NEW YORK—Brand extension is nothing new to Marriott International, which now boasts nearly 20 flags in its portfolio, but the recent launch of AC Hotels represents the first time the company has imported a brand from outside the U.S.
Having identified the need for a more focused brand for the younger, more design-savvy millennial market in the U.S., Marriott opted to look no further than its joint venture deal from 2011 with AC Hotels, a brand with some 79 properties in Spain, Portugal, France and Italy. The Madrid-based brand bears the initials of founder Antonio Catalan, who created it in 1998.
Marriott International President/CEO Arne Sorenson discussed the decision to bring AC Hotels into the company’s U.S. collection at its formal launch at the NYU
Conference here earlier this month. “We heard our partners in the U.S. say we would like you to bring a product that has more design flair and appeals more to Gen X and Gen Y because we feel like products in that space in the U.S. are not successful enough. This is a place where we think it’s important that you be,” he said.
The company believes Gen X and Gen Y business travelers have been underserved and cited research that indicated that business travelers, ages 21 to 49, who make three or more business trips per year, spend $34 billion on hotel rooms.
With a tagline of “stylish hotels for urban spirits,” the upscale brand is positioned to compete against chains such as Starwood’s Aloft and Element, as well as IHG’s Even Hotels and Hotel Indigo brands. Marriott is targeting top 20 travel markets like Miami, Los Angeles, Chicago, Houston, Philadelphia and New York for the new urban lifestyle brand, which is positioned with Edition, Autograph Collection and Renaissance Hotels under the company’s Lifestyle/Collections umbrella.
The brand targets travelers searching for a design-led hotel, and includes European-inspired aesthetics, said the company. For example, the lobbies will feature a contemporary design infused with stylish elements. Each hotel’s lobby will also include a Workspace on Demand and a healthy crafted small-plate breakfast buffet. Meanwhile, the AC Lounge will offer light fare, cocktails and beverages. Complimentary WiFi will be offered throughout each property as well. The company noted the guestrooms will also feature a sleek, European design and luxurious, modern bathroom amenities, as well as 42-in. flat-screen TVs.
Sorenson spoke of the origin of the brand and what sparked Marriott’s original interest in becoming a joint venture partner. “When we saw the opportunity to partner with him [Catalan] a couple of years ago, we saw in the hotels that were part of the AC Hotels system a very tight design and a very great service module. It looked like something that would give us an entrée into Spain, Portugal, and Italy, where we were really lightly represented,” he said.
Sorenson, who maintains the brand brings a “European sensibility,” is now touting its growth potential domestically. “We think we can add hundreds of these hotels in the U.S. in the years ahead,” he said.
As such, he added that while the company is unable to announce any official deals at this time, the pipeline is expected to fill up rapidly. “There are a couple of dozen specific projects that we are in discussion with our partners about in the U.S. Whether we get a couple of dozen signed by the end of the year or not will depend a little bit on the legal process,” he said.
Catalan, for his part, called the nascent U.S. brand a “new beginning and new chapter.” In addition, he touted the expertise his firm brings. “Our designs are very unique, very sophisticated. For every metric measurement, we add extra flair and an extra urban feel for it. I think it’s going to be the most enjoyable Marriott brand,” he said.