Marriott May Sell Edition Hotels to Fund Brand Expansion
Marriott International Inc. (MAR), the largest publicly traded U.S. hotel chain, may sell its three Edition properties to fund an expansion of the boutique, luxury brand, incoming Chief Executive Officer Arne Sorenson said.
“We already have interested buyers,” Sorenson said in an interview yesterday at the company’s JW Marriott in downtown Los Angeles. He will replace J.W. Marriott Jr. as CEO at the end of the month, and Marriott will remain chairman.
The Edition brand, a joint venture with hotelier Ian Schrager, is Marriott International’s attempt to break into the boutique segment in which Starwood Hotels & Resorts Worldwide Inc. (HOT)’s W chain operates. Marriott, based in Bethesda, Maryland, would continue to operate the Edition properties after they are sold, Sorenson said.
“We’re willing to put in more money to expand Edition,” he said.
Marriott agreed in October to buy the Clock Tower office building near Madison Square Park in Manhattan for an Edition hotel. The company, which mostly operates hotels without owning properties itself, used its own money for the transaction after little expansion since the brand was announced in 2008. Marriott plans to have six Edition hotels by 2015.
The hotelier also is adding Courtyard and Residence Inn hotels across its JW Marriott and Ritz-Carlton property at Anschutz Entertainment Group’s L.A. Live entertainment complex in the city’s core.
“Downtown L.A. still has room for more Marriott brands,” Sorenson said.
More in China
Among the company’s high-end brands, Marriott expects to have more Ritz-Carlton properties in China than in the U.S. within five to 10 years, Sorenson said. The hotelier also is expanding its Bulgari luxury brand. It has two such hotels, in Milan and Bali, Indonesia, and will announce a third, in London, in the next few weeks, he said.
“Luxury will be a powerful long-term growth engine for us because of the wealth” building in such countries as China, Sorenson said.
To contact the editor responsible for this story: Daniel Taub at firstname.lastname@example.org