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Marriott to acquire Mexico’s City Express brand to fuel growth in Midscale segment

Marriott International has announced that it has reached an agreement with Hoteles City Express to acquire the City Express brand portfolio, marking Marriott’s entry into the affordable Midscale segment. This will be Marriott’s 31st hotel brand.

City Express’ portfolio is currently comprised of 152 hotels representing 17,356 guest 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 guest rooms. Marriott adds that it “expects” to rename the brand 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 (“CALA”), increasing its presence in the region by 45%, to 486 properties across 37 countries. The hospitality company adds that it sees a meaningful opportunity to further expand the City Express by Marriott brand in the CALA region, as well as in other locations, given “the high-growth nature of the affordable midscale segment”.

This transaction with Hoteles City Express is a strategic win for Marriott and our customers, associates and owners and franchisees. 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.

said Anthony Capuano, Chief Executive Officer, Marriott International.

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. With exceptional brand recognition among Latin American travelers, the brand has been awarded the prestigious designation of “Marca Notoria” in Mexico for its hospitality sector leadership and brand recognition.

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. After having the opportunity to work with the Marriott team, we confirmed that we share common cultural values and a similar approach to hospitality.

said Luis Barrios, CEO of Hoteles City.

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. 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.

said Brian King, President, Caribbean and Latin America, Marriott International.

The closing of the transaction is subject to various customary conditions, including the approval by COFECE. Marriott says that it expects the transaction could close between the end of 2022 and the first half of 2023.

Featured image by Marriott

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