In trying times where inflation is rising and the uncertainty of a recession shrouding the market, it seems unlikely that firms would invest in the vacation and travel markets. In a time where everyone is counting their shekels, Marriott International sees the opportunity that has been highlighted throughout 2022.
Marriott International has acquired Hoteles City Express, the provider of the regarded City Express brand portfolio with over 152 hotels with 17,300 rooms across 75 cities in Mexico, Costa Rica, Colombia and Chile for $100 million.
The firm will acquire the brand and hotel portfolio as well has five currently under-construction projects which will be updated to include the “by Marriott” signature endorsement. The acquired properties and brands represent the firm’s entry into the affordable midscale segment and will make the firm the largest hotel company in the Caribbean and Latin America (CALA).
“This transaction with Hoteles City Express is a strategic win for Marriott and our customers, associates and owners and franchisees,” says 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.”
The deal comes at a time when despite the conventional wisdom of a fear of recession causing consumers to spend their disposable income elsewhere, the hotel and lodging industry is seeing sustained momentum in a post-pandemic boom.
Earlier in 2022, HHM increased its hotel property portfolio by 30 percent in its purchase of Urgo Hotels & Resorts, Choice Hotels International acquired Radisson Hotel Group for $675 million and in May, Brookfield Asset Management acquired Watermark Lodging Trust’s 25-hotel portfolio.
“We’re seeing a growing share of wallet going towards ‘experiences’ versus ‘things,’ which has been happening for some time now,” Harris Williams managing director Will Bain previously told Mergers & Acquisitions. “Overseas travel in particular has seen a good recovery since the pandemic, and exciting new concepts continue to emerge in other recreational and experiential areas.”
The deal establishes Marriott with 486 properties across 37 countries in the CALA region with the firm seeing an opportunity to expand given the high-growth nature of the affordable midscale segment.
Is anyone planning a vacation soon? Let me know if you think the hospitality industry is poised to continue this growth despite market conditions at [email protected].