Marriott International plans to aggressively grow its portfolio of 'extended stay’ segment which includes brands like the Marriott Executive Apartments and the Residence Inn, in the Middle East over the coming few years, according to a senior Marriott executive.
The US hotel chain aims to have 44 select service hotels in the Middle East by 2020, which also include the Courtyard by Marriott brand, said Diane Mayer, vice president and global brand manager of Residence Inn by Marriott, on the sideline of the Arabian Travel Market on Wednesday.
“That is our growth goal. Potential owners in the Middle East now realise the strength of the extended stay business model and are demanding more products,” she said, adding that there are 13 Marriott Executive Apartments in the pipeline in the region at present with five already existing properties (of the 23 globally). And there are three Residence Inn hotels in the pipeline in the region with one operational.
According to Mayer, globally, one-third of Marriott’s business travel room nights are accounted for by the extended stay segment. “There is a strong demand for this segment in this region and thus out here it could be close to 40 per cent,” she said.
Extended stay is a niche area within the lodging industry that is beginning to get traction outside of North America. Currently, the select service and extended stay tier makes up 13 per cent of Marriott International’s rooms in the region, but by 2020 it is expected to be almost 60 per cent of the company’s room inventory in the Middle East and Africa, according to the company.
The upcoming seven properties in the pipeline in key gateway cities including Algiers, Addis Ababa, Libreville, Erbil, Abuja and Abu Dhabi, Mayer said, adding that the Residence Inn by Marriott brand entered the region in Bahrain in 2011, and will be followed by Jazan in Saudi Arabia, Kuwait and Algiers.
In total, Marriott International will be adding more than 1,000 extended stay units to the system by 2018, according to the company.
“Extended stay is our most profitable lodging segment returning house profit margins above 65 per cent, and on average over 55 per cent. Demand is rising here for this unique product and we are perfectly positioned to serve the needs of this distinct group of travellers,” Alex Kyriakidis, President and Managing Director of Marriott International for Middle East and Africa, said in a statement.