Marriott Is Opening A 3-In-1 Hotel In Nashville

I think many people are a bit confused by the actual business model of the major hotel chains. Most major hotel chains don’t actually own a vast majority of the individual properties, but rather have contracts to manage the properties, and they get a fee for doing so.

As a result, the major hotel chains are really selling to investors, even more so than individual guests. That’s one of the reasons we’ve seen so many hotel chains emerge over the years. When the Marriott and Starwood merger is complete, they’ll have ~30 hotel chains. I can’t even keep track of them anymore, and in some cases really wonder what the differences are.

Marriott-Brands

SPG-Brands

But I’m also not surprised by the trend. A company might be willing to invest in the first Residence Inn in a given city, for example, rather than the fourth Marriott property.

With that in mind, over the years we’ve seen some properties marketed as multiple brands. For example, in Dubai there’s now a W and St. Regis attached to one another.

St-Regis-Dubai

Meanwhile at Frankfurt Airport, there’s a Hilton and Hilton Garden Inn attached to one another. From investors’ perspectives, this allows them to capture more of a market than they’d be able to get with just one brand.

Hilton-Garden-Inn-Frankfurt-Airport-01

However, Marriott is taking this to the next level. In 2018, Marriott will open their first triple hotel in Nashville, Tennessee. Per Marriott’s press release:

Marriott International, Inc. today celebrates the groundbreaking of its first-ever hotel to contain three of its brands in a single building – a concept that underscores the company’s commitment to innovate in ways that benefit both consumers and the development community.

The landmark project will rise in Nashville’s SoBro neighborhood, which over the last few years has been transforming into a bustling area filled with restaurants, shopping and entertainment. The 470-room, $137 million hotel is expected to open mid-year in 2018.

“Marriott continues to grow its multi-brand portfolio, as these projects offer a myriad of benefits to both our development partners and our guests. Developers can target multiple consumer segments while benefitting from significant construction and cost synergies. Hotel guests are offered a wider range of options to serve all of their travel needs,” said Tony Capuano, Executive Vice President and Global Chief Development Officer at Marriott International.

The L-shaped, 21-story building being developed by Atlanta-based North Point Hospitality will contain an AC Hotels by Marriott® that will occupy 209 rooms in one wing and a combined SpringHill Suites by Marriott® and Residence Inn by Marriott® in the adjoining wing with 125 rooms and 136 rooms, respectively. Though customers will see three brand logos on the outside of the building and have three distinct hospitality experiences inside, the developer has planned to consolidate behind-the-scenes operations and spaces to reduce ongoing expenses.

Here’s a rendering of the building:

Marriott-Nashville

Marriott already has 52 dual-branded properties, though this is the first with three brands. This will obviously lead to synergies, and I imagine some amenities (perhaps the gym and/or a swimming pool) will be shared.

What’s interesting here is that while they have their unique design elements, Residence Inn and Springhill Suites seem to me like they’re going after the same general market, so I’m not really sure if they’re marketing to totally different consumers with this. Meanwhile AC is a bit more European and upscale, so I can see the difference there.

Bottom line

We’ve seen investors take on projects with two brands in one building, though this is the first one I know of with three brands in a building.

At what point are these hotels cannibalizing one another, rather than actually going after different market segments, though?

What do you make of this triple-branded property opening in Nashville?

Comments

  1. One interesting property is the triple branded Aloft/Hyatt Place/Fairfield Inn in River North in Chicago. Each “hotel” has its own lobby and they actually have separate gyms (all next to each other in the basement level), but I assume that there are back of the house operations that are shared. I guess the property owner thought this would be a good way to tap into the loyalty programs and distribution systems of three separate systems!

  2. Stayed at at a triple branded Hilton in Oklahoma City. Hampton, Hilton Garden Inn, and Homewood Suites. I was confused by the whole thing. Seemed in that case the Hampton had more family amenities (i.e. kids pool area) and the other 2 seems to share everything. I guess it was wheather you wanted a suite at Homewood or a regular room at the Garden Inn. It seems to me, a single hotel could offer all the same things.

