WHEN WE BECAME AWARE THAT HILTON WAS LAUNCHING A NEW BRAND , IT PROVIDED AN OPPORTUNITY FOR CONSIDERATION , AND WE BECAME CONVINCED THAT WE WANTED TO BE PART OF THIS NEW THING FOR THE LONG TERMN
– MARK CARRIER , PRESIDENT , B . F . SAUL COMPANY HOSPITALITY GROUP
even one year ago , in January 2023 . Two properties are already open , the first , Spark by Hilton Mystic Groton , in Mystic , Conn . Two more are scheduled to open in January — Spark by Hilton Winchester , Va ., and Spark by Hilton Fort Wayne , Ind . There are now some 400 deals in some stage of discussion and Hilton aims to open 100 Sparks in 2024 .
A conversion brand aligns with the times of high interest rates and high construction costs , which both are impacting the hospitality industry and chocking off new supply . In order to grow , franchisors are turning to conversion brands , like Spark , like IHG ’ s Garner hotels , like Marriott International ’ s City Express and Four Points Express by Sheraton . For both Hilton and Marriott , conversions accounted for a meaningful percentage of new signings and openings — around 35 % of new signings in the third quarter for Hilton and 20 % of new signings and 30 % of openings for Marriott .
“ It ’ s a super-short gestation period from pipeline into [ net unit growth ]” and “ those are projects , they ’ re in the ground , they ’ re under construction and we have rational timelines for when we think that those will deliver ,” Nassetta said .
“ We ’ ve got some basic strong fundamentals , slow supply growth for several years , which looks to continue going into 2024 . And that ’ s reflected in our higher percentage of conversions ,” said Marriott International CFO and EVP of Development Leeny Oberg .
The Spark brand was a consequence of COVID in response to changing guest tastes and travel habits . It was built out before the Federal Reserve began hiking interest rates , which made building new hotels more challenging . In the case of Spark , it was an accidental stroke of good fortune . “ Call it kismet ,” Klees said .
At the opening celebration were Chris Nassetta , president and CEO , Hilton ( middle ) with Todd Pearson , president and COO , B . F . Saul Company and Saul Centers Inc . ( right ) and Mark Carrier , president , B . F . Saul Company Hospitality Group . Photo credit : Nandor Nagy
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