Marriott International, the world’s leading hotel chain with more than 1.4 million hotel rooms worldwide, announced on May 1, 2023 the acquisition of a new chain, City Express, creating the 31st brand in the Marriott portfolio. While such acquisitions are frequent in the hospitality industry, this acquisition marks a turning point in the group’s strategy as it moves into a segment neglected by American chains, budget hotels.
150 new franchisees in Central and Latin America
For Marriott, this is an opportunity to establish itself more easily in traditionally complex markets, in Central and South America: 150 franchisees are joining the Marriott portfolio, the power of its distribution network and its loyalty program, the largest in the world.
The 150 franchisees are spread in 5 concepts within the City Express brand:
- City Express, the Flagship brand that offers simple comfort and standard rooms on the outskirts of major cities
- City Express Plus, which offers a more premium experience
- City Express Suites, which, as its name suggests, offers exclusively suites
- City Express Junior, with smaller properties
- City Centro, which extends the concept to downtown areas
The in-house loyalty program, City Premios, will be replaced in the coming weeks by Marriott Bonvoy.
American hotel chains do not really develop budget hotel concepts
None of the major Anglo-Saxon hotel chains is familiar with the concept of budget hotels as they are known in Europe or South America.
In the large American chains, a distinction is made between full-service and half-service hotels, with ranges from luxury to comfort within this distinction.
At Marriott International, for example, the most “economical” hotels are either long-stay or family hotels, such as Residence Inn or Springhill Suites, or mid-range hotels such as Four Points, ALoft or AC Hotels (also an acquisition). The most striking incursion into the budget segment remains Moxy, but always with a trendy feel and always in Premium locations.
The same is true for Hilton, Hyatt and IHG.
The success story model in the budget hotel sector remains Ibis
God knows that we at TravelGuys are not particularly fond of Accor. But this disaffection consists mainly in the management of the group’s Premium brands… As for budget hotels, we have to admit that the Ibis brand is a success that has never been denied, and rightly so.
Even though the brand is gradually moving away from the ultra-standard rooms that made the concept so strong in the 1980s, the fundamentals remain: a comfortable bed, a full bathroom, 24-hour reception, a quality restaurant and an affordable price.
Above all, unlike the American chains, Ibis does not refrain from limiting the size of its rooms in order to continue offering low prices. Many Ibis have rooms of less than 15m2.
This simplicity as well as a dense geographical network has allowed Ibis to secure Accor by always offering a quality profitability background to the group.
Let’s hope that for Marriott, the acquisition of City Express will allow it to offer more diversity in its portfolio with an economic experience with more traditional characteristics than Moxy.