When you think of what type of hotel brings in the most cash, you’re likely thinking of something extremely posh — and brutal on your wallet — like St. Regis or Aman.
In fact, the revenue darling of the hotel orbit is actually a brand that’s pretty common at many exit ramps off U.S. interstate highways.
Hampton by Hilton is the brand that makes the most revenue by room out of any hotel company tracked by the 2023 Allianz Partners Big Book of Travel Data. The company’s estimated $10.2 billion in gross room revenue last year topped sister brand Hilton Hotels & Resorts ($9.2 billion), Marriott Hotels ($8.9 billion), Holiday Inn Express from IHG Hotels & Resorts ($8.5 billion) and Courtyard by Marriott ($7.1 billion), rounding out the top five, respectively.
“While we don’t disclose specific revenue figures, we’re extremely proud of the strong market position Hampton has attained as shown by its global growth, guest satisfaction and innovation,” a Hilton spokesperson said via email to TPG when asked to confirm the data. “What began as a new idea in the hospitality industry nearly 40 years ago remains as innovative today as ever due to Hampton’s consistency, strong service culture, and signature Hamptonality. We look forward to continuing to deliver friendly and reliable stays that have solidified Hampton’s position as a leader in the industry.”
Some of these figures are based on Allianz estimations utilizing publicly available performance data and other metrics. IHG is the only one of the major hotel conglomerates to parse out systemwide room revenue, according to the report (and there was a slight discrepancy, with IHG noting Holiday Inn Express had a gross room revenue of $8.3 billion compared to the slightly higher Allianz estimate).
As far as parent companies go, Marriott International took the top spot with an estimated $61.4 billion in estimated room revenue last year.
Representatives with Marriott did not respond to TPG’s request for comment in time for publication.
Making sense of the numbers
Some of the data reflects the growing sentiment of a barbell effect taking place in the hotel industry: Demand is crowding around the ultra-luxury sector as well as middle-of-the-road brands like Hampton, Holiday Inn Express and Courtyard.
The idea is that there are a lot of newer, better-maintained products in this space, and travelers figure they can get more bang for their buck by staying at a great Courtyard property rather than an older upscale hotel. Plus, you’re still earning the same elite-qualifying nights in your go-to loyalty program, just as you would if you were staying in a luxury property.
Development trends reflect this demand trend, particularly in the affordable space: Marriott, Hilton and IHG account for nearly 70% of all the hotels in the U.S. development pipeline, according to second quarter data from Lodging Econometrics.
As for the brands getting the most developer attention, Home2 Suites by Hilton takes the top spot at 565 projects, followed by Marriott’s TownePlace Suites (345 projects) and Holiday Inn Express (306 projects). Hampton by Hilton (292 projects), Marriott’s Residence Inn (258 projects) and IHG’s Avid (132 projects) also account for a hefty number of hotels currently in various stages of development.
Of course, keep in mind Hilton and Marriott’s namesake brands occupy the second and third spot on room revenue rankings, respectively, so it isn’t like there is zero upscale or upper-upscale representation in terms of brands bringing in travel dollars.
These are some of the most popular hotel brands in the world and have the largest footprints in terms of locations: Marriott Hotels had 575 locations around the world at the end of 2022 — more than any other of Marriott International’s luxury or premium brands.
Hilton Hotels & Resorts had 604 locations at the end of 2022 — more than any other of Hilton’s upper upscale or luxury brands. For perspective, Hampton had 2,863 locations and Courtyard had 1,280.
The rise of the budget traveler — and using that to boost elite status
Expect more midscale and affordable brands to be your way to higher loyalty status in the future. Marriott, Hyatt, IHG, Hilton and Paris-based Accor all launched more affordable brands this year in a push to better appeal to travelers at all price points.
Hyatt’s Hyatt Studios is the Chicago-based hotel conglomerate’s push into the extended-stay travel sector. Accor launched in January the Handwritten Collection, a soft brand focusing on midscale independent hotels.
Marriott acquired Mexico-based City Express, a midscale brand, and continues to evaluate whether it can expand that brand globally like it did with AC, a brand with Spanish roots that Marriott acquired in 2011 and later took global. Marriott also has launched an affordable extended-stay brand, StudioRes, earlier this year.
We’re monitoring the developments, as most of these brands will allow travelers to earn elite-qualifying nights and points just as they would with their higher-priced siblings. But there are signals some might have different earning potential down the line.
One thing is clear, however: Affordable brands are getting the most love from their respective parent companies these days.
“I mean it’s not sexy, OK? It’s not as sexy as lifestyle or luxury,” Hilton CEO Christopher Nassetta said earlier this year of his company’s push into economy brands with the launch of Spark. “But in terms of an opportunity to be a value contributor in the billions of dollars for this company and its shareholders, I’m as excited about this as anything else we’ve done.”
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