Lifestyle

Marriott acquires affordable Latin American hotel brand, bringing total to 31



The hotel brand bloat doesn’t appear to be a weight issue that will go away anytime soon.

Marriott International made a surprising brand addition on Wednesday by announcing a $100 million deal with Mexico-based Hoteles City Express. The deal enables Marriott to acquire the City Express family of brands, a chain of affordable mid-range hotels located across Latin America. It also puts Marriott on the path to becoming the largest hotel company in the Caribbean and Latin America, the company claims.

City Express will stand out from its new brand siblings like the Ritz-Carlton, St. Regis and even the Courtyard – all with higher nightly rates.

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31 of the companyst The brand allows Marriott to expand further into more affordable segments of the hotel range, something larger corporations prefer. Hilton and Hyatt have tried to differentiate themselves in recent years – especially when trying to explain why their customers don’t vulnerable to rising gas prices.

“We are excited to join a new lodging category – the popular mid-range apartment segment where we see significant potential,” Marriott CEO Anthony Capuano said in a statement. Father. “With City Express by Marriott, we will provide customers with more choice through a new, accessible, affordable service that increases opportunities for owners and franchisees as well as other customers. partner.”

City Express is the umbrella for many different brands, including City Express Plus, City Express Suites, City Express Junior and City Centro. The portfolio of 152 hotels spans across Mexico, Costa Rica, Colombia and Chile. The brand names are expected to stay the same apart from now being included “by Marriott” at the end.

A curious addition? Maybe not

At first, it may be a little scratch on the head, consider Marriott CEO Anthony Capuano condescending ideas of any mergers and acquisitions as recent as a month ago.

I still understand it, though. Brands like Residence Inn and Fairfield Inn can be quite affordable, but analysts generally see Marriott’s brand portfolio starting in the “mid-luxury” category and up. It’s a pretty complicated term, but let’s face it: Even Fairfield Inns and Courtyards can charge north of $500, depending on location and time of year.

City Express is clearly a budget brand that operates inner city, suburban and even extended stay hotels.

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“When we started thinking about City Express, we believed that a modern, efficient and affordable brand would be very appealing to local tourists,” said Hoteles City CEO Luis Barrios. know in a statement. “After having the opportunity to work with the Marriott team, we confirmed that we share common cultural values ​​and a similar approach to hospitality.”

The move to the more frugal, midsize segment of the market makes sense for a number of reasons, and fits with Marriott’s narrower scope for mergers and acquisitions following its blockbuster 2016 acquisition. Starwood Hotel & Resort.

These days, you’ll find Capuano and Leeny Oberg, Marriott’s chief financial officer, pitching the idea of ​​”start-up” or “fast-track” acquisitions intended to give the company more of a presence. in certain regions of the world or enhance the company’s presence in a market segment that is not already there.

Geographically, look to a brand like AC, focusing on Europe before Marriott takes it globally. Seeing that, don’t be surprised if City Express eventually becomes a brand beyond Latin America. In addition, Marriott has shown its interest in Latin America and the Caribbean with push into all-inclusive resorts.

“Our goal is to be everywhere guests want us to go, with the right properties in the right locations,” Brian King, president of the Caribbean and Latin America region for Marriott International, said in a statement. and at the right price”. “This transaction with Hoteles City Express will expand our ability to do exactly that – initially in [the Caribbean and Latin America]with opportunities around the world. “

Reason for discount (in terms of price)

There’s a strong reason to expand further to more budget-friendly rates. This is a segment of the hospitality market dominated by players such as Wyndham and Choice Hotels (both of which have recently increased their own presence in the industry). more expensive segment of the hotel market with Choice’s Radisson Americas Takeover and Wyndham’s Registry Collection Additional). In terms of loyalty, not everyone wants to bear the increasing costs of some of the larger companies’ brands.

There is an industry saying that the worst thing for a hotel company is to have no option for loyal customers, so they go to the competitor’s brand, like what they see and never come back. I don’t think many Bonvoy members are running away from Marriott in favor of Wyndham or Choice, but it’s a smart strategy to at least have some kind of incentive at this price point.

It could be Marriott’s 31st brand name, but this truly affordable product is a little easier to distinguish from all the overlapping competitors in the “upper mid” brand line like Moxy and Aloft or SpringHill Suites and Fairfield Inn & Suites.

Plus, it doesn’t look like they’ve passed Accor’s 40 brand mark. It’s not just brand bloat – it’s brand obesity.

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