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The first Tru by Hilton hotel is expected to open by the end of the year. Courtesy of Hilton Worldwide

Hilton Debuts New Chain to Win Over Millennials

Jan 25, 2016

Hilton Worldwide has unveiled the debut of a new chain of hotels that will aim to court younger travelers by touting mobile features and lounge spaces in a bid to compete with a space that has been upended by home-sharing purveyor Airbnb.

The brand, called Tru by Hilton, is the 13th hotel concept by Hilton (hlt)–which already operates hotels under its namesake, Waldorf Astoria, Embassy Suites, and DoubleTree, among others. Hilton on Monday said it signed leases for 102 Tru hotels, with an additional 30 locations in the pipeline in cities including Atlanta, Houston, Portland and Chicago.

"The brand will appeal to a broad range of travelers who span generations but think alike; they are united by a millennial mindset—a youthful energy, a zest for life and a desire for human connection," Hilton said in a prepared statement.

Among the perks listed? A 2,770 square-feet first-floor open space it is calling "The Hive," fitness centers with a core focus on cardio and flexibility, and a re-envisioned front desk that features a social media wall with real-time content.

The bid to court millennial travelers comes as the hotel industry has faced a steep challenge from Airbnb, which has made major inroads with travelers in recent years looking to book rooms on a budget. Airbnb is expected to account for 5.4% of total U.S. room supply this year. Notably, only five hotel operators have market share penetration above 5%. (For more on the hotel industry's struggles, read "These Hotel Stocks Could Help Investors Sleep at Night.")

Hilton's plan to tackle this segment is a purposeful move into a more affordable category of the hotel industry. Many of Hilton's brands currently focus on the luxury, upper upscale and upscale markets.

But Tru is positioned in the midscale category. Hilton says more than 40% of all U.S. hotel says are within the midscale and economy sectors, so it sees vast potential for the brand.

The first Tru by Hilton hotel is expected to open by the end of the year.

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