Marriott has announced the reaching of an agreement with Hoteles City to acquire the City Express brand portfolio for $100 million. The move marks Marriott’s entry into the affordable midscale segment.

The City Express brand portfolio includes City Express, City Express Plus, City Express Suites, City Express Junior, and City Centro, as well as associated trademarks, domains and related intellectual property, the City Premios loyalty programme, and other assets and liabilities. The stabilised franchise fees are expected to be approximately $10 million for the existing portfolio.

As it stands, the portfolio accounts for 152 hotels, including 17,356 rooms across 75 cities in Mexico and 3 countries in Latin America, as well as 5 under-construction projects, representing an additional 676 rooms. Upon completion of the transaction (anticipated between the end of 2022 and the first half of 2023), it will become part of Marriott’s franchise system. The hospitality company expects to update the brand name by adding its “by Marriott” signature.

The acquisition makes Marriott the largest hotel company in the Caribbean and Latin America. Its CALA portfolio will swell by 45% to encompass 486 properties across the region. Marriott has also identified CALA as a primary target to expand even further the City Express by Marriott brand thanks partly to the high-growth nature of the affordable midscale segment.

The American giant is not alone amongst its North American peers in setting its sights on the Caribbean and Latin America. Recently, Wyndham appointed Gustavo Viescas as its new President of Latin America with the task of managing and expanding its portfolio of 250 hotels in the region. Last August, Choice Hotels completed a $675 million acquisition of Radisson Hotels Americas, thus adding 67,000 keys across the United States, Canada, Latin America and the Caribbean to its assets.

This trend can, in part, be explained by CALA’s excellent growth potential. A sense of security and proximity to home for North American players in a world which can be seen to be closing up on itself may also be driving this recent interest in the region.

The finalisation of the acquisition is still subject to certain customary conditions, including approval by Mexico’s Federal Economic Competition Commission (Cofece).

This transaction with Hoteles City Express is a strategic win for Marriott and our customers, associates and owners and franchisees. We’re excited to enter a new lodging category – the popular affordable midscale segment where we see significant potential. With City Express by Marriott, we will be providing our customers with more choice through a new, approachable, moderate-priced offering, increasing opportunity for owners and franchisees as well as associates.

Anthony Capuano, CEO of Marriott International

When we started thinking about City Express, we were convinced that a modern, efficient, and affordable brand would be very attractive to the local traveller. After our first 20 years, we are very excited and honoured to work alongside Marriott, a company we’ve always admired, to take the brand to the next level. After having the opportunity to work with the Marriott team, we confirmed that we share common cultural values and a similar approach to hospitality.

Luis Barrios, CEO of Hoteles City

Our goal is to be everywhere our guests want us to be, with the right property in the right location and at the right price point. This transaction with Hoteles City Express will expand our ability to do exactly that – initially in CALA, with opportunity around the world. We can’t wait to welcome City Express’s customers and continue the tradition of high-quality hotels and authentic hospitality established by Luis Barrios and his team.

Brian King, President of Caribbean and Latin America at Marriott International