Development

Sixty Percent of Embassy Suites Pipeline to Feature Design Option III Prototype

The Design Option III (DOIII) prototype introduced in 2006 (with the first opening in 2009) has played a key role in extending the brand’s growth and is incorporated in 60 percent of the current pipeline.

Embassy Suites by Hllton Despite the recent challenges in hotel development, Embassy Suites Hotels remains steadfast and strong.  With 37 projects approved or under construction, the brand is enjoying an extraordinarily healthy pipeline and has more rooms under development than any of its upper-upscale competitors.*

The innovative Design Option III (DOIII) prototype introduced in 2006 (with the first opening in 2009) has played a key role in extending the brand’s growth and is incorporated in 60 percent of the current pipeline.  As development gradually begins to increase, this versatile design choice is helping to keep developers’ costs manageable and to create a healthier return on investment (ROI). 

Looking back at the brand’s progress over the past two years, Jim Holthouser, global head of Embassy Suites and full service brands, Hilton Worldwide, observed:  “Our success during this challenging period speaks to the versatility of our Design Option III prototype, and of our Kit of Parts approach to design.  Spaces that once seemed prohibitive in terms of size or cost for an Embassy Suites are now more attractive with a DOIII-style build.  I’d say that innovation and flexibility in our approach have really paved the way for our continued growth.”

With an atrium environment at the entrance (which allows more natural light) and guest suite towers that flank the building, DOIII does not lose any of the upscale qualities that are paramount to the Embassy Suites brand.  The new option can be built on a three-acre site, is scalable from 150 to 300 two-room suites, and costs approximately $10,000 – $15,000 per key less to build than Design Option II.  This flexible layout gives developers more market choices, from urban and coastal to corporate and convention center.

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Marking an important milestone in the success story of this prototype, the 10th property featuring DOIII is scheduled to open in Ontario, Calif., in January 2011.  This hotel will be the second of three DOIII Embassy Suites properties for developer Bharat Patel of Sun Development & Management Corporation, who is also responsible for the recently opened Embassy Suites in Palmdale, Calif.

Commenting on the factors that have shaped his preference for working with Embassy Suites, Patel noted: “Being an upscale, all-suites brand, Embassy Suites is in a category of one.  I wanted to build hotels that function just as well on the weekends as during the busy work week, and the brand is well-received among families and groups.  The free, cooked-to-order breakfast and complimentary cocktails are very popular.  It’s a great value proposition that other brands in this category simply do not offer.  Our first hotel reached 120 percent market penetration in its first four months of operation, while maintaining best numbers in every category of guest satisfaction.”

Asked why he chose DOIII, Patel commented:  “It’s a very adaptable option in terms of space and energy usage.  With the atrium pulled to the front of the building and the rooms’ tower behind it, the design is more energy efficient.  We also chose to go with the Flying Spoons restaurant concept from Embassy for all three hotels because of its operating efficiency.  Guests have the flexibility to eat whenever they wish, and we don’t need to staff an entire kitchen.  It works perfectly from both viewpoints.”

Circumventing the problem of finding a suitable piece of land and the potentially prohibitive cost of a new-build project, many developers have moved more in the direction of conversion or adaptive reuse.  Projects on the horizon include the Embassy Suites St. Louis-Downtown hotel, set to open in 2011.  Formerly a Dillard’s department store, this project involves retaining the building’s historic exterior while converting the interior to a mixed-use property that will include 32,700+ square feet of retail space as well as residences.

Other notable upcoming openings are:

- Embassy Suites San Antonio Riverwalk-Downtown, featuring the first John Besh restaurant at an Embassy Suites property, will open in late October 2010.

- Embassy Suites Denver-Downtown/Convention Center, located conveniently across from Denver’s Colorado Convention Center, is scheduled to open in December 2010.

- Embassy Suites Houston-Downtown is an urban development overlooking Discovery Green Park, and just steps away from Houston attractions such as George R. Brown Convention Center, the Houston Astros Minute Maid Park and the Toyota Center. The property is scheduled to open in February 2011.

- Embassy Suites Atlanta-Gwinnett/Sugarloaf, the 11th DOIII property, is scheduled to open in December 2011.

Looking ahead, Embassy Suites Hotels anticipates continued pipeline growth through 2011 and has a long-term development goal of 400 hotels open, approved or under construction in the next five years across North and South America.

*Number of rooms in development versus competitors in the upper-upscale hotel segment as of August 2010, according to Smith Travel Research.



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