Marriott has reached an agreement to acquire the
City Express brand portfolio, marking Marriott’s entry into the
affordable midscale segment with its 31st brand.
The City Express portfolio currently comprises of
152 hotels, including 17,356 rooms across 75 cities in Mexico and
three additional countries in Latin America.
Upon closing of the transaction with with Hoteles
City Express, 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 has indicated that it plans to update the
brand name with its signature “by Marriott” tagline.
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.
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.
“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.”
Founded in Mexico in 2002 by Luis Barrios, the Hoteles
City Express brand portfolio
provides customers with a range of mid-scale properties that include
urban, suburban and extended stay offerings in Mexico, Costa
Rica, Colombia and Chile.
“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.”
The closing of the transaction is subject to
various customary conditions, including the approval by COFECE.
Marriott expects the transaction to close between the end of
2022 and the first half of 2023.
