Marriott to Acquire City Express Brand, Adding 152 Hotels in Latin America
Update (Mar 10, 2023) – Marriott International today announced that it has received approval from Mexico’s Federal Economic Competition Commission, COFECE, for the acquisition of the City Express brand portfolio from Hoteles City Express, S.A.B. de C.V., paving the way for the company’s entry into the affordable midscale segment.
Original article (Oct 19, 2022) – Marriott announced today that it has reached an agreement with Hoteles City Express, S.A.B. de C.V. to acquire the City Express brand portfolio, which would be the company’s 31st brand.
The City Express portfolio is currently comprised of 152 hotels, including 17,356 rooms across 75 cities in Mexico and three additional countries in Latin America. Upon closing of the transaction, 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 expects to update the brand name with its signature “by Marriott” endorsement.
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, increasing its presence in the region by 45 percent, to 486 properties across 37 countries. Given the high-growth nature of the affordable midscale segment, the company sees a meaningful opportunity to further expand the City Express by Marriott brand in the region, as well as in other locations.
Hoteles City Express is a Mexico-based company founded in 2002 by Luis Barrios. The company’s brand portfolio provides customers a range of mid-scale properties that include urban, suburban, and extended stay offerings in Mexico, Costa Rica, Colombia, and Chile. The brand has been awarded the prestigious designation of “Marca Notoria” in Mexico for its hospitality sector leadership and brand recognition.
The closing of the transaction is subject to various customary conditions, including the approval by COFECE. Marriott expects the transaction could close between the end of 2022 and the first half of 2023.
DDG
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