a year and I never end up using the kitchen. It’s more to meet cool people, talk to travellers, etc.

  2. Wow, a brave move from Hilton. This seems very much like what Ibis Budget hotels or those low budget hotels that you find a lot in France (sorry this is the only country that I find a lot of such 1 star hotels) which are relatively cheap – but also away from the city centre.

    I hope when they mention that it will be priced competitively, it will be approx 30-40 USD per person (and this is already on the expensive side for backpackers) as this is what hostels normally charge in places like London.

    I am curious what Elite benefits they will offer at these properties…I guess it will be only premium internet or free bottled waters…

    Cheers!

  3. Nobody stays at a hostel (the friendly ones not the hostile) so they can cook in a shared kitchen! It’s about the experience of fellow money-conscious travellers who would rather spend the money on experiences eating out going to museums bars etc and paying $15-30 a night. Lodging costs are paramount for anyone staying in a hostel not cooking your own meals!

  4. Some hotels in NYC have extremely minature rooms, such as Yotel, but they still charge rates $200 more than a hostel. I don’t believe that Hilton rates will be competitive with hostels at all, even the hostels with private guestrooms in addition to dorms.

  5. I used to work for Hilton and this concept has been in the works for at least 3 years. They had actually been looking at acquiring a Hostel company, but soon realized that there would be too much work involved to bring it up to standard.
    @Lucky, one thing I do want to correct is that most hotel companies are Franchise. While they all Manage, for most of them over 50% of the hotels, especially limited service i.e Holiday Inn Express, Fairfield Inn, Hilton Garden Inn, are Franchise.

  6. The funny thing about these new “urban lifestyle” brands in the US is that they basically recreate the $49/night Japanese business hotel, but with a $200/night price and no electronic bidet.

  7. Also, while I’m no expert on hostiles,

    No? There are so many in the comments section!

    While people presumably have various reasons to use hostels I imagine the driving factor is generally to be around other backpacks and to get a cheap single-occupancy bed. The ability of a hotel like this to complete on price is going to depend largely on selling the rooms as double occupancy. Even then, in latee cities, it will be hard to hit the hostel price point.

  8. Hostels are cheap because you typically share a room/bathroom in a dorm setting with at least one to several more people. You give up comfort/privacy for really stretching your dollar. Never heard the food reason.

    While I am sure a smaller room footprints lead to cheaper room rates, if you an fit more rooms into the same building, it will never be as competitive as bunking beds dorm style. Still nice to see a little innovation although I am quite skeptical they will ever realize the real marketing spin at a time where a nightly “destination fee” for other portfolio hotels are greater than the room rates they are trying to compete with at some hostels.

  9. Some of the upscale hostel chains don’t have kitchens, such as Generator. I’ve stayed in them in both London and Paris, and I love them, but I much prefer having a kitchen bc eating out in those cities is very expensive. That’s why, in London, I’ll be switching to a much cheaper – and not quite as nice – hostel that has a full kitchen. The YMCA hostel in Bath only has a microwave, but even that allows me to have a nice big bowl of oatmeal in the morning and one of the fabulous microwave dinners that abound in the UK.

    I eat out a couple of times a week, whether I’m staying in AirBnBs or hostels. But I don’t want to have to eat out every meal. When I don’t have access to a kitchen, I try to eat from grocery stores as much as I can. Boiled eggs for breakfast, something hot from the deli for dinner, maybe a sandwich in between. Not nearly as cheap as cooking myself, but still much cheaper than restaurants.

    In fact, when I stay at the YMCA near Columbus Circle in NYC, I eat almost exclusively from the Whole Foods right there. It has a fabulous salad bar and hot food options. Again, not nearly as cheap as cooking myself, but way cheaper than NYC restaurants for sure. Maybe about the same as fast food places.

    I’m older, and socializing is not my main reason for choosing hostels. I only use them in places where hotel rooms and non-shared AirBnBs are too expensive. I prefer them to shared AirBnBs, bc I prefer being alone or being one of a crowd. Being one of just a few ppl in an apartment is just a little too intimate for my comfort and having a kitchen isn’t worth it to me.

