Marriott vs. Hilton: What Their 2024 Hotel Pipelines Reveal

26.01.2024 - 14:27 / skift.com / Sean Oneill / Marriott International / Barry Sternlicht / Hilton Hotels

Marriott and Hilton joined all the major hotel groups this week in providing updates on their hotel development pipelines as they gathered at the Americas Lodging Investment Summit (ALIS) in Los Angeles.

Here are the biggest takeaways:

Skift Take: Marriott previewed StudioRes last June and officially launched it in August. So it’s mildly disappointing that, in January, it’s only reporting “potential deals” rather than actual contracts.

Has Marriott set up this brand for success in wooing owners? Its sales team receives compensation for completing deals, and the incentives for selling this midscale brand are lower than for the fancier products.

That may lower the motivation to get StudioRes properties signed. However, Marriott’s recent move to lower the cost to owners of flagging with StudioRes may help generate seller interest.

On the luxury side, this week’s surprise was Marriott executives talking up the W brand of luxury hotels. Fashionable frequent travelers have liked to gripe that W has lost its mojo since Marriott acquired it in 2015. (When hotel impresario Barry Sternlicht’s team originally created the brand, they chose W as a brand partly to symbolize an upside down “M” – a signal that it would be the opposite of a Marriott in coolness.)

Marriott execs touted this week that they’ve devised a successful formula that works for guests and owners. Despite ordinarily being an asset-light company, Marriott bought the W Union Square in New York and has used it as a prototype for reinvention that it will formally unveil in June. Owners seem interested, given that W hotels have opened recently in Rome, Budapest, the Algarve in Portugal, and Chengdu in China.

As for Apartments by Marriott Bonvoy, it’s been a year since the brand launch, and it’s only opened one: Casa Costera, Isla Verde Beach, in San Juan, Puerto Rico. That feels like a slow pace of openings, deal talks, and contracts for a brand that involves conversion, rather than new construction.

The company touted that it has lots of “organic” growth, rather than growth through acquisitions. But roughly a third of its organic growth in the U.S. came through a licensing deal with MGM Resorts that is temporary and mainly just a loyalty program tie-up.

Marriott has a lot going for it on multiple fronts, but its hotel pipeline picture may be slightly underperforming what’s possible.

Skift Take: Of all the hotel brands that have recently launched, Spark had the most buzz at the ALIS event. Hilton executives said about 400 deal talks for Spark are underway — higher than all the other recent launches by other companies. Executives also said a majority would be re-brandings of hotels currently flagged with Wyndham, Choice, and BWH (Best Western).

Lik