Marriott Canada sees uptick in select service deals

By Colleen Isherwood

MISSISSAUGA — Marriott opened 23 hotels in Canada in 2019 under the following brands: Four Points (4), Residence Inn (4), TownePlace Suites (4), Fairfield (2), Courtyard (2), Element (1), Delta Hotels (4), JW Marriott (1) and Westin (1). The company currently has 250 hotels open in Canada. Here’s a look at some of the most active brands.

Delta: Marriott has been dramatically growing Delta Hotels since it took over the brand in 2015. “As of our last earnings call (Q3 2019), there are 74 hotels open globally, including 34 open in the U.S. and 37 open in Canada,” said Paul Loehr, regional vice-president lodging development for Canada. “There are 36 in the global pipeline, including 22 in the U.S. and two in Canada.”

The two signed hotels are both conversions: Chateau Mont-Sainte-Anne in Beaupré, Que., and Edward Markham Hotel in Markham, Ont.

This compares to 38 Deltas when Marriott took over the brand for $168 million in 2015. At that time, the Delta brand comprised a diverse range of hotels and resorts with 38 properties, plus five more in the works. The 38 accounted for 10,000 rooms in more than 30 cities across Canada. By taking over Delta, Marriott greatly increased the Marriott footprint in Canada, moving the needle from 86 hotels to 124. The transaction increased Marriott’s distribution in Canada to more than 120 hotels and 27,000 rooms. The Starwood transaction, which came a year later, increase the total to 211 properties with 47,230 rooms, making Marriott the largest brand by rooms in Canada.

Delta was brand number 19 for Marriott International’s total portfolio, a Canadian iconic company, with more than 90 per cent Canada-to-Canada business at the time.

“Delta is doing well in the U.S. It’s not only appropriate for new builds, but also for conversions. If they have a nice full-service hotel for sale, development parties see the loyalty website and the mobile app, and the ability to plug into the power of Marriott. We’ve had a lot of success with conversions versus new builds.” There are currently 37 Deltas in Canada, plus two in the pipeline.

Although much of the recent action for Delta has been in the U.S., there is still demand in Canada, Loehr noted. “The brand is so well known among both consumers and development parties. It’s full-service, so we have to make sure that makes economic sense, and that there is ADR to support the investment.”

TownePlace Suites: “One of our focuses is to grow the upper midscale TownePlace Suites brand — we have more TownePlace Suites in the pipeline than any other brand,” said Loehr. Marriott currently has 16 TownePlace suites open and 17 in the pipeline, i.e., signed or under construction.

Courtyard by Marriott: Marriott currently has 33 Courtyards in Canada, with another 14 in the pipe.

Fairfield by Marriott: There are currently 24 open in Canada, plus another 15 signed or under construction. CLN recently reported on the brand’s smaller prototype, with 79 rooms; and the smaller Fairfield/TownePlace Suites prototype coming in the second quarter of this year.

“The Fairfield brand provides hotel owners and operators the ability to leverage the Marriott platform in a relatively cost efficient operating model,” said Ray Gupta, president and CEO of Sunray Group, which counts the Fairfield Montreal Downtown in its portfolio. “With construction costs ever on the rise, we have seen greater top line performance in this brand in relation to overall construction costs.

“The new design direction and branding also makes Fairfield much more competitive as Marriott is always looking to be the market leaders within the industry. We believe the Marriott Bonvoy loyalty program is one of the best in the industry and Marriott certainly delivers top notch revenue results across all of their brands and platforms. Sunray Group has been extremely satisfied with the results of the brand and will continue to look for opportunities to grow Fairfield within our portfolio.”

AC and Moxy: Loehr is very excited about Canada’s second AC Hotel, soon coming to Ottawa. The only other AC is in downtown Montreal. “We have a lot of interest in the lifestyle select service brands, and distribution in Canada means that [owners and developers] can actually see the hotels and experience them in Canada.”

Canada’s first Moxy is a conversion now underway in Banff by Canalta Hotels. “We chose Moxy because we liked the direction of the brand with its focus on a younger demographic,” Brooke Christiansen of Canalta told CLN. “The fact that it is lighter on food and heavier on beverage made it a good fit for the market and type of traveller we want to attract. It was a good way for us to stand out from the crowd and be different from what Banff has to offer. It will still be a boutique, retro Banff ski hotel and also appeal to the guests we want.”

Loehr noted that although while the Moxy brand fits with Banff’s millennial mindset, it is usually an urban brand. “We are having a number of discussions regarding urban markets, particularly those with high barriers to entry.”

Recently, Marriott invited Canadian developers and owners to Boston, to tour the Moxy and AC brands in that city — to walk with the general manager and sales staff, and ask questions.

They also showed the Canadian version at the recent Western Canadian Lodging Conference, presenting on Courtyard, Fairfield, TownePlace Suites, Moxy, AC and Element.

Tribute: “We also spent a significant time on Tribute. We have the first one in Quebec City, Hotel PUR. There’s an opportunity to grow this [soft] brand as it has great potential. Independent hotels can keep their own DNA, but have access to Marriott Bonvoy, which is growing by 1.5 million new members monthly. There are 5.8 million Canadian Bonvoy members — 15 per cent of all Canadians,” Loehr said.

“We’re targeting people who have been to Quebec City and seen the Chateau Frontenac and now want to see something else,” said Dominique LaPointe, GM, when the Hotel PUR relaunched as a Tribute in 2018. “This group is 24 to 40 years old; they’re independent and want to be masters of their own existence.”

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