Last week’s news of Yotel joining Hilton’s system sparked chatter among leaders in the hotel industry.
On Thursday, Hilton launched a new collection brand, Select by Hilton, and brought on London-based Yotel as its anchor flag through an exclusive franchise agreement. The partnership allows Yotel to independently manage its 23 hotels.
Yotel CEO Phil Andreopoulos spoke with Hotel Dive about why his brand decided to team up with Hilton and elaborated on his company’s plans for growth. In short, partnering with Hilton allows Yotel to enhance visibility while still maintaining its autonomy, he said.
An unconventional union
“It's not a traditional, big brand acquires smaller brand acquisition — this is something quite different to that,” Andreopoulos said. “I know that it is important to us at Yotel that we retain our entrepreneurial spirit and our independence and our ability to be nimble and agile and swift when it comes to speed to market.”
Oftentimes in the industry, when smaller brands get acquired by bigger ones, they “lose the secret sauce that made them special in the first place,” Andreopoulos said. Through this unique arrangement, Yotel will still be able to have control over its brand, design and operations.
Andreopoulos joined Yotel in September after spending nearly 25 years at Marriott International, and he wanted Yotel to join forces with Hilton in part to help the company grow both in room count and product variety.
“I knew that there were a few things we had to do to make sure that we achieved our goals, and having an affiliation arrangement with one of the big global brands was an important piece of the jigsaw puzzle,” he said.
Andreopoulos highlighted Hilton’s wide-ranging distribution system, which made the hotel giant stand out from others during what he described as a “competitive process.” Hilton also boasts an expansive loyalty program, with nearly 250 million Hilton Honors members, standing as one of the “largest loyalty memberships in the business,” according to Andreopoulos. He also felt Hilton was a good culture fit and aligned with Yotel’s values the most.
The executive added that he hopes all of Yotel’s hotels will be integrated into Hilton’s online booking system by the end of this year. And its partnership with Hilton is also a symbiotic one.
“It's an independent brand living in the ecosystem of a big brand company,” he said. “And I think that's good for both parties.”
Yotel’s plans for growth
By the end of 2030, Yotel aims to grow its room count from 5,500 to 15,000 rooms, which should roughly equate to adding 100 hotels to the pipeline, Andreopoulos said.
Although Yotel only has six hotels in the U.S., it yields a fair amount of recognition in part due to its positioning in core markets, including New York City, Miami, Washington, D.C., Boston and San Francisco. It plans to continue targeting urban markets in the U.S., including near “downtowns and in-demand locations,” Andreopoulos said.
In response to growing demand for leisure travel, Yotel also has a resort concept up its sleeve and is currently eyeing possible resort locations in the U.S., the Caribbean and Asia, potentially near beaches, according to Andreopoulos.
“It’s the same philosophy — we want to be in the best locations, or at least very close, so the best locations are accessible to our guests, but at the right price point using our efficient and well-thought-out, compact design,” Andreopoulos said.
