khabah

Marriott has announced that it is to acquire the 152-hotel City Express portfolio, currently present in 75 cities across México, Costa Rica, Colombia and Chile, as part of its push into the midscale space and will join the company as its 31st brand. The transaction cost 100 million USD and is expected to close in late 2022/H1 2023, at which point Marriott will rename the brand "City Express by Marriott."

khabah

***

Marriott International to Acquire City Express Brand to Fuel Growth in Affordable Midscale Segment

OCTOBER 19, 2022 — BETHESDA, MD

Marriott poised to become the largest hotel company in the Caribbean and Latin America, expanding its presence significantly in secondary and tertiary markets in the region

Marriott International (NASDAQ: MAR) announced today that it has reached an agreement with Hoteles City Express, S.A.B. de C.V. (BMV: HCITY) to acquire the highly regarded City Express brand portfolio, marking Marriott’s entry into the affordable midscale segment with its 31st brand.

The portfolio is currently comprised of 152 hotels, including 17,356 rooms across 75 cities in Mexico and three additional countries in Latin America. Upon closing of the transaction, the brand and hotel portfolio will become part of Marriott’s franchise system. Marriott will also acquire the franchise rights to five under-construction projects in the pipeline, representing an additional 676 rooms. Marriott expects to update the brand name with its signature “by Marriott” endorsement.

Under the terms of the agreement, Marriott will pay $100 million for Hoteles City’s brand portfolio (City Express, City Express Plus, City Express Suites, City Express Junior, and City Centro), associated trademarks, domains and related intellectual property, the City Premios loyalty program, and other assets and liabilities related to the brand. Stabilized franchise fees are anticipated to be approximately $10 million for the existing portfolio.

As the largest hospitality company in the world, Marriott has a proven track record of growing regional brands by utilizing its global development engine as well as its extensive programs and revenue systems, such as the award-winning Marriott Bonvoy® loyalty platform and innovative digital travel programs including Marriott.com and the Marriott Bonvoy mobile app. The transaction is expected to make Marriott the largest hotel company in the Caribbean and Latin America (“CALA”), increasing its presence in the region by 45 percent, to 486 properties across 37 countries. Given the high-growth nature of the affordable midscale segment, the company sees a meaningful opportunity to further expand the City Express by Marriott brand in the CALA region, as well as in other locations.

“This transaction with Hoteles City Express is a strategic win for Marriott and our customers, associates and owners and franchisees,” said Anthony Capuano, Chief Executive Officer, Marriott International. “We’re excited to enter a new lodging category – the popular affordable midscale segment where we see significant potential. With City Express by Marriott, we will be providing our customers with more choice through a new, approachable, moderate-priced offering, increasing opportunity for owners and franchisees as well as associates.”

Hoteles City Express is a Mexico-based company founded in 2002 by Luis Barrios. The company’s brand portfolio provides customers a range of mid-scale properties that include urban, suburban, and extended stay offerings in Mexico, Costa Rica, Colombia, and Chile. With exceptional brand recognition among Latin American travelers, the brand has been awarded the prestigious designation of “Marca Notoria” in Mexico for its hospitality sector leadership and brand recognition.

“When we started thinking about City Express, we were convinced that a modern, efficient, and affordable brand would be very attractive to the local traveler. After our first 20 years, we are very excited and honored to work alongside Marriott, a company we’ve always admired, to take the brand to the next level,” said Luis Barrios, CEO of Hoteles City. “After having the opportunity to work with the Marriott team, we confirmed that we share common cultural values and a similar approach to hospitality.”

“Our goal is to be everywhere our guests want us to be, with the right property in the right location and at the right price point,” said Brian King, President, Caribbean and Latin America, Marriott International. “This transaction with Hoteles City Express will expand our ability to do exactly that – initially in CALA, with opportunity around the world. We can’t wait to welcome City Express’s customers and continue the tradition of high-quality hotels and authentic hospitality established by Luis Barrios and his team.”

The closing of the transaction is subject to various customary conditions, including the approval by COFECE. Marriott expects the transaction could close between the end of 2022 and the first half of 2023.

lowfareair

Big-ish meh here. City Express is a Tru by Hilton and the City Express Suites are pretty damn close to a TownePlace Suites.

If any hay should be made of this, those afraid of Marriott focusing too much on the midscale vs luxury should be a bit more worried, whereas I just wish Marriott would consolidate brands to a clean 20. 😉

Tanic

Whew, back to 31 brands. What ever happened to BVLGARI?

Horace

I can see Marriott expanding the footprint of City Express by Marriott beyond México, Costa Rica, Colombia, and Chile to other Central and South American countries. It will be interesting to see if Marriott expands beyond that region.

Protea has remained only in Africa, but Delta Hotels has expanded far beyond Canada and AC Hotels has expanded far beyond Spain (and a few other European countries).

I would not be surprised to see City Express by Marriott pop up in the United States and elsewhere, with Marriott differentiating City Express from its other select-service brands — and thus having another brand to franchise.

Bulgari (or BVLGARI per its pretentious logo) is included when there's a list of all Marriott brands, but excluded when there's a list of all Marriott Bonvoy brands (because Bulgari does not participate in Marriott Bonvoy).

Xiaotung

Is this going to be Marriott's lowest price point brand at $50-60 a night?

DallasEsq

I was just telling someone the other day Marriott didn't have enough brands already.

Horace

In Mexico, yes.

But if the brand moves north of border, the pricing might be more like Moxy -- or more, if the rooms are bigger than Moxy rooms.

If there's ever a City Express by Marriott in the San Francisco Bay area, would expect a night to cost as much as a week at a City Express in Mexico.

PES_B1

30USD Aloft disagrees👿

Schnit

"affordable midscale" huh? I guess that means grosser than your average midscale hotel?

VibeGuy

I see City Express as being in the same space in Mexico where Courtyard was in the US at the inception: a consistent quality limited-service experience. There aren’t a ton of other properties in that space, at least in my experience in Yucatán, Campeche and Jalisco. There’s a lot of Mexico outside the coastal resorts and CDMX that is interesting and/or beautiful where I’d like an option in that price range.

AvalancheZ71

Will this mean more elites that spend less that will convert over and devaluate Mariott Bonvoy even more?

cbellero

While looking at hotel options for a visit to Rio, I stumbled across this hotel from the brand "City Express Hoteles". How does this apparently new brand fit into the scheme of things in relation to loyalty recognition? Do they even participate in Bonvoy at all?

I am mostly interested if I can choose breakfast as an amenity.

https://www.marriott.com/en-us/hotel...juca/overview/

cbellero

I found this press mention over at loyalty lobby:

https://loyaltylobby.com/2022/10/19/...xpress-hotels/

cbellero

And here is the official Marriott announcement:

https://news.marriott.com/news/2022/...dscale-segment


I am guessing that it will be a while before they are integrated into the Marriott program. Perhaps someone can comment if stays will at least attract elite night credit.

Xiaotung

Looks like the acquisition is well under way. I was going to make some bookings for April under the City Express' own loyalty program hoping that the program would be merged into Bonvoy and Elite nights combined but that program is not easy to join. Maybe I don't need to do that anymore.