Marriott completes acquisition of citizenM brand

BETHESDA, Md. - Marriott International (NASDAQ:MAR), the $74.67 billion hospitality giant maintaining impressive gross profit margins of 81.89%, announced Wednesday it has completed its acquisition of lifestyle hotel brand citizenM, adding 37 open hotels with 8,789 rooms across more than 20 cities globally to its portfolio. According to InvestingPro data, Marriott’s strong financial health and consistent growth make it well-positioned for this expansion.

The acquisition expands Marriott’s select-service offerings with properties located throughout the United States, Europe, and Asia Pacific. The transaction also includes citizenM’s pipeline of two hotels totaling over 300 rooms, building upon Marriott’s revenue growth of 4.8% over the last twelve months.

"As travelers continue to seek innovative lodging offerings that blend technology with genuine, people-first hospitality, the citizenM brand is the perfect addition to our portfolio," said Anthony Capuano, President and CEO of Marriott International, according to the company’s press release.

Founded in 2008, citizenM is known for its technology-driven accommodations, efficient use of space, and focus on art and design. The brand features smart in-room design, collaborative workspaces, and food and beverage options.

Marriott plans to integrate citizenM properties into its systems and platforms later this year. Until then, the hotels will remain bookable through citizenM’s digital channels. The company stated that once integration is complete, citizenM will become a fully participating brand within the Marriott Bonvoy loyalty program.

Members of citizenM’s subscription program will continue to receive their benefits for now, with details about the program’s future to be announced following integration.

The acquisition adds to Marriott’s existing select-service lifestyle portfolio, which includes AC, Moxy, and Aloft brands. Marriott International currently operates, franchises, and licenses nearly 9,500 properties across more than 30 brands in 144 countries and territories.

In other recent news, Marriott International has announced its expansion into El Salvador with the debut of the City Express brand through a multi-unit agreement. This venture, in collaboration with Corporación Polaris and Cardedeu, will introduce four new properties, adding 440 rooms to Marriott’s portfolio in the region. Meanwhile, Jefferies has upgraded Marriott’s stock rating from Hold to Buy, raising the price target to $303, citing the company’s robust business model and the transition to more durable mid-single-digit net unit growth as key factors. UBS has maintained its Neutral rating with a $299 price target, noting the industry’s focus on unit growth and the impact of construction slowdowns on future expansion.

JPMorgan also initiated coverage of Marriott with a neutral rating and a price target of $284, describing the company as a "high-quality, asset-light compounder." Marriott’s CEO, Tony Capuano, has observed a trend where consumers are delaying hotel bookings, with both leisure and business travelers securing rooms less than 21 days before their trips. Additionally, Marriott reported having 244,000 rooms under construction, with a change in classification now including conversions in these figures. Despite this reclassification, the number of rooms under construction increased by a mid-single-digit percentage year-over-year, although the overall pipeline grew by 7% during the same period.

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