Tru by Hilton
Hilton had recently unveiled its new chain of budget hotels, Tru, catered towards the Millennial. While I do know this was posted before by our classmate Alice, I wanted to spur some more conversation on this news as I found it very insightful as its speaks to the soon-to-be largest consumer segment, ourselves.

Aimed at the budget traveller, Tru by Hilton, aims to be the modern day hotel chain for today’s consumer (millennials). Their key brand touch points comprise of low rates, a more interactive lobby that takes the image of a college dorm, and a modern “Ikea” design. Quoted by Hilton’s CEO, “Tru will serve the largest segment of the hotel market, but a segment where no brand is meeting guests’ current needs”. While I do believe they will receive some success, for the most part I disagree with their overall brand strategy. This is for two primary reasons:

1) An oversaturated market
2) Their target, Millennials, is a different breed

Oversaturated
Not far from existing brands such as UK’s Premier Inn or IHG’s Holiday Inn, Tru seems to replicate a modern image for a budget stay. Because of such, I think it will be hard to gain traction, let alone gain market share in a space that is already crowded with competitors. Although they do boast few unique features such as build-your-own breakfast, ultimately my outlook is dismal for them becoming a winner in this space. The brand would be better suited targeting a different segment altogether or re-adjust their strategy, which leads me to my second point.

The Millennial 
From perspective an exchange student – having done my fair travelling for the past few months, the one thing I noticed about the new consumer (ourselves) is that we seek authenticity when we travel. We like to believe that any accommodation or adventure we seek is unique and better than the experience of our peers. Any idea of something being generic or replicated bores us and is not good enough. Simply put, a cheap budget hotel chain (Tru) that has the likes of everyone of its sister locations will find difficulty in attracting budget travellers seeking “unique” experiences. And this is not just my view but IHG , Airbnb, and many other hotel brands.

The reason why Airbnb has seen such success amongst Millennials is a) price/choice and most importantly b) unique accommodations that can only be found in that one stay. Every listing on Airbnb is different from one another and boasts unique services/locations/designs than every other listing. This individual experience is something that Millennials crave for in order to find the next best Instagram post and Facebook photo album brag. It’s no wonder why IHG had recently decided to buy out the boutique hotel brand Kimpton Hotels.

Summary
While I do think the Tru brand offers unique touch points, I do not think it will become a major success in the hospitality market. Competitors such as IHG’s Kimpton Hotels, will fair out more success competing in a space that no major player is in, and in which the upcoming bulk consumer, millennials, will buy into.