21 July 2018

Marriott Hopes Small Rooms Are Big Draw

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One of the world’s biggest hospitality companies is trying to win new business with small hotel rooms. Marriott International Inc. is preparing in the U.S. to launch its 18th brand: Moxy, a lifestyle hotel with 183-square-foot standard rooms–compared with the industry’s typical 250 to 300—and spare design that features concrete floors, exposed columns and “industrial-chic” furniture.

While Marriott already has opened a Moxy in Milan, it is gearing up for one of its most aggressive launches at home. The company says it has approved franchise agreements with eight hotel investors for new properties in major cities, including New York, San Francisco, Seattle and New Orleans. It also has a pipeline of about 20 hotels in Europe, from Munich to London.

The Bethesda, Md., hotel company, with more than 4,100 properties worldwide, is the first of the big global chains to pursue a microhotel strategy, which combines modest-size rooms with high design and a lively bar scene. Some of the existing operators in this segment, including Yotel, Pod Hotel and CitizenM, have had success in Manhattan and are looking to expand to other U.S. cities.

It remains to be seen whether the microhotel concept can work nationwide. The brands operating in the U.S. draw heavily from foreign travelers and might make the most sense in markets like New York, where land is expensive and the properties can pack in more guests than traditional hotels.

Moxy also is the latest effort by the 88-year old hotel operator, long known for its business hotels and conservative approach, to reposition itself as a more modern company that can appeal to a younger generation. That recent push includes Marriott’s Edition boutique brand, a collaboration with hotelier Ian Schrager, and AC Hotels, a venture with a Spanish company.

Marriott is rolling out Moxy simultaneously in Europe and the U.S., though with vastly different approaches to construction. Overseas, Moxy is partnering with Dutch real-estate developer Vastint to build rooms in a factory, then stack them at the hotel site. This modular approach costs less and completes the building in six months, or about a quarter of the time it takes for ground-up construction.

In the U.S., where modular construction has yet to catch on with most hotel owners, Marriott will rely primarily on new construction, or the conversion of other types of properties to Moxy. The U.S. hotels will feature 160 to 200 rooms, usually without a restaurant but with a full bar and an open-all-night grab-and-go food offering. Moxy designers include Yabu Pushelberg, a firm that has worked on high-end hotels.

Marriott plans an average daily room rate of around $240 for Moxy’s New York properties. That is roughly in line with its microhotel peers but a little below the city’s average rate, which STR Inc. said was $260 for the first 11 months of 2014.

Moxy has a few new touches of its own. For hotel guests who worry about stubbing their toes on the way to the bathroom at night, the new hotel will offer motion-sensor lights under the bed that light up when activated.

Click here to access the full article on The Wall Street Journal. 

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