Hilton to leverage franchising for Apartment Collection

McLEAN, Virginia – On the heels of recently launching its Apartment Collection by Hilton brand, the industry giant is moving quickly to scale unit growth in 2026, leveraging its partnership with Placemakr alongside an aggressive franchise strategy targeting owners in the multi-family and lodging segments.

Gary Steffen, senior vice president and global category head, full-service brands at Hilton, told Hotel Investment Today that the company will actively engage franchisees on its newest segment during the Americas Lodging Investment Summit (ALIS) in Los Angeles this week. Steffen said Hilton is already positioned for near-term expansion, citing approximately 3,000 units tied to the partnership with apartment hospitality operator Placemakr, in addition to an existing inventory of roughly 10,000 units.

“You’re going to see some franchise operators come on board, and the volume of interest we’re seeing already is incredible,” Steffen said. “We’re going to have several thousand [units] by the end of this year. From the standpoint of future growth, we think this will be upwards of 20,000 units,” he said, adding that the brand’s Franchise Disclosure Document is in the process of being finalized.

Apartment Collection by Hilton bedroom

Placemakr will manage the units tied to its partnership with Hilton, with opportunities for further expansion. “Placemakr would love to expand with us, so we’re going to definitely be introducing the brand to potential owners,” Steffen said.

He added, “We’re also going to rely on our great tools and resources to enable additional partners to be successful in this space. If you name some of the big builders out there, clearly this is going to be an opportunity for them to get into the segment while managing their own inventory.”

‘Split’ buildings

A key priority for Hilton will be broadening its ownership base within the nascent brand, Steffen said. “The number one thing is we’re going to undoubtedly bring in new owners,” he added.

The Apartment Collection by Hilton will feature furnished apartments, ranging from studios to four-bedroom units. The recent launch took place some three months after Hilton introduced the Outset Collection by Hilton, its 25th brand and eighth within its lifestyle portfolio. Apartment Collection marks the company’s fourth extended-stay brand and follows the debut of LivSmart Studios, Hilton’s lower-midscale extended-stay concept unveiled two years ago.

Steffen added that since a portion of new franchise partners are expected to come from the housing community, a major appeal for owners and developers is the ability to “split” buildings. Such a strategy would involve dedicating a portion of the asset to the Apartment Collection while maintaining traditional residential or hotel uses elsewhere.

I think that’s the ROI play with these owners. They can take a percentage of their buildings and put them into our commercial engines and achieve some higher outcomes from an area-wide perspective because of the mix [of business].

Gary Steffen

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Steffen cited existing apartment buildings as a prime example of the potential for a split model, suggesting some 70% of a building might be earmarked for traditional long-term stays, while the remaining 30% targets shorter-term stays.

“I think that’s the ROI play with these owners. They can take a percentage of their buildings and put them into our commercial engines and achieve some higher outcomes from an area-wide perspective because of the mix [of business],” he said.

Steffen cited an example of such a strategy at one of the company’s DoubleTree properties, which is currently undergoing a renovation. Due to some softening in the hotel market, the property is exploring the possibility of converting two floors to the Apartment Collection. He further emphasized that property conversions “will be a big part” of the brand’s growth going forward.

When it comes to development costs, Steffen acknowledged they will vary widely depending on unit mix and configuration. “It will definitely be a range, and that’ll be in our Franchise Disclosure Document. We want to ensure a good mix from studios up to three- and four-bedroom units,” he said.

International opportunities

While the initial rollout will focus on the U.S., with locations expected in major cities such as New York, Washington, D.C., and Atlanta, Hilton plans to pursue international growth shortly thereafter. Steffen specifically cited regions such as the Middle East and Asia Pacific—and within those areas, markets such as Dubai, Qatar and Singapore—as ideal targets for the brand.

“I think you’re going to see us quickly go international. There are some great markets over there that have a lot of corporate business and the need for long-term stay residential,” he said.

According to Steffen, the initial Apartment Collection properties are expected to debut in late first quarter or early second quarter, and all 3,000 Placemakr units should come on board this year. Those properties will be bookable through Hilton channels in the first half of the year.

Steffen added that while technology integration is still a work in progress, both Hilton and Placemakr are currently operating collaboratively and expect to eventually move onto a unified system.

Addressing comparisons to short-term rental platforms, Steffen emphasized that Apartment Collection by Hilton is positioned differently from traditional home-sharing models.

“Airbnb and VRBO are really important to continue to bring new customers into the travel segments. However, we’ve said all along this is a different model where you have the Hilton name on it. You’re not going to have individual units; you’re going to have multiple units within a building. It’s not going to be one-offs,” Steffen said.