February 2, 2023

Chicby Karina

Think exceptional travel

Marriott to Fuel Growth in Affordable Midscale Segment – Hotel Magazine

Marriott to Fuel Growth in Affordable Midscale Segment – Hotel Magazine

Marriott International is on track to becoming the largest hotel company in the Caribbean and Latin America (CALA) with its recent agreement with Hoteles City Express (HCITY) to acquire the highly regarded City Express brand portfolio. This signals Marriott’s entrance into the affordable midscale segment with its 31st brand, strengthening its presence significantly in secondary and tertiary markets in the region.

Hoteles City Express is a Mexico-based company established in 2002 by Luis Barrios. The company’s portfolio presents customers with a range of mid-scale properties – from urban, suburban, and extended-stay offerings in Mexico, Costa Rica, Colombia, and Chile. With exceptional brand recognition among Latin American travellers, the brand has been awarded the prestigious title of “Marca Notoria” in Mexico for its hospitality sector leadership and brand recognition.

The portfolio currently comprises 152 hotels, including 17,356 rooms spanning 75 cities in Mexico and three other countries in Latin America. When the transaction closes, the brand and hotel network will integrate into Marriott’s franchise system. Marriott will also acquire the franchise rights to five under-construction projects in the pipeline, adding another 676 rooms. The brand name will be updated with the company’s signature “by Marriott” endorsement.

As part of the agreement, Marriott will pay $100 million for Hoteles City’s brand portfolio (City Express, City Express Plus, City Express Suites, City Express Junior, and City Centro), associated trademarks, domains and related intellectual property, the City Premios loyalty programme, and other assets and liabilities related to the brand. Stabilised franchise fees are anticipated to be approximately ten million for the existing portfolio.

Marriott has a proven track record of expanding regional brands by utilising its global development engine and extensive programmes and revenue systems, including the award-winning Marriott Bonvoy loyalty platform and innovative digital travel programmes, such as Marriott.com and the Marriott Bonvoy mobile app. Upon completing the transaction, Marriott will become the largest hotel company in CALA, boosting its regional presence by 45 percent to 486 properties across 37 countries. Given the high-growth nature of the affordable midscale segment, the company will further expand the City Express by Marriott brand in the region and other locations.

“This transaction with Hoteles City Express is a strategic win for Marriott and our customers, associates and owners and franchisees,” said Anthony Capuano, Chief Executive Officer, Marriott International. “We’re excited to enter a new lodging category – the popular, affordable midscale segment where we see significant potential. With City Express by Marriott, we will be providing our customers with more choice through a new, approachable, moderate-priced offering, increasing opportunity for owners, franchisees, and associates.”