Skift Travel News Blog

Marriott International on Wednesday debuted Four Points Express by Sheraton, a midscale hotel brand aimed at Europe, the Middle East, and Africa.

The brand aims to target the “midscale” segment of affordable lodging. Marriott estimates that about a half-million independent or locally-branded hotels are in this segment — many of which may be ripe for conversion to a global brand.

The first hotel will be a 52-room property opening later this year in Lara, a district of Antalya in Turkey. Next year, another property in Turkey is likely to open. So is a 201-guestroom property in London near the Euston rail station.

Other hotel groups are also focusing on midscale brands, such as IHG’s Garner,
Hilton’s Spark brand and an upcoming (as-yet-unnamed) extended-stay brand, and Hyatt’s Hyatt Studios extended-stay brand.

Marriott International said it was streamlining its ongoing process of installing charging infrastructure for electric vehicles at its properties by signing a deal with the vendor EV Connect as its preferred EV charging provider for its properties in the U.S. and Canada.

Marriott has already installed roughly 2,400 chargers and charging stations for electric vehicles, and this first preferred vendor approach may help speed up adoption.

“With EV Connect, we can offer properties an end-to-end turnkey service, simplifying the planning, installation, and maintenance processes while simultaneously delivering high-quality service our guests expect,” said Andrew Bodziak, senior vice president of global operations at Marriott.

Owners and franchisees can choose among suppliers. Some Marriott hotels have also installed Tesla Superchargers, for instance. Others provide discounts off the use of ChargePoint charging stations.

Marriott’s move, detailed here, comes at a time of growing interest in the space. Hilton earlier this month said it intended to install roughly 20,000 Tesla vehicle chargers at 2,000 hotels in North America through next year.

The European Union is on track to ban marketing claims such as “climate neutral” by 2026 that scientifically based certification can’t validate.

Claims such as “carbon neutral,” “environmentally friendly,” and “eco” will require companies to verify their products’ merits through third-party certification schemes. 

Travel companies are among the industries that may be affected by the looming ban. For example, airlines may need to change booking interfaces that offer “climate-neutral” flights in exchange for buying carbon offsets supporting projects that lack credibility.

The rules okayed on Wednesday still need formal approval from the European Union parliament and its member states — expected in November. But it would be procedurally rare for the rules to be denied.

The move came on the same day United Nations Secretary-General Antonio Guterres said “humanity has opened the gates to hell” in its failure to stop rising carbon emissions and a forecasted increase in extreme weather.

Selina, a hotel and experiences brand focused on youth travelers, said on Wednesday that its financial metrics were trending in the right direction as it reported earnings results.

In the second quarter, the company generated $52.5 million in revenue, a bump of 15.9% year-over-year. Factors included higher occupancy rates, reductions in corporate overhead, and essentially higher revenue per customer.

The company also narrowed its losses. It reported $700,000 in adjusted earnings before interest, taxes, depreciation, and amortization, compared to a $5.8 million loss in the same period a year ago.

Selina said it was “aggressively executing a comprehensive real estate portfolio optimization plan” that “includes renegotiating all leases through abatements, deferrals, and terminations.”

In the quarter, the company also collected $10 million as the first phase of a planned strategic investment of up to $50 million led by Global University Systems (GUS), which runs for-profit universities. It also drew $10 million under its $50 million credit facility with Latin America’s Inter-American Development Bank (IDB).

Selina’s stock price dipped below $1 last month, where it has remained. If Selina’s stock remains below $1 for about a month, the Nasdaq exchange will issue a notice of a plan to delist the shares from trading. Selina will then have 180 days to push the value of shares higher.

The company aims to report a continued upward trend, which could appeal to investors.

“Selina continues to focus on three key strategic areas: improving cash flow, advancing toward profitability, and building our brand,” said Rafael Museri, co-founder and CEO, in a statement.

The next generation of Saudi Arabian hotels is coming, marked by the opening of the Kingdom’s multi-billion-dollar giga-projects. Marriott is showing what is possible at these spare-no-expense properties: Asking for the highest room rates in the country.

Skift’s Josh Corder reports:

Just two hotel operators are entrusted to introduce Saudi Arabia’s “untouched” Maldives-rivaling Red Sea to international guests: Marriott and IHG. Three of the planned 50 hotels at the $50 billion giga-project open this year, a St. Regis and Ritz-Carlton Reserve from Marriott and a Six Senses from IHG.

