Marriott International announced on Monday that it had concluded an agreement to buy Citizenm, a brand of lifestyle known for its compact and experienced rooms and and a fun and minimalist design, for $ 355 million. This decision, according to a press release, will considerably expand the Marriott footprint in the main urban centers around the world.
The acquisition will bring the portfolio of 36 hotels from Citizenm – located in more than 20 cities in the United States, Europe and the Asia -Pacific region – under the direction of Marriott. According to the press release, the transaction should close later this year, pending regulatory approval.
As part of the agreement, Marriott will make an initial payment of $ 355 million for the brand and its associated intellectual property. In addition, the agreement includes the possibility of earnings of earnings totaling up to $ 110 million, which would be subject to future performance references. These additional payments would only start four years after the end of the acquisition, according to the press release.
Anthony Capuano, chief executive officer of Marriott International, underlined in a press release according to which the integration of Citizenm into the Marriott portfolio will strengthen his position in the selected service hotels segment, which generally offers rationalized equipment compared to full properties. While Marriott has directed its business model to an asset light strategy, Citizenm operates differently – own and rent almost all its hotels. Depending on the conditions of the agreement, Citizenm’s properties will continue to be held and rented by their current owners, but will work under new long -term deductible agreements.
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Citizenm is currently overseeing 8,544 hotel rooms, with three additional current properties which should contribute more than 600 additional rooms by mid-2026.
Marriott also expects the acquisition to support its objective of achieving growth of almost 5% in the net room in 2025, according to a press release. Earlier this year, the company has scheduled a 4% to 5% increase in net rooms for the current year. While Marriott reported an increase of 6.8% of net rooms from one year to another in 2024, the hotel giant recognizes that maintaining such growth becomes more and more difficult as its global network continues to develop.
Source: Skift