Marriott International today announced plans to launch a new extended-stay brand, furthering its reach in the midscale market. The announcement was made in conjunction with the 2023 NYU Hospitality Industry Investment Conference, taking place June 4-6 in New York City.
The new brand has not been named yet but it is currently being referred to as Project MidX Studios. Its goal is to deliver reasonably priced modern lodging options for guests seeking longer stays in the U.S. and Canada. Specifically, Marriott said the brand is designed for guests seeking a hotel stay of 20 or more nights, at a cost point of around $80 per night — depending on the market and demand.
The hospitality leader said it expects to break ground on the first three properties this year and is in discussions for more than 250 new developments under the new brand.
According to Marriott, Project MidX Studios is expected to be the company's most affordable cost-per-room product for investors in the U.S. and Canada. The brand will operate on a light-touch, digital-first model with a focus towards features such as check-in with Marriott Mobile Key and pay-and-go retail.
This latest announcement follows Marriott's acquisition and subsequent launch of City Express by Marriott, an affordable midscale lodging option in Latin America. The brands join the company's growing portfolio of extended-stay hotels, including Residence Inn by Marriott, Element by Westin, TownePlace Suites by Marriott, Marriott Executive Apartments and Apartments by Marriott Bonvoy.
"With trends towards longer-stay travel and increased work flexibility, Marriott is utilizing its experience in extended stay to deliver a fresh solution to meet the needs of a growing customer base," said Noah Silverman, Marriott International's global development officer for the U.S. and Canada. "With our plans for Project MidX Studios, we will have an extended stay product in every lodging tier — from affordable midscale to upper upscale and luxury — for our customers and our owners and franchisees."
Extended Stay Favored Over Convention Hotels
Extended-stay and limited-service hotels are more attractive to investors in the current market environment, hotel executives agreed in a panel discussion today at the 45th annual NYU Hospitality Industry Investment Conference in New York City. "People are not building new convention hotels," said Mark Hoplamazian, president and CEO of Hyatt Hotels Corp. "We live by supply and demand."
In fact, data presented by Stephen Rushmore Jr., president and CEO of the hospitality consulting firm HVS, shows that extended-stay brands have the highest level of investor interest (above 80 percent). Meanwhile, interest in convention hotels was rated the lowest, at less than 20 percent.
Despite growing group-business demand, that segment still makes up just two-thirds of it prepandemic volume, according to Jeffery Stewart, founder and president of Walnut Hill Advisors and vice chair of the NYU conference. So, while compression is making it more challenging for planners to find space in certain destinations, at this point "the economics don't work" for building more convention hotels, in the words of Hilton president and CEO Chris Nasetta.
In late May, Hilton announced it was developing its own lower-midscale, long-stay brand with apartment-style accommodations. Currently titled Project H3, all guest rooms will feature fully functional kitchens. The properties will also offer complimentary grab-and-go breakfast, a dedicated retail market, a food delivery pick-up area and an open-plan public space for working or socializing.
In April, Hyatt Hotels revealed its new Hyatt Studios extended-stay brand. The upper-midscale properties will serve secondary and tertiary markets in the Americas. According to the company, letters of interest have been signed for the development of more than 100 Hyatt Studios hotels. Construction is set to begin this year and Hyatt expects to open its first property under the new brand in 2024. Hyatt Studios hotels will feature complimentary grab-and-go breakfasts, 24-hour markets and kitchen amenities in each guest room.