For Marriott, it’s familiar territory. The group operates the ultra-exclusive and somewhat secretive Bulgari Resort in Dubai, a vast St. Regis Resort on Abu Dhabi’s Saadiyat Island, and another St. Regis on Qatar’s Marsa Arabia island.

Much like these fellow five-star island properties, Marriott’s St. Regis Red Sea Resort appears to be positioning itself a cut above other hotels in the country. Currently, the property is bookable for stays from February 1, 2024 (the official word is that it will open before the end of 2023). Priced at about $1,600 a night (6,037 Saudi Arabian riyals) a night, it is comfortably one of the country’s most expensive hotels — comparable only to IHG’s Six Senses nearby.

Six Senses The Southern Dunes, The Red Sea takes bookings from November 1, and, with an imposed two-night minimum stay, rates start from about $1,700 a night (6,618 riyals) a night.

Bookings for the ‘Nujuma’ Ritz-Carlton Reserve resort have not yet opened.

The St. Regis will have just 90 keys, all of which will be villas.

While the hotels are said to open this year, they won’t see international guests until 2024. The project’s Red Sea International Airport — also developed by the same company, Red Sea Global — will operate domestic flights this year and international next year. Dubai will be the first overseas destination connected to the new airport.

Made For Mocktails

For this domestic crowd, which will fly in from Jeddah and Riyadh, pricing remains a barrier. In Knight Frank’s Saudi Report 2023, cost was a reason why respondent Saudi travelers would not stay in a hotel in their own country. The survey found that 28% of 25–35-year-olds put it as their biggest barrier, 41% of those up to 45 years old said the same, and 54% of those over 45.

For young Saudis, the thing that put them off most from staying at domestic hotels was restrictions. Alcohol, for example, remains prohibited.

Speaking with the FII Institute earlier this year, Red Sea Global group CEO John Pagano assured that his post-card tourism project “doesn’t need alcohol.”

“Alcohol is not on the agenda,” Pagano said. “I don’t think it’s absolutely necessary. There’s a new industry evolving. The no/low alcohol industry, it’s booming.”

The St. Regis Red Sea Resort will have its own St. Regis Bar, complete with oysters and caviar, live music, and mocktails.

More broadly, Pagano said visitors will discover a changing Saudi Arabia.

“I’ve seen so much change in the five years I’ve been here — it’s incredible,” Pagano said. “Western attire will be perfectly acceptable within the destination. Obviously, if you wander into some of the local towns, we expect people to respect the customs and cultures. Within the resorts, you can wear bikinis without any issue.”

—Story by Josh Corder

From today’s Daily Lodging Report newsletter: Nikkei Asia published an article on Hilton planning to expand its luxury offerings in Asia. Hilton will be bringing its Waldorf Astoria brand to Malaysia, Vietnam, India, and other countries for the first time as part of its plans to open 25 new luxury hotels in the Asia Pacific region over the next few years. That’s up from the 33 luxury hotels it currently runs in the Asia Pacific.

In 2027, Hilton will open India’s first Waldorf in Jaipur, the capital of the state of Rajasthan. Hilton has a management agreement with the Dangayach Group, which will own the hotel.

Hilton is also bringing Waldorfs to Kuala Lumpur, Malaysia; Hanoi, Vietnam; and Sydney, Australia. In China, Hilton will add its top-of-the-range hotels in Xi’an and Shanghai, while Japan’s first Waldorf will open in Osaka in 2025, followed by Tokyo in 2026.

JLL estimates that the Asia Pacific region has 560,000 luxury hotel rooms, a number that is expected to increase by 90,000 in 10 years.

See Skift’s story on Hilton’s Asia Pacific expansion for context.

U.S. hotel developers have more projects for extended-stay properties than any other type of hotel, whether measured by number of projects or room count, according to new data.

In the second quarter, developers expanded their pipeline of extended-stay projects by 18% year-over-year to 2,083, said Lodging Econometrics, which collects and studies hotel development.

The extended-stay category had growth outpacing lifestyle, soft-branded, traditional limited-service, and generic full-service properties, as measured by property count and room count. Lodging Econometrics created this chart to illustrate:

One caveat: A segment that was hard to count because it’s so small was independent boutiques.

For independent boutiques only, CoStar’s STR counts 4,227 rooms in construction, with 2,338 rooms projected to open in 2023. That’s a 2.8% year-over-year growth in supply. There are only 16,565 rooms in the indie boutique pipeline.

Accor said on Monday that it had named Gilda Perez-Alvarado as its group chief strategy officer in charge of overseeing global strategy, relations with hotel owners, and strategic partnerships.

