Bits: Marriott completes citizenM acquisition, Accor hits Las Vegas

News in brief:

Marriott completes the acquisition of citizenM hotels

Marriott’s acquisition of citizenM hotels for $355 million has reached legal completion.

It’s a complex structure. Marriott is only buying the brand itself.

The selling shareholders will continue to own the actual hotels (or hold the leases, if they do not own the building outright) and operate them. As a result, Marriott will get $30 million per year in franchise fees from the existing hotels and three ‘under construction’ for an immediate 8% return on investment.

Fundamentally, for the sellers, the $30m paid per year in franchise fees should net off with gains elsewhere. Assume an uplift in occupancy from being part of Marriott, a shift from expensive online travel agents to marriott.com for bookings and a cut in back office staff and it should even out – and the founders still have $355m for selling the name.

(I have heard that citizenM has already made substantial job cuts following the Marriott deal. A lot of sales and branding people are no longer needed.)

The hotels will be added to Marriott Bonvoy between September and December. If you stay in one now you will NOT receive any Bonvoy points, benefits or elite night credits.

The mycitizenM+ paid-for loyalty scheme is to continue. Members will still receive discounted rates, beyond the ‘Member Rate’ offered to general Marriott Bonvoy members.

Accor gains a Las Vegas hotel

Not many people know that a) Accor is the largest hotel group in Europe and b) it has virtually no presence in the United States outside the luxury / upscale sector, with only 41 hotels in total.

Do you know many ibis hotels there are in the US and Canada? Nil.

I was therefore a little surprised to see that Accor is taking over the Treasure Island hotel on the Las Vegas strip.

This property has spent five years as a Radisson – branded Treasure Island – TI Hotel & Casino, a Radisson Hotel – but this has clearly not gone well. Why Accor is seen as a better choice than Radisson (owned by Choice Hotels in the US) is a mystery.

Treasure Island will become part of Handwritten Collection, one of Accor’s ‘soft’ brands (only launched in 2023) for hotels which don’t want to meet strict brand standards. It immediately becomes the biggest Accor hotel in the world with 2,884 rooms.

The hotel is not yet available for booking on the Accor website.