  3. My first thought was “great mattress run opportunity”. But by 2018 hotel “loyalty” programs may be just as transactional as airline programs?

  4. The MIami Airport Marriott has a Courtyard and Residence Inn all on the same property. It’s more like a campus…

  5. The W/Regis combo in Dubai you mentioned in the article is also a triple property complex, the 1000+ room Westin should open soon.

  6. Marriott already has a triple branded property: Downtown Houston Residence Inn / Courtyard / Springhill Suites. Went triple about a year ago.

  7. They have one in Indianapolis with four: a JW, Fairfield, Courtyard, and Springhill. A fifth (Marriott) is across the street connected by sky bridge.

  8. Was going to mention a Houston property but DMODEMD already beat me to it. I’ve not stayed there but does an average traveler understand multi-brand properties, especially when brands are sort of closely related without much distinction?

  9. I hope the offset of having reduced back-of-house operations offsets the drop in revenue from having a larger geographic footprint to serve customers closest to where they need to be.

  10. Residence Inn and Springhill Suites are not catering to the same market, one is a product designed for extended stays with full kitchens, while the other offers slightly larger rooms with separation between living and sleeping areas. We know you don’t stay with Marriott, so may make sense to ensure your comments are researched a bit more thoroughly to keep postings about brands you are less familiar with useful.

  11. LA has two dual-properties across the street from each other as well. JW Marriott & Ritz-Carlton in one. Residence Inn & Courtyard in the other.

  12. I stayed at the RI in Houston over 100 nights a year for 3 years. The vast majority of stays were not extended stay but convention lodging. The Courtyard in the same building would not be enough to handle the business. They bought a section of the building with apartments and added the Springhill which will also cater to convention business and maybe RI can focus on extended stay but probably still will handle convention traffic until the Marriott Marquis takes over all the available convention business since it is across the street when the tri-brand is about 8 blocks away.

  13. Accor has lots of double branded properties, and a few triple branded. I recently stayed in their Novotel in Fujairah, UAE, which also has an Ibis and Adagio within the same building. In Southampton, UK, they have a Novotel, Ibis, and Ibis Budget on the same plot of land. I’d be surprised if they don’t have more.
    And at CDG they recently opened the double branded Pullman / Ibis Styles, that happens to have separate Ibis and Novotel properties right beside it, just to make sure they capture every type of customer.

  14. @Lucky,
    The property in Dubai is a triple propert. It include Westin, W and St. Regis too.

  15. There seem to be quite a few triple branded Accor hotels. I’ve stayed at a Novotel in Bern, Switzerland that had a ibis and ibis budget with separate entrances in the building and also spotted the same concept in Berlin recently.

  16. RI is also popular with families (mine included) who want a suite that has an actual door + free breakfast. We love staying at RI properties when on family vacations, particularly where we spend more than a couple nights in a particular location.

  17. I’m a day late, but let me throw out a few points.

    Contrary to what Darren wrote above, RIs are NOT for extended stays, in spite of the marketing. Lots of market research on this. To keep my explanation simple, as RIs’ ADR have gone up, their average length of stay has gone down. They have simply become too expensive for extended stays. dmodemd had a good example of this.

    If you ever get into the hotel construction business, you’ll find one of the first questions a developer confronts is “if I build more than one hotel, is it better to put them all in one reservation system, or two?” There are advantages either way. In this triple hotel case, I guess Marriott made an offer too good to pass up.

    My other observation is simply chuckling at the inefficiency of a 21 story tall hotel with only 400 rooms. Judging by the drawing, I’m guessing it isn’t 21 floors of hotel. The bottom half dozen floors are probably parking, with the 400 rooms occupying a more reasonable 15 floors.

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