Since 2004, Perez-Alvarado has been at the hotel brokerage firm JLL Hotels & Hospitality, working her way up to become its Global CEO. She’s intimately familiar with the sector’s biggest owners and investors, such as sovereign wealth funds, private equity, global brands, family offices, and ultra-high-net-worth individuals.

Perez-Alvarado has spoken about real estate and capital markets at multiple industry events, including at Skift’s Future of Lodging Forum. She will start her new role on October 1, becoming a member of Accor’s management board.

Hyatt gave details on Wednesday about the first locations for Hyatt Studios, a brand it unveiled in April. The hotel operator will open the first Hyatt Studios just outside of Mobile, Alabama, and Marysville, California — targeting spots where its other brands aren’t present.

“We’ve learned that when Hyatt guests stay with a competing brand, they appear to do so for one of two reasons: the absence of a Hyatt hotel within five miles or the choice to stay at a lower chain scale,” said Dan Hansen, global head of Hyatt Studios. “By enabling guests to choose a Hyatt hotel in new markets, we grow brand loyalty without intra-brand competition and present more white-space options to developers.”

The company’s “upper-midscale” extended stay brand anticipates opening its first new-build property late next year.

In the port city of Mobile, Hyatt is franchising the brand to 3H Group, founded by Hiren Desai. The port city has tourism, manufacturing, aerospace, and the corporate offices of retailers — all likely to have workers and visitors making multi-day stays and preferring non-budget lodging.

In downtown Marysville, Hyatt founded a franchisee in Presidio Hotel Development. The spot isn’t far from the capital of California, Sacramento.

IHG Hotels & Resorts revealed on Tuesday that it has been pitching hotel owners on a new brand addressing an opportunity in the middle of the market it said is underserved.

“Our aim is that this new conversion brand will become the first choice for guests and owners in the midscale segment, accelerating our growth in a space that is already worth $14 billion in the U.S. market alone,” said CEO Elie Maalouf during remarks tied to the company’s quarterly earnings.

The Windsor, UK-based hotel group — whose brands include Holiday Inn, Crowne Plaza, and Six Senses — didn’t reveal the name of the new brand, which has become IHG’s 19th brand, or other details.

“We’re delighted that more than 100 hotels have already expressed definitive interest in the new brand,” Maalouf said.

Designed for Fast Growth

Maalouf likely wanted to prioritize a conversion brand over a new construction brand to help address IHG’s need to maintain steady growth in its hotel pipeline.

Unlike new-build brands that take time to grow because of construction delays, conversion brands can expand quickly, especially as many independent hotel operators or owners of properties flagged with older brands seek a refresh.

“Conversions represent a major growth opportunity for us, generating around 40% of first-half openings and signings globally,” Maalouf said.

Addressing the Mid-Market

The new brand is Maalouf’s first big move as CEO, having taken the top job last month.

Maalouf had previously led the group’s North American business for 8 years. During that time, he showed an interest in mid-market growth.

Maalouf led his team in debuting the new brand Avid, in 2017, which he said at the time targeted “a vastly underserved $20 billion segment of the U.S. midscale market.” Avid charges roughly $10 to $15 a night less than Holiday Inn Express, IHG’s midscale leader, and less than Candlewood Suites, IHG’s other mid-scale brand. (The difference in market size figures Maalouf has quoted refers to different segments of the overall mid-market.)

Given Maalouf’s sense that the mid-market is underserved, he has prioritized putting another IHG brand on the grid. That said, IHG’s board (on which he’s been a member for years) approved of this initiative before Maalouf became group CEO.

The hotel franchisor already has upper midscale with Holiday Inn and Holiday Inn Express, so the new brand is likely more affordable.

IHG expects to target around a 25% lower cost per room to convert to the new brand than that for Holiday Inn Express.

Facing Rivals

IHG’s rivals have also been looking at the middle of the market.

• In June, Marriott International said it would expand into the “affordable midscale” hotel category in North America with a new hotel brand — which it hasn’t yet named. The move came after earlier this year, when it completed its acquisition of City Express, a midscale brand focused on Latin America.
• Hilton CEO Christopher Nassetta said in his second-quarter earnings call that the “mid-market” was what he coveted long-term. “We’re not ashamed of saying we have every intention to have the best brands in every market to serve the mid-market because we think that’s where the most money will be made over the next ten or 20 or 30 years,” Nassetta said.
• In May, Hyatt unveiled a new brand, Hyatt Studios, in the upper-midscale segment.

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