    Of course, in places like Asia, it may be possible to eat out as cheaply as in. But even here in Mexico, where I spend most of my time, it would cost at least a little more to do so. The one exception is Mexico City, where the Mexico City Hostel serves such big hot breakfasts that I only need to eat once more each day and super cheap meals are everywhere you look. The fact that their facilities are great – including full kitchens – and their prices the cheapest in town, and the location is right smack in the middle of Centro Historico, all combine to make it my favorite hostel ever. And that’s in spite of the fact that their WiFi is the worst.

    So, unless these hotels are super cheap, I doubt I’ll be staying in any of them. I rarely stay in hotels, anyway, specifically bc I like having kitchens, even a super basic one. For instance, many of the AirBnBs I stay in outside of the US have only a mini fridge, 2 burner cooktop and either a microwave or toaster oven, and I’m fine with that.

  10. The hostels I stayed in while traveling in college were twelve random people to a room in bunk beds. Shared bathrooms, as well. Not certain if this really replicates the hostel experience.

  11. I kinda love this. I’ve spent my fair share of time in hostels, though I’ve generally avoided shared dorms. I still sometimes opt for a hostel, even when o business trips – when you’re a small business, you’re often not happy with dropping $350 for a downtown hotel room (looking at you, Oslo).
    I’ve never really cared about the kitchen or common spaces. When I’m staying at hostel, I usually just need a decent private bed, a shower, a place to charge devices and usable wi-fi. There are many places that offer just this at a fraction of a standard hotel rate. If Hilton can build a consistent chain, I’d be more than happy to stay with them.

  12. I think this isn’t just to compete with hostels, but also with AirBnB; where people just want a clean, safe, personal space. I think there is a market for this (and I might be in that target market), the question is how big, and can they get the price low enough.

    I am surprised that Japan (thinking specifically Tokyo), isn’t on the list. Not sure if that is because of competition, or lack of suitable property.

  13. “Also, while I’m no expert on hostiles…”

    I think you meant “hostels.”

    I am 31 and I choose to stay in hostels during leisure travels, despite being able to afford hotel rooms. My main reason is for meeting like-minded people and interacting with the interesting staff. This concept, while interesting, does not appeal to me given my reason for staying in hostels. Like anything else, hostel living is a lifestyle and when done with experienced veterans, it’s a wonderful way to travel!

  14. if you’re looking for a cheaper/smaller place to stay, stay with another brand. its readily available. millennials dont cook in, their entire existence is eating out. NYC rooms are less than 163 sq/ft so i get see the purpose here. these may be great for cheating on your spouse

  15. After staying at the Moxy Times Square, this sounds a lot like a copy of the Moxy. Room was tiny, but had the essentials. Personally prefer the Freehand over the Moxy in NYC because slightly bigger and with more character, but no MR points.

    Key is that these hotels need to get their rate down to ~$100/night even in the expensive cities of NYC and London. I found that the Moxy was basically the same rate as the Hilton Fashion District, which offered more space (but less cooler).

  16. The new Moxy in Uptown Minneapolis has lofted beds/bunks which I thought was an interesting hostel-type take. Especially in Minneapolis, which is essentially hostel-less (except for one terrible hostel).

    As somebody who loves hostels nearly as much as luxury properties (and stays in both annually), this doesn’t appeal to me as I’d rather a less sterile hostel experience, and save the uniformity for high-end chains.

  17. My first experience in a hostel was 2yrs ago, at SIN and BKK.
    Those two cities have inexpensive food, so I was very happy to not have to use the comunal kitchen.
    Next week I’m going to SCL, MEL and SYD. I’m only staying in hostels because food is very expensive in Australia and I have so much to try there.
    Can’t say that I’m looking forward my stays, but at least I’m pretty excited to eat a lot of seafood and Wagyu.

  18. The key ingredient for hostels is low price. As you and others mentioned, I don’t see this brand being able to offer rooms anywhere near the price of hostels. Is one supposed to meet a stranger(s) in the lobby and then agree to share a room and split the cost?

  19. I am a traveler who usually travels alone and rarely stays anyplace for more than a couple of nights. I have never stayed in a hostel and have no desire to because the three things I value most in a hotel is cleanliness, security, and privacy, all of which I believe hostels are lacking. This concept does interest me. I have stayed at the Yotel in NYC and enjoyed it. It offered everything I needed.

  20. They have said pricing will not be hostel level, it will be somewhere just below Hampton Inn pricing for urban destinations to pull people “up” from hostels. Also, point earning will be limited like the other limited service brands

  21. This is a copy from Hilton of the “better hostel” brand that Freehand and Generator are doing. I actually a much better model is the Michelberger in Berlin: huge common area/bar that is on the go all the time, and rooms ranging from hostel to “band room” (a bunch of beds for a traveling group in a room) to small private rooms a la CitizenM, plus the usual hostel amenities (bikes, cheap beer chits at local bars, no concierge but useful young folks at the desk). You get the conviviality of the hostel + the “cool” location + the potential for peace and quiet and a decent bed.

    Someone will make a ton of money with this type of model…I can’t imagine that Hilton could pull it off.

  22. If this will be a success, they need to offer smaller rooms with single beds (and by that I mean smaller than queen size) and be proactive in trying to connect the guests.

    I travel solo almost all the time and go for hostels quite a bit, because it’s a lot cheaper than hotel rooms. They should take a look at Smart Hotel in Norway. They have really nice single rooms that are 8,3 square meters, which are often relatively cheap, even for solo travelers.

    Another reason I stay in hostels is to meet other travelers, so they need events every day that encourage meeting new people.

    If they do this, then I might have found a new favorite brand.

  23. Some of my best travel memories are staying at hostels in my early 20s. And it definitely wasnt fot the kitchens. Its about meeting people who are like minded and connecting with travellers. This is a good concept, noone *wants* to stay in dorms, but still wants to have the hostel experience.

    I m sorry you never got to experience hostel life.

  24. I’ve lived in hostels for the last 1.5 years. Kitchens are absolutely a necessity in expensive places, like W. Europe, OZ, NZ, but you won’t find them in SE Asia, where great street food is super cheap. I stay in hostels to save money and to meet people. I travel alone and it would be super boring without hostels. No one enjoys sleeping in dorms, but I doubt a hotel can compete on price, not to mention the social aspect.

  25. This won’t compete with hostels, it will just skim off a few people who don’t want to be in a hostel but can’t afford a hotel.

    If you actually want to be in a hostel, then you’ll miss the kitchen and shared areas. It also won’t be able to compete on price.

  26. @Chris – I don’t know who you speak on behalf of, but the average backpacker DOES want a kitchen and doesn’t “use the money they’ve saved on a hotel to eat out”.

    Your description would probably mainly apply to people on short breaks. Depending on the hostel, they generally aren’t the majority.

  27. @Bogan – not sure which hostels you have stayed at but the hostels that I have visited were clean, secure and sufficiently private (in the sense that everyone minds their own business).

    With regards to this article, a very unusual offering by Hilton. Not sure their idea of the targeted individual matches the actual individual.

  28. I have never specifically stayed at a hostel for the kitchen, but the interaction with cool young people (or people my age).

  29. I had many experiences traveling solo and staying at hostels across Europe, Central and South America. This actually would be quite amazing to say the least for solo travelers that are budget conscious but appreciate privacy, cleanliness, and central location.

    There are a few universities in London that rent out dorm rooms in between semesters. The shared kitchen and shower facilities are clean and nice, towels and linen provided. You get your own tiny dorm room with a single bed. When I stayed there, it was slightly more than twice the cost of a shared hostel room that I stayed in the nights prior, but it was at least that much more comfortable.

    Obviously price is going to be a huge deciding factor, but conceptually, I’d be a customer.

  30. Also it looks like kitchen would be a necessity mostly for people who stay in one place long term, are averse to speaking local language, are in expensive cities, and there are no quick alternatives (7/11, Lawsons, etc.) available.

    It would be a great thing to have, though not an absolute necessity for me or other short term tourists, where people have limited time to enjoy the local cuisines.

  31. Yotel called and want their concept back?

    Will probably end up cannibalizing other low end hotel offerings rather than hostels due to the price point this will end up at.

  32. I stayed in hostels the majority if time in my 20s. I can tell you for a fact that they arent going to draw that crowd with this. People stay in hostels for the sense of community a lot of which comes from staying in the dirm. If everyone has their own room which is extra tiny then all this is a lousy hotel. I cant imagine they will match hostel prices. I have used hostel kitchens but its rare and usually done in isolated locales with no viable restaurants around. This idea sounds like a flop.

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