Dim Outlook for Biz Travel Drove Hotel Owner to Drop Branding on 200 Marriott and IHG Hotels
Photo Credit: A slow business travel recovery means less value linking with bigger hotel brand loyalty programs, says the real estate CEO leading a 200-hotel portfolio away from Marriott and IHG. Sonesta International Hotels Corp.
Skift Take
Service Properties Trust has to do what’s best for shareholders, and maybe that includes severing ties with Marriott and IHG. But don’t rule out a business traveler rebound, especially with a vaccine looking more likely in the new year.
Two of the most notable U.S. hotel transactions during the pandemic went against the industry’s leading ideology that bigger brand affiliation will be better coming out of the downturn.
Leaders at Service Properties Trust, or SVC — the hotel owner pursing smaller brand affiliation — are finally giving their reasons why.
SVC severed management agreements with IHG and Marriott after both global hotel companies defaulted on property guarantee payments earlier this year. The real estate trust plans to transfer flag affiliation on all of the roughly 200 hotel portfolio to Sonesta International Hotels Corp., a smaller brand in which SVC owns 34 percent.
Analysts and even Marriott CEO Arne Sorenson have questioned the investment logic in such a move, but SVC leaders say it all comes down to money and a negative view of the future of business travel.
“I think probably every finance and accounting team in corporate America and worldwide are looking for some of the silver lin
