Marriott moves into apartment business

Marriott International is adding upper-upscale and luxury apartment-style rentals to its brand mix with Apartments by Marriott Bonvoy. The move to compete with the likes of Airbnb and other serviced-apartment brands comes at a time when “bleisure,” multi-generational and digital nomad travel trends continue to expand.

The product, initially being launched in the U.S. and Canada, will differentiate from more traditional extended-stay products and will try to reflect local neighborhoods for independent travelers seeking more space and residential amenities. Apartments will feature a separate living room and bedroom, full kitchen, and in-unit washer and dryer, but will not provide traditional hotel services such as food and beverage, meeting spaces, and retail.

Noah Silverman, head of North American development for Marriott, told HOTELS that the brand will attract longer-stay guests and therefore expects stays to be more than three nights. He would not commit to an expected ADR, only calling it “compelling,” and would not make any projections for growth at this time.

“We believe it [this franchise opportunity] will be very attractive based on the operating model and the advantages of developing properties with Marriott.” — Noah Silverman

Marriott said it wants to offer developers the flexibility to build new properties or convert existing properties, with a design approach similar to the company’s Autograph Collection and Tribute Portfolio lodging brands. Of course, the new brand will become a part of Marriott’s reservations engine and loyalty program, Marriott Bonvoy.

Silverman said that this a franchise opportunity for developers. “We believe it will be very attractive based on the operating model and the advantages of developing properties with Marriott,” he said.

Silverman added that the operating model will make Apartments by Marriott Bonvoy attractive to both developers of traditional apartments and serviced apartments as it can encompass an entire building or specific floors.

Marriott is no stranger to this business model as for 26 years it has operated Marriott Executive Apartments, its serviced-apartment brand in Asia, Europe, Middle East, Africa, and Latin America. That experience is expected to enhance opportunities in North America.

“We are also building upon our learnings from 26 years of successfully operating Marriott Executive Apartments,” Silverman said. “In addition, Apartments by Marriott Bonvoy will be fully backed by Marriott’s distribution network and the 173 million Marriott Bonvoy members.”