Marriott to Undergo Significant Expansion of Select-Service Brands

by | May 10, 2017 | Chains

Marriott International, the world’s largest hotel company, plans to add as many as 300,000 new rooms over the course of the next three years, both expanding the footprint of its own legacy select-service brands while simultaneously stepping up growth at the select-service brands it acquired in its deal with Starwood International last year.

The Starwood International brands in question include the likes of Aloft and Element, while the legacy Marriott International holdings include brands such as Fairfield Inn and Courtyard, which have 370 and 280 hotels currently in development, respectively. This makes those brands Marriott’s largest, as it pertains to development. Currently, Marriott offers approximately 1.2 million rooms worldwide, with another 420,000 guest rooms making for a healthy and robust project development pipeline.

To get a better understanding of how significant this sort of growth is, consider that 300,000 rooms is about twice that of Hyatt Hotels’ entire global inventory. If completed, this select-service expansion would be roughly equivalent to building a new hotel every 14 hours or so.

Marriott completed an industry-shaking $13 billion acquisition of Starwood in September 2016, and now the company plans to streamline the sales force that has been responsible for serving Marriott’s 750 top corporate customers, with an end goal of being better prepared for the corporate-pricing season that is set to begin in May.

The place of the acquired Starwood International properties amid this continuing growth is not one to be downplayed. Take, for example, Starwood’s former Aloft select-service brand, a trendy offering geared to attract a younger generation of world travelers. That brand features about 126 properties worldwide, with 135 hotels currently in its development pipeline. Element, meanwhile is another Starwood brand, and this one has 23 units, with 73 additional properties currently being developed. Marriott International leadership has said that they see a bright future for Aloft, and all indications would seem to be that this is correct.

In other Marriott International news, the company recently announced that it was investing an undisclosed amount of money in the in-destination, metasearch service known as PlacePass. The reason behind the investment is to better serve the loyalty guests that make up the Marriott Rewards and Starwood Preferred Guest programs, a collective total of more than 100 million members. This placing of faith in PlacePass may represent a new frontier for Marriott. PlacePass was founded last year. It’s based out of Cambridge, Mass., and it currently offers listing and price information for more than 100,000 experience in 800 destinations across the planet, with activities that include a picnic in the Grand Canyon, or a tour of places in the U.K where producers filmed the hit television series “Downtown Abbey.”

The investment in PlacePass is seen by industry insiders as a direct attempt to compete with companies such as TripAdvisor and Airbnb, both of which have expanded their reach from behind the core of the hotel business to include investments in similar in-destination listing services. TripAdvisor, for example, acquired in 2014 Viator, an online booking service for tours and attractions at a price of $200 million. Last November, the peer-to-peer industry disruption company Airbnb debuted its own offering called Trips, which gives listing to local tours and experiences in 12 cities. By the end of 2017, this service is likely to have expanded to 50 different cities across the globe.

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