Marriott International said Monday it would buy the lifestyle hotel brand CitizenM for $355 million, broadening its presence in primarily urban markets with a brand that offers small, tech-enabled rooms with minimalist amenities and playful decor.
Marriott, the world’s largest hotel operator, will add citizenM’s portfolio of 36 hotels spanning more than 20 cities across the U.S., Europe, and Asia Pacific to its system.
The companies expect the deal to close later this year, subject to regulatory approval.
The deal structure includes the $355 million upfront payment for the brand and related intellectual property, with potential earn-out payments of up to $110 million based on future growth metrics. These additional payments wouldn’t begin until the fourth year after closing.
Marriott CEO Anthony Capuano said in a statement that the acquisition would boost the operator’s offerings in the so-called select-service end of the market, or hotels without full-service amenities.
Staying Asset-Light
Marriott has been attempting to become more asset-light, but CitizenM owns and leases nearly all of its properties. The deal envisions CitizenM’s properties remaining owned and leased by the seller under new long-term franchise agreements.
CitizenM operates 8,544 rooms, with three additional properties under construction that will add more