GROWTH IS EMBASSY'S GOAL
Jim Holthouser loves a challenge, and he can even find one with a brand that has led its segment for decades. Earlier this year, Hilton named him senior vice president, brand management, for Embassy Suites. He previously had the same job at Homewood Suites by Hilton, where he more than doubled the size of the chain to 170 properties with 110 more in the pipeline.
The energetic Holthouser has big plans for Embassy, a brand that invented the all-suites segment of the hotel industry. With nearly 190 properties now, he envisions growing to 300 units or more by 2010, and recent enhancements to the brand make that lofty goal a real possibility.
“The old design doesn't make sense anymore for certain markets and locations,” he says. “Land costs are too high, and rising energy costs make it difficult to efficiently heat and cool a 10-story atrium.”
The solution is Design Option 3, a prototype introduced in January that represents the first major change to the brand's design and layout in more than 25 years. The prototype replaces the iconic donut-shaped building and the product's shotgun suites with a scaled-back atrium, double-loaded corridors and side-by-side suites.
“It's a very intelligent approach to the product,” says Holthouser. “The new building requires 2.8 acres of land, versus four acres for the original design, and the construction costs are $15,000 to $20,000 less per key. Yet, the new design doesn't jeopardize any of the elements that have made Embassy Suites so successful.”
Holthouser hopes to convince some focused-service developers to step up to the new Embassy prototype, which has 156 keys as standard but is scalable up to 300 suites. “It's really not that big of a leap for them. The beauty of the product is that it produces upper upscale rates with the operating models of focused-service hotels. As a result, GOPs in the 40- to 50-percent range are possible.”
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