Marriott executive Brian King said the design-led brand will meet an underserved need in the select-service segment in the U.S.
ORLANDO, Florida—For the first time in the company’s history, Marriott International is importing a hotel brand into the North American market.
AC Hotels by Marriott, which has a footprint of 79 properties in Spain, Italy, Portugal and France, will launch first in the United States’ top 15 travel markets before expanding to other urban, metro areas throughout the country and the rest of the Americas, said Brian King, global brand officer for Marriott Endorsed Brands.
“You import wine. You import commerce. Why can’t you import a hotel?” he said during a press roundtable at the Marriott’s GM conference Sunday evening.
The announcement comes less than two years after Marriott and AC Hotels formed a joint venture combining AC founder Antonio Catalán’s design aesthetic with Marriott’s global distribution system.
It also represents the first select-service brand Marriott has launched in the U.S. in 15 years, King said.
“From an owner perspective, you’re able to operate these really, really efficiently. The cost to build is lower than a full-service hotel,” he said. “The owner interest that we have had is like nothing we’ve seen before.”
While no official deals have been announced thus far, King said advanced discussions are proceeding for AC properties in San Diego, Miami and New York. Regardless of location, the first hotel will open no later than the fourth quarter of 2014, he said.
|AC Hotel lobbies feature curated pieces of art. (Pictured: AC Hotel Recoletos, Madrid)|
There should be 300 AC Hotels across the brand’s entire portfolio within 10 years, King said.
Expansion in the U.S. will come from a mix of new builds and conversions with an average cost per key between $100,000 and $110,000, he said, adding Marriott is still working through that cost exercise.
As a select-service product, AC Hotels will play in the same space as Marriott’s SpringHill Suites and Courtyard brands. King downplayed any concerns about cannibalization in that moderately priced segment.
“We’re not going to build a brand if we don’t believe there is a market,” he said. “There is a market for this design-led sensibility that consumers are seeking out.”
AC Hotels serves guests looking for a sleeker, more chic experience in their select-service hotel stays. The brand’s public spaces will feature a bistro and bar, as well as a curated collection of locally sourced art that gives the vibe of a trendy art house or museum.
“The functionality of the lobby, while important, will always hide behind the form,” King said.
The brand will complement the rise of Generation Y travelers perfectly, he said, noting the $35-billion market of younger business travelers who make three or more business trips a year. “Our brands today don’t fully meet that need.”
While several boutique offerings have emerged in the space, what has been missing is a trusted offering from a global chain, King said. Several of Marriott’s competitors have tried in recent years, but those attempts have failed to gain traction—and, more importantly, scale.
The reason, King said, is because the art didn’t match the science. While those competitor brands might have been design-led, they lacked the sound operating models and returns to entice owners. AC Hotels by Marriott blends the two disciplines.
“We understand the science of the economics really well,” he said.
The result should be rapid adoption in the U.S. and the rest of the Americas as well, he said.
“It’s been more of a trickle,” King said of competitor chains’ efforts in this design-led space. “I’m looking for a tidal wave.”