The U.S. got its first Moxy hotel in early March with the opening of Marriott International’s lifestyle brand in Tempe, Ariz. Behind the scenes, Twenty Four Seven Hotels—a Newport Beach, Calif.-based investment, development and management company—helped bring the project to life, and set the stage for the brand’s future demand in the U.S.
Twenty Four Seven already has a strong relationship with Marriott, CEO David Wani said. “Of the 15 hotels we manage, nine are Marriotts,” he said. “We’re one of the few companies that are third-party approved to manage Marriotts.”
For nearly 10 years ago, the building had been a Four Points hotel, converted from a Holiday Inn. “That brand was not performing for us, so we were discussing brand options with a lot of different companies,” Wani said. One of those conversations was with Tony Capuano, Marriott’s chief development officer, and Eric Jacobs, Marriott’s chief development officer for North America lodging, who began talking about the Moxy brand that had just been established in Europe. “We thought it could be good for Tempe,” Wani said. “It’s a very hip city within the Phoenix area.” In spring 2015, the company secured the franchise and began working on the hotel’s design, going back and forth with Marriott to make sure everything was in order.
The final result is a “unique design” for a hotel guestroom, Wani said. “It’s a conversion, but their prototype is 170 square feet—which is great for San Francisco or New York.” The Tempe Moxy’s average guestroom will cover 300 square feet, he said, but “it doesn’t feel like the room is too large.” As with many new brands, the Moxy design emphasizes open space, with no dresser or armoire. “Most brands are walking away from that,” Wani said, describing the overall design as “minimalist, but user-friendly,” with funky features like check-in at the bar.
“From Marriott’s standpoint, they see the brand as their entry into the boutique millennial demographic,” Wani said. “They’re moving forward even with core brands—Courtyard, Residence, SpringHill. They’re updating their design packages, especially the lobbies.” Of course, he noted, a well-established brand can’t just make sweeping changes to existing hotels and risk alienating other demographics, but Moxy gave them a chance to try something new. Looking at other boutique hotels in a range of cities, the Marriott team and Wani took the best elements and combined them for a unique kind of hotel.
Lifestyle vs. Boutique
Marriott, Wani said is referring to its Moxy and AC brands as lifestyle hotels rather than boutique—“a technicality, but worth noting,” he said. “This segment is changing the game by forcing the brands to adapt to lifestyle hotels design and operation platforms.” The design elements are being introduced throughout the properties in color schemes (more grays and subdued colors versus the brighter color schemes of previous designs, he said); bathrooms have showers instead of tubs; and countertops and bath vanities are quartz or other materials as opposed to the traditional granite standard.
The biggest changes are taking place in the public spaces, Wani said, which are opening up and are designed to be more socially oriented, with communal tables and flexible seating, as well expanding connectivity for laptops and phones. “The standards for high-speed Internet access and capacity are increasing tremendously to account for the increased usage, which of course is driven by the millennial guest in particular,” he said.
Looking ahead, Twenty Four Seven’s development pipeline includes two Hampton Inn & Suites (in Los Angeles’ Koreatown neighborhood, slated to open in fall 2017, and in Rancho Cucamonga, Calif., set for a summer 2017 opening) and a Courtyard hotel in the Studio City area of Los Angeles, slated to open in early 2018. “We feel from a compression standpoint that this hotel will be well positioned to capture a significant amount of compression from the surrounding markets, as well as Koreatown, which has no branded hotels,” Wani said.
But even these established brands are seeing influence from the boutique and lifestyle segments, according to Wani. The owner of the Koreatown Hampton hotel specifically asked the Twenty Four Seven team to create something more in line with a boutique look and feel than a typical Hampton. Hirsch Bedner & Associates’ Studio HBA is designing the interiors, and Wani said that most of the furniture, fixtures and equipment will be customized and unique for the hotel.
“Investor capital remains largely attracted to these ‘tried-and-true’ brands based on consistent performance and returns, even in down cycles,” Wani said. “These traditional brands are evolving in design and service delivery to incorporate more lifestyle elements. As the majority of institutional debt and equity still prefers the traditional brands in this segment, investors looking for strong growth in asset value and a clear exit strategy remain largely focused on the brands that garner interest from these groups as they tend to be the ultimate buyers for these investment-grade assets.”