Marriott to Launch Hotel Brand for Budget-Minded Extended-Stay Guests

25.08.2023 - 13:31 / skift.com / Leeny Oberg / Sean Oneill / Marriott International

Marriott International said Monday it would expand into the “affordable midscale” hotel category in North America with a new hotel brand — which it hasn’t yet named. The world’s largest hotel company said it hopes the new brand will appeal to guests seeking extended stays, typically at least 15 days.

“We’re in discussions with owners for more than 250 new development opportunities under this brand,” said Leeny Oberg, Marriott’s chief financial officer and executive vice president, development.

Concord Hospitality, a hotel development and management company based in North Carolina, and Whitman Peterson, a real estate private equity company in California, plan to work with Marriott to break ground on three properties under the new brand this year. They expect openings in late 2024 or early 2025.

The new brand will be Marriott’s 32nd. (Read Skift’s explainer on Marriott’s brand family for context.)

It stands out mainly on its price for guests and costs for developers. Marriott’s other long-stay brands typically charge higher rates and involve higher costs to build and run.

“The prototype model targets a build cost of $13 million to $14 million, requiring approximately 54,000 square feet of total building area for 124 studios,” the company said in a statement.

The latest brand signals that the world’s largest hotel may be expanding “downmarket” to attract more price-conscious travelers.

The new brand will target an $80 a night rate and compete with other “affordable midscale” brands — an industry category in-between budget, or “economy,” hotels and premium, or “upper-midscale,” hotels. Examples of affordable midscale brands include IHG’s Candlewood Suites and Hawthorne Suites by Wyndham.

In other words, Marriott’s new brand will be the company’s most affordable cost-per-room hotel brand in the U.S. and Canada. In Latin America, Marriott’s just-acquired City Express by Marriott — currently in Mexico and a few other countries — is cheaper in absolute dollars in its local markets.

Marriott’s other brands with mainly long-stay guests include Apartments by Marriott Bonvoy, which it just announced in November for the premium and luxury segments. They also include Residence Inn by Marriott, Element by Westin, TownePlace Suites by Marriott, and Marriott Executive Apartments.

Marriott’s latest entry into extended stay follows in the wake of activity from its rivals as sector leaders believe blended travel is here to stay.

In April, Hyatt announced an extended stay brand. Since October, Wyndham launched ECHO Suites by Wyndham, and BWH launched @Home by Best Western.

Roughly a third of the construction pipeline for hotels in the U.S. is extended-stay projects, or roughly 30 percent of planned rooms, according