REPORTUR.mx interview with Walter Regidor, Vpte. of Hotel Development
Marriott increases its presence in the Caribbean and Latin America with its 31 brands, many of which have a flexibility that adapts more easily to the conversion model, one of the variants that the hotel offers to investors and owners. According to data from Lodging Econometrics, the number of hotel brand conversions in Latin America increased by 22% in the first quarter of 2023 compared to the first quarter of 2022, with a total of 67 projects and 9,464 rooms.
Marriott’s data reflects this global trend, with a first quarter of positive conversion activity, representing 29% of rooms signed and 25% of rooms opened by the company globally. On this topic, future developments and investments, discuss REPORTUR.mx with Walter Regidor, Vice President of Hotel Development for Marriott in the Caribbean and Latin America.
Why does Marriott favor the conversion model in the Caribbean and Latin America?
Conversions have become an important growth driver for Marriott International in the Caribbean and Latin America in recent years, as hotel owners and investors increasingly recognize the efficiency and advantages of the conversions model, whether as an independent hotel decide to affiliate with Marriott under one of our 31 brands, or decide to rebrand their existing properties, leveraging the benefits of scale we have at Marriott, as well as our portfolio of well-known brands supported by Marriott Bonvoy, our travel platform that currently features with more than 186 million members globally.
What is attractive about the model for owners or investors?
Conversions are an extremely attractive model because it is a win-win for both the owner and the brand, by efficiently aligning the owner’s resources, costs and times with the brand’s expansion plans.
Hotel owners, investors and developers are drawn to Marriott International’s brand conversion opportunities for a number of reasons: For existing hotel owners, adding a hotel to our portfolio gives them access to our robust loyalty, distribution and marketing platforms , access to our global sales organization and direct bookings with our low guest acquisition cost.
Owners also have the opportunity to see potential cost savings by connecting to the Marriott ecosystem, including our innovation and digital programs, which can help improve a property’s visibility and position it for potentially higher occupancy.
What are the Marriott brands that best suit this model?
Hotel owners really appreciate the flexibility of Marriott’s many different brand options that are favorable to conversion such as The Luxury Collection, Autograph Collection Hotels, Tribute Portfolio, Delta Hotels and Four Points by Sheraton.
In the Caribbean and Latin America, more than 50% of the rooms signed by Marriott were conversions in 2022. At the end of the first quarter of 2023, the region had more than 3,000 rooms in conversion development and during the first two quarters of 2023 more than 800 converted rooms, boosting the company’s successful strategy.
What are the most outstanding projects in the region?
One of our main projects in the region has undoubtedly been the integration of City Express by Marriott into our portfolio of brands. With the entry of City Express hotels, we expanded our presence in the Caribbean and Latin American region by 45% to more than 480 properties and 17,000 rooms in 37 countries.
With this brand expansion and entry into a new segment, we see great potential for conversions, not only in Mexico, but also in other countries in the region such as Brazil, where the limited services segment is extremely attractive for owners and developers.
In addition to Brazil, in which countries in the region will the conversion model grow imminently?
For conversions in the region, we have a total of 22 properties and more than 3,500 rooms in conversion plans in the medium and long term with countries such as Mexico, Puerto Rico, Colombia and Argentina leading the list.
Some of the closest conversions we have are: Hacienda del Mar Los Cabos in Mexico. This hotel is currently white labeled and we expect it to become an Autograph Collection after some rebranding.
Hotel Plaza Santiago in Chile. This hotel is also listed as a ‘white label’ and we hope it will convert to the Le Meridien brand by the end of the year. Additionally, we have an Autograph Collection property that we hope will go through the conversion process before the end of the year in Peñón de Guatape, Colombia, and more recently we signed an agreement to convert one more property to the Autograph Collection brand in Las Terrenas, Dominican Republic. .
We are also very excited to welcome one of our newest brands, Apartments by Marriott Bonvoy, which we officially launched in early 2023, something new and innovative in the multi-family hotel industry with great growth potential. . The first conversion in our region will be in San Juan, Puerto Rico. Apartments by Marriott Bonvoy is our market response to growing interest in an extended-stay product seeking more space, driven by the mix of business and leisure travel, and travelers’ desire for more accommodation options.
What other types of expansion models do you drive?
In addition to the conversion model, we have the new construction model, which is extremely attractive for owners and developers, as it allows for a more open choice of the segment and location of the hotel under a recognized brand with experience in the industry such as Marriott. International.
In this case, what are the benefits?
Some of the benefits of a new construction is that, under exhaustive analysis, it allows the development of a project with infrastructure and spaces adapted to the most recent demand and needs of the market and travelers, including trends that are becoming increasingly relevant, such as sustainability and sustainable business development. Only in the Caribbean and Latin America, we have more than 110 new development projects in the medium and long term for more than 18,000 rooms.
Another related model alternative that is gaining momentum is asset conversion, where entire residential or office buildings are converted to hotel use. These asset conversions allow us to take advantage of many existing construction plans to best adapt them for lodging or hotel use. A clear example is the current asset conversions that we see when converting residential type units with Apartments by Marriott Bonvoy, or even other types of buildings, such as clinics or offices, and converting them under an appropriate brand segment.
