Hilton's 2024 acquisition of the Graduate Hotels brand helped spark a refreshed approach to lifestyle hotels for the company, and the latest stage of growth is an extension of that very brand.
Hilton has unveiled Undergraduate by Hilton, a new upper-midscale lifestyle hotel brand that similarly will target college markets but ones often without the scale required for the larger Graduate by Hilton properties.
Kevin Osterhaus, Hilton's president of global lifestyle brands, said the difference between the two brands goes beyond the markets they will serve. Osterhaus joined Hilton from AJ Capital as part of the 2024 deal.
"There's certain flexibilities that come with an Undergraduate — proximity to campus might be one of those," he said. "The size of the market is something that certainly might differentiate between where a Graduate is based, either on the size of the university or the market, but I can see markets based on the dynamics where we would have both."
Undergraduate by Hilton is an acknowledgement that the appeal of the upper-upscale Graduate brand's particular type of hospitality extends beyond markets with major drivers such as SEC football and the need to provide a profitable model to owners in different types of hotels, Osterhaus said.
Hilton officials project the first Undergraduate hotel opening in 2027, although Osterhaus said deals for the new brand are still in the works. Ultimately, Hilton is targeting both new-build and conversion opportunities, with hopes of eventually opening as many as 500 properties, according to the news release announcing the new brand.
"We see huge, huge demand," he said. "The first thing we did was look to create as efficient as possible of a prototype, then figure out how do we create something that [could] be localized."
He said the Undergraduate brand will also be flexible on adaptive-reuse projects.
Key features of Undergraduate hotels will be social spaces designed to function like "an always on, off-campus hangout" and all-day markets called the Super Senior's Snack Bar with grab-and-go options and a barista.
Much like Graduate hotels, Undergraduate properties will be specifically designed with the school theme baked in and are meant to reflect the culture of the campuses they're connected to. Public spaces will be "library-inspired," and guest rooms will be meant to evoke "creative classrooms."
Osterhaus said the existing Graduate brand has inspired a unique type of guest loyalty, and extending that requires understanding the specific needs of travel to college towns.
"I think we're looking to build off that loyalty in a couple of different ways," he said. "This builds on the brand equity of Graduate Hotels; it builds on the success we've had with that platform. It builds on the loyalty that Graduate has as it relates to these university markets and these colleges while at the same time we're continuing to do something that has the consistency and engine of Hilton behind it. As we've seen with Graduate, that just continues to drive an entirely new or entirely different type of demand to these markets."
While colleges remain key to the identity of the brand, Osterhaus said it's often preferable to have markets with more diverse demand drivers, as college travel demand is often centered around a handful of major events, such as sports, graduations or move-ins.
In the spirit of the names of the two brands, Osterhaus said he thinks of Graduate as evoking a sense of nostalgia and looking back on a collegiate experience, while Undergraduate celebrates "discovering those things for the first time."
"We're working in these markets with owners to build some of those touchpoints into the offering," he said.
One of key challenges for the new brand will be carrying over the lifestyle experience established by Graduate to a lower segment and price point, which Osterhaus said will boil down to "how we tell the story both in food and beverage and the guest room."
"We saw a white space to provide inventory that is creative, that has a dynamic component to it, done in a way that speaks to what we hope to accomplish in our lifestyle brands," he said.
This is Hiltons third brand launch in seven months, following the outdoor-focused Outset Collection and the residential-focused Apartments Collection.
Hilton originally purchased the Graduate brand for $210 million, and has since grown its portfolio from 35 hotels either open or in development to nearly 60. The company plans to have roughly 700 lifestyle properties by 2028, and Hilton's overall portfolio today stands at over 1.3 million rooms across roughly 9,200 hotels.