Marriott to focus on extended stay segment
Dubai, May 8, 2013
Marriott International will focus on the extended stay segment that consists of the Residence Inn by Marriott and Marriott Executive Apartments (MEA) brands to grow its portfolio in the Middle East and Africa.
The company views extended stay as a key area for opportunity and major expansion due to the number of long-term business visitors and corporate relocations in the region. Approximately one third of business room night demand globally is extended stay driven, which is defined as five nights or more.
Alex Kyriakidis, president and managing director Marriott International Middle East and Africa said: “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 with our expertise through these two great brands to serve the needs of this distinct group of travelers.”
In the Middle East and Africa, Marriott International is one of the industry forerunners in extended stay, opening Marriott Executive Apartments Dubai Creek in 2001, followed by properties in Dubai Green Community, Bahrain, Doha and most recently, Riyadh.
There are a further seven properties in the pipeline in key gateway cities including Algiers, Addis Ababa, Libreville, Erbil, Abuja and Abu Dhabi. The Residence Inn by Marriott brand entered the region in Bahrain in 2011, and will be followed by Jazan, Kuwait and Algiers. In total, Marriott International will be adding more than 1,000 extended stay units to the system by 2018.
Extended stay is a niche area within the lodging industry that is beginning to get traction outside of North America. Known in the US as the pioneer and power brand of extended stay, Residence Inn is well slated to help drive this segment’s development in this region.
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.
“Potential owners in the Middle East now realize the strength of the extended stay business model and are demanding more products,” said Diane Mayer, vice president and global brand manager of Residence Inn by Marriott.
“We are very excited to be developing product design guidelines and specification in the form of a flexible ‘kit of parts’ for Residence Inn, which is relevant for this region and that showcases the brand’s offering in terms of design, layout and technological capabilities.”
Announcement of the development of a Residence Inn “Kit of Parts” for the region signals that investors are demanding more extended stay products. A kit of parts contains architectural and interior design elements and guidelines that tailor the product to the unique needs of regional customers.
Combining elements that are regionally relevant with proven brand prototype directions, the kit of parts offers owners options that will allow them to develop a quality and culturally relevant product.
Although Residence Inn and Marriott Executive Apartments are both extended stay products, there is a clear brand differentiation between them.
Residence Inn provides hotel style services and accommodations in the form of large studios, one bedroom and -two bedroom suites, while Marriott Executive Apartments services guests who stay for a year or more at a time, providing more of an apartment feel and the comforts of home with an inventory of one, two and three bedroom apartments. – TradeArabia News Service