Marriott International’s global hotel pipeline continues to thrive, so what segments and locations does the major group see as the next frontiers?

TOPHOTELNEWS caught up with vice president, international development, Paul Thomas, to see where the firm is heading.

What is Marriott’s current pipeline and how has this figure progressed recently?

At the end of Q3 2022, our worldwide development pipeline totalled 3,024 properties with more than 502,000 rooms, including 1,039 properties with approximately 204,800 rooms under construction, or 41% of the pipeline, and 233 properties with roughly 33,300 rooms approved for development, but not yet subject to signed contracts.

We added 77 properties (14,071 rooms) to its worldwide lodging portfolio during the 2022 third quarter, including nearly 3,900 rooms converted from competitor brands and approximately 8,700 rooms in international markets. At the end of Q3, Marriott’s global lodging system totaled nearly 8,200 properties, with over 1,507,000 rooms.

Does the group have particular pipeline targets?

If we look at EMEA, I think there are many growth opportunities for us. Marriott International’s select-service brands will spearhead growth across Europe, accounting for more than 50% of the company’s current signed pipeline of hotels in the Europe region. For example, Moxy Hotels has a strong pipeline of 21 hotels slated to open in 2022 and 2023, nine of which have already opened, including Paris, located right by Disneyland. Planned future openings include Moxy Tromsø (Norway), Moxy Istanbul (Turkey) and Moxy Pompeii (Italy).

Which segments is the company focusing on for its upcoming hotel projects?

We see great opportunities in the extended stay sector. The extended-stay segment remains extremely resilient in Europe, especially with the rise of multi-purpose travel. We have opened four Residence Inn by Marriott Hotels in EMEA this year and expect to open 10 more in city hotspots like Naples (Italy), Vienna (Austria) and Paris (France) across the rest of 2022 and 2023.

And if I look across our brand portfolio – we certainly have scope to grow in the midscale space. We believe there is significant opportunity for Marriott to grow in this mid-scale sector in EMEA, especially in secondary and tertiary markets.

Other areas of opportunity include the branded residential space – Marriott has been in the business of branded residences for more than 20 years and our expertise across development, sales and marketing and operations is valuable to both owners and residents. We offer residential experiences globally, in a variety of locations including city, beach/resort, and mountain destinations across 16 brands. Demand for Marriott International’s residential offering is very strong in Europe, and we certainly see more opportunity for the future.

Finally, we see great potential for all-inclusive in EMEA, in addition to growing our existing all-inclusive portfolio in the Caribbean and Latin America. There is a strong and growing consumer demand for premium and luxury properties in the all-inclusive category globally. We are continuously striving to offer our Marriott Bonvoy members and customers – as well as our development partners – new travel choices around the world. Even pre-covid we were seeing that leisure demand was growing fast globally. And post-covid we see an increasing interest in the all-inclusive vacation format. Customer and Marriott Bonvoy member feedback highlights that the all-inclusive model, particularly in the luxury sector, is an area that they would like to see us grow. We are actively looking for opportunities to expand our all-inclusive portfolio in popular leisure destinations in EMEA – with both newbuild properties as well as conversions of existing resorts.

Which brand portfolios will Marriott be concentrating on boosting in the coming years?

Set to make its European debut in 2023, Fairfield by Marriott is expected to see two fantastic hotels open next year – the Fairfield by Marriott Badhoevedorp Amsterdam Schiphol Airport (the Netherlands), and Fairfield by Marriott Copenhagen Nordhavn (Denmark). Fairfield By Marriott is Marriott Bonvoy’s second largest brand with a global distribution of more than 1,200 hotels. We see great opportunity for this brand to grow in EMEA. The Fairfield brand celebrates the beauty of simplicity and tradition of warm hospitality with a seamless hotel experience focused on value, productivity, and a great night’s sleep.

Interest in conversions into Marriott brands remains high, led by the company’s robust portfolio of collection brands, including Autograph Collection Hotels, The Luxury Collection, and in particular the Tribute Portfolio, which has grown its footprint of open and pipeline hotels by nearly four times in the past five years. Globally, conversions represented 21% of room signings and 27% of room openings in Q3 2022. We are very enthusiastic about the level of conversations on conversions, including for multi‐unit conversion opportunities.

Are there more newbuilds or conversions in your pipeline and have those ratios changed recently?

Conversions continue to be an important driver of room growth across Europe, particularly from independent hotels, given the appeal of Marriott’s powerful distribution systems. Conversions represent approximately 30% of the expected hotel openings in Europe across 2022 and 2023, and owner interest remains high for the company’s robust portfolio of collection brands – Autograph Collection Hotels, The Luxury Collection, and Tribute Portfolio.

Which global regions does Marriott see as most ripe for development?

We are always looking out for opportunities for growth and investment around the world – and we are committed to working on the right projects, in the right places, with the right partners.

In EMEA, we have announced that across 2022 and 2023 we expect to add more than 200 properties, which equates to 38,000 rooms.

How is Marriott looking to expand the City Express brand now it has been brought into the fold?

Last month, we announced that we have reached an agreement to acquire the highly regarded City Express brand portfolio and we expect the transaction could close between the end of 2022 and the first half of 2023.

Hoteles City Express is a Mexico-based company founded in 2002 by Luis Barrios. The company’s brand portfolio provides customers a range of midscale properties that include urban, suburban, and extended stay offerings in Mexico, Costa Rica, Colombia, and Chile. City Express gives us a great foothold in the midscale sector in the Caribbean and Latin American markets and we believe that there is significant opportunity for us to grow in this midscale segment.

Does this acquisition represent a development drive in Central and South America?

We are always looking out for opportunities for growth and investment around the world – and we are committed to working on the right projects, in the right places, with the right partners. City Express gives us a great foothold in the midscale sector where we believe there is further opportunity for us to grow.

Are the volatile global economic headwinds influencing the group’s development and investment decisions?

On the signing side, we continue to see strong development volume and we remain encouraged by the powerful interest in our portfolio of brands. We continue to have a little over 200,000 rooms under construction, it’s actually the 20th straight quarter where we had more than 200,000 rooms under construction globally. The recent announcement of the company’s intention to purchase Hoteles City Express is a great example of how Marriott is growing by strategic brand acquisitions as well as organic growth.

What criteria does Marriott use to choose which suppliers to work with on hotel outfits?

Marriott International is committed to responsible business practices and operations, including engaging with vendors and suppliers that are dedicated to similar principles and holding their own suppliers and subcontractors to the same standards and practices.

Our suppliers play a vital role in upholding Marriott’s reputation for excellence with guests, associates, business partners, investors, contractors and other important stakeholders. We have a detailed code of conduct for suppliers.

With regards to FF&E, in general, the FF&E is procured directly by our owners. Most owners have a good idea of the companies they prefer to work with; however, if not, we provide guidance and advice on procurement agents that we have used in the past. These companies follow the specifications of the items that the designers have designed and chosen in collaboration with us. They then will go out to tender to companies that can make various items for the owners.

Many TOPHOTELNEWS articles draw on exclusive information from the TOPHOTELPROJECTS construction database. This subscription-based product includes details of thousands of hotel projects around the world, along with the key decision-makers behind them. Please note, our data may differ from records held by other organisations. Generally, the database focuses on four- and five-star schemes of significant scale; tracks projects in either the vision, pre-planning, planning, under-construction, pre-opening or newly opened phase; and covers newbuilds, extensions, refurbishments and conversions.

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