Marriott has confirmed plans to launch its City Express brand in the US and Canada, signalling a new move from the global hotel giant to expand its presence in the affordable midscale segment of the market.
The move sees Marriott aiming to exploit the full potential of its City Express brand, a Mexican business acquired in 2022. With a strong presence in its home market, City Express has already opened in several adjacent central American countries, and has recently revealed plans to launch in Brazil.
Moving into midscale
“With this announcement, Marriott is excited to continue our growth in the affordable midscale segment and provide a new welcoming, affordable, and reliable option for value-conscious travelers in the US & Canada,” said Diana Plazas-Trowbridge, senior vice president and global brand leader, for select brands at Marriott.
Marriott has spent some time preparing for the expansion of City Express by Marriott. In mid 2024, it revealed it was planning for a new midscale brand, focused on conversion opportunities in the US, codenamed Project Mid-T. The company detailed expected conversion costs of USD15-30,000 per room. For owners switching to the brand, Marriott promised a simplified fee structure, with a bundled 10.5% fee payable.
The company has now confirmed that Project Mid-T is, in fact, the rollout of City Express in the US and Canada. It says the intention currently is for City Express to be a conversion first brand, with options to shift to new builds in the future. “We have been listening closely to our owners and franchisees to design a highly efficient operating model,” said Noah Silverman, global development officer for the region. “We are confident that City Express by Marriott will offer a strong value proposition for those looking to invest in a transient midscale product in the US & Canada.”
The arrival of City Express will see it compete in a US conversions market where Marriott’s peers such as Wyndham and Choice have long competed for midscale hotel conversions. And it will put Marriott in direct competition with Hilton, which in the last year has launched Spark, its own midscale conversion brand.
A focus on conversions
At this stage of the business cycle, conversions generally are in favour for the big brand groups. The pandemic stalled the regular cycle of new hotel developments, due to supply chain issues. And following that period, financing costs have risen, while construction cost inflation has deterred many from starting new build projects.
Marriott bought the City Express business in 2022 for around USD100m, a move that gave it an immediate strong presence in central America while also taking it into a market segment where, as a group, it had little brand presence. At the time, the business had 152 hotels, totalling 17,356 rooms in 75 cities in Mexico, Costa Rica, Colombia and Chile. The business was originally founded in Mexico in 2002 by Luis Barrios. Plans are already in place to add hotels in Bolivia, Nicaragua and Brazil.
