Marriott signed a deal with Hoteles City to purchase the City Express brand portfolio for $100 million. Marriott has entered the inexpensive midscale category with this move.
City Express, City Express Plus, City Express Suites, City Express Junior, and City Centro, as well as associated trademarks, domains, and related intellectual property, the City Premios loyalty program, and other assets and liabilities, comprise the City Express brand portfolio. The present portfolio’s stable franchise fees are estimated to be about $10 million.
As of now, the portfolio includes 152 hotels, totaling 17,356 rooms spread throughout 75 cities in Mexico and three Latin American countries, as well as 5 under-construction projects totaling 676 rooms. It will become part of Marriott’s franchise system once the deal is completed (expected between the end of 2022 and the first half of 2023). The hotel firm intends to modernize its brand identity by adding the words “by Marriott.”
Marriott has become the largest hotel firm in the Caribbean and Latin America as a result of its purchase. Its CALA portfolio will grow by 45% to include 486 properties around the area. Because of the rapid growth of the cheap midscale market, Marriott has designated CALA as the main target for expanding the City Express by Marriott brand even further.
The American behemoth is not alone among its North American counterparts in focusing on the Caribbean and Latin America. Wyndham just hired Gustavo Viescas as its new President of Latin America, with the responsibility of overseeing and increasing the region’s portfolio of 250 hotels. Choice Hotels announced a $675 million acquisition of Radisson Hotels Americas in August of last year, adding 67,000 keys spanning the United States, Canada, Latin America, and the Caribbean to its portfolio.
This rise can be explained in part by CALA’s high development potential. A sense of security and proximity to home for North American gamers in a world that appears to be closing in on itself might be fuelling the region’s new interest. The transaction is still subject to usual conditions, including clearance from Mexico’s Federal Economic Competition Commission (Cofece).
“This transaction with Hoteles City Express is a strategic win for Marriott and our customers, associates and owners, and franchisees. 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 choices through a new, approachable, moderate-priced offering, increasing opportunity for owners and franchisees as well as associates.” Stated Anthony Capuano, CEO of Marriott International.
“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. After having the opportunity to work with the Marriott team, we confirmed that we share common cultural values and a similar approach to hospitality.” Commented Luis Barrios, CEO of Hoteles City.