It could open as early as 2018

By Lucinda Shen
September 26, 2017
September 26, 2017

Seeking to attract the travel-minded millennial generation, Hilton Worldwide is going smaller, cheaper, and more local with what it’s calling a “hostel on steroids,” CEO Christopher Nassetta said at the Skift Global Forum in New York on Tuesday.

“It’s very trendy in a sense, sort of like a hostel on steroids. But a lot of steroids,” Nassetta said of the new hotel concept, what he called an “urban micro brand.” The CEO first mentioned the ultra-small hotel idea in 2016.

“The idea is to have super efficient spaces that are crazy flexible,” Nassetta later told Fortune.

The news comes after Hilton in 2016 launched Tru by Hilton, a line of hotels that are smaller and cheaper than Hilton’s core hotel brand, in an earlier bid to attract millennials. Major hotel chains have struggled in recent years as the price-conscious generation known for seeking novel experiences has opted for less conventional travel options, such as those available on home-sharing platform Airbnb.

Airbnb’s presence has forced the industry’s legacy brands to experiment with unconventional ideas. With the yet-unnamed concept, for example, Nassetta is hoping to make the rooms similar to connectable building blocks. In theory, that could allow a party of four to rent four rooms and merge two for play and two for sleep. But Nassetta is still ironing out the specifics when it comes to room design — rooms may have queen beds or multiple single bunks, and the rooms are more likely than not to each have their own bathroom, unlike many hostels.

While rooms at Tru are between 231 to 275 square feet on average, the new micro rooms are expected to measure between 125 square feet to 150 square feet. The smaller rooms are also expected to come with a smaller price tag, likely below that of Tru’s, which averaged around $95 a night when that brand first opened.

Hilton’s new hotels will also include trendy restaurant and bar areas to attract locals. That, the company believes, will help travelers feel like they’re connecting with their destination rather than simply observing it.

“It can’t be like Tru or Hamton where it has a consistent experience across the world,” says Nassetta. “It’s got to have a very cool locally curated concept with a local partner in the food and beverage scene. It’s got to have a bar scene. It’s got to bring the community in.”

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