Hilton Jumps on the Hostel Bandwagon With a Budget Brand

Hilton is taking a step in to unchartered territory — at least for a major hotel chain. Based on feedback the brand received, it is launching a hostel-like stay within the Hilton portfolio, called Motto by Hilton.

The hotel chain describes the brand, the fifteenth under its umbrella, as "a micro-hotel with an urban vibe in prime global locations." So, what exactly does that mean? According to Tripp McLaughlin, the global head of Motto by Hilton, the term micro-hotel means you should expect small, efficient and standardized rooms — so small, you can expect an average footprint of 163 square feet, or about half the size of a traditional Hampton room.

Inside each of the rooms, expect to find space-saving features like wall-beds, lofted beds, segmented showers and toilet stalls. Much inspired by boutique hostels, which Hilton noticed was a trend and an under-serviced segment in its portfolio, it's also giving travelers the option to create a hostel-like vibe — especially if you're traveling with a group.

All Motto rooms will have the option for guests to book linked rooms in advance — as many as the site's owner allows. In addition, Hilton's making it easier for guests traveling as part of a large group to split payments at the time of booking, rather than at checkout.

Hilton says that it saw a trend in the lifestyle hostel model around the world — especially for the shared room concept. But, its research showed that travelers weren't all too keen on having to share room with strangers. With the Motto brand, Hilton says it's giving travelers a unique, local experience in prime locations, while helping them to save some cash on the nightly rate in order to spend that money to make their time in a city more memorable.

"With Motto by Hilton, we are bringing to market something the industry has never experienced with its flexible and affordable room product, desirable locations and guest-empowered service," said Christopher J. Nassetta, president and CEO of Hilton.

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McLaughlin told TPG that Motto doesn't have any immediate non-hostel competitors in the big brand sphere. While Motto will "be the most affordable brand" in the Hilton portfolio, there wasn't a price point available as of Tuesday's launch. However, McLaughlin did say that the first Motto property is expected to open sometime in 2019. Though he didn't specify exactly which location would be first to open, you can expect Motto properties to open in popular neighborhoods in London, Dublin, Savannah, Austin, New York City, Lima, San Diego and more. In total, Motto expects to open more than 175 properties across the globe.

Since Motto will be so bare-bones — you can expect a bar in the lobby, coffee in the morning and small plates — that Hilton Honors members shouldn't expect the same treatment as one might expect at a Conrad. There's no club lounge, no breakfast spread and no upgrades. So Motto is taking the unique approach in giving Diamond members a food and beverage credit to use at the property. Basic Hilton Honors members should expect to earn 10 base points per dollar spent at Motto properties — a preferable rate as compared to some other budget Hilton brands like Tru by Hilton and Home2 Suites by Hilton, which earn 5 base points per dollar. Similarly, expect the ability to redeem your Honors points for stays at Motto properties.

In a call with TPG, McLaughlin said that just because Motto is an affordable brand aimed at budget travelers, Hilton isn't skimping on some of the details. For example, a complaint of traditional hostels is loud noise and bright lights that can keep guests up at night. To combat some of those complaints and to set itself apart, Motto properties will feature sound-absorbing walls, connected rooms, sleep kits with eye masks, a white noise app, blackout window shades and more. And that little alarm clock you see in just about every hotel room that emits an LED light? Motto knows that most of its guests will use a cell phone as an alarm clock, so it's doing away with them. And for those that still want to use an in-room alarm clock, one will be built into the TV.

The move to open Motto is an interesting one for Hilton — and one that shows that it's taking a unique approach to its offering. While it remains to be seen exactly what these properties will be like when fully operating, the new brand could make it an easy choice for backpackers looking to travel on a budget and looking to earn or redeem Hilton points.