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[IMGCAP(1)]SAN DIEGO-Hilton Hotels Corp. has launched its tenth franchise flag, a mid-tier extended-stay brand to be called Home2 Suites by Hilton. The announcement was made today during the Americas Lodging Investment Summit, held here.

Phil Cordell, global head of focused service brands for Hilton, said the concept had been in the works for about a year and that extensive research on the product was done with current Hilton franchisees and consumers. Despite the economic downturn, Cordell said the time is right to introduce this new brand. “Even in challenging times, extended-stay is the most resilient” hotel type, he said.

The Home2 chain is positioned a notch below in pricing and service offerings from Hilton’s current extended-stay product, Homewood Suites. Average daily rates for a Homewood Suites are $120 a night, while a Home2 pricing is projected to come in at $90.

Bill Duncan, senior vice president of brand management for both Home2 and Homewood Suites, said that the two brands are meant to complement each other. The more upscale Homewood Suites targets extended stays of five to 12 nights, while Home2 will draw in guests for 10 nights or more.

The latest Hilton flag was designed to be efficient and cost effective to build and operate, said William B. Fortier, Hilton’s senior vice president of development for the Americas. A Home2 can be built on less than two acres at a cost of $75,000 a key, excluding land. The prototype calls for 108 rooms in four-story building made of stick construction. About 80% of the rooms will be studios, with the remainder one-bedroom suites.Hilton will roll out its newest chain in the US, and then expand into Canada and Mexico. At the press conference announcing the Home2 Suites brand, three owners signed contracts to build Hilton’s latest brand. Those include sites in Baltimore/White Marsh, MD; San Antonio; Birmingham, AL; and Manhattan.

Although the property in Manhattan is an adaptive reuse of an apartment building, Home2 Suites will be all-new construction, Fortier said. Hilton is not putting any of its own funds into the development of Home2 Suites. He expects the first hotels to carry the Home2 Suites flag will open by June 2010.

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