Systematic Marriott breaks from convention

The first AC by Marriott in the U.S.
The first AC by Marriott in the U.S. is scheduled to open in New Orleans in an adaptive re-use of the historic Cotton Exchange Building.

The first AC by Marriott in the U.S. is scheduled to open in New Orleans in an adaptive re-use of the historic Cotton Exchange Building.

New York – Under CEO Arne Sorenson’s now two-year lead, Marriott International has shifted to include a heavy focus on millennial travelers and to significantly grow its global portfolio of luxury and lifestyle brands.

In doing so, Marriott is breaking with long-standing tradition. In the past, it would push its brands either individually or by price point; now, Marriott is promoting its “Luxury & Lifestyle Portfolio,” a grouping of eight Marriott brands that range from luxury (Ritz-Carlton) to upper-end select service (AC by Marriott).

The launch of the new portfolio was a highlight of a wide-ranging press conference held here during June’s NYU International Hospitality Industry Investment Conference, devoted to the company’s global development strategy.

Across the eight brands, the portfolio presently consists of 449 hotels out of Marriott’s roughly 4,000 hotels worldwide. In addition to Ritz-Carlton and AC by Marriott, the participating brands include Renaissance, JW Marriott, Autograph Collection, Bulgari, Edition and Protea Fire & Ice, a boutique lifestyle sub-brand of Protea Hotels, which Marriott acquired in April. A ninth brand, Moxy, launched a year ago to attract the younger, value-driven traveler, is scheduled to join the portfolio when its first hotel opens in Milan in the coming months.

➔ 200

Number of luxury and lifestyle projects Marriott expects to add in next few years.

Source: Marriott International

These brands are on a development fast track, according to Tony Capuano, Marriott’s EVP and global chief development officer. “We expect to add about 200 more luxury and lifestyle projects over the next few years, representing more than $15 billion in investment,” he said.

GROUP HOTELS LIVE

Luxury and lifestyle notwithstanding, Marriott also sees a resurgence of interest in “big box” convention hotels, an industry sector that fell out of favor in the depth of the recession, given the size of the investment these hotels represent, combined with the paucity of available financing.

Targeted for the European market, the first Moxy Hotel (seen here in a prototype rendering) will be located in Milan.

Targeted for the European market, the first Moxy Hotel (seen here in a prototype rendering) will be located in Milan.

Marriott has long been identified with these large group houses, defined as having 1,000 or more rooms, so it made sense that the company’s official 4,000th hotel turned out to be the 1,175-room Marriott Marquis Washington, D.C., noted Noah Silverman, chief development officer for North America full-service hotels.

“The opening of the Washington, D.C. Marquis last month followed the groundbreaking of a 1,000-room Marquis in Houston, which is scheduled to be completed in 2016,” said Silverman.

Marriott also has a 1,003-room Marquis under construction in Austin, Texas, scheduled to open next year. The company is responsible for roughly 30 percent of the industry’s total U.S. new big box pipeline.

With the pace of development accelerating, the Marriott team was asked if the company’s pool of developers, owners and franchisees has grown accordingly. “We already have a large group of owners and developers who support our brands, especially in the select-service and extended-stay categories,” Jacobs said. “Roughly 70 percent to 75 percent of our deals come from existing ownership groups and we expect that to continue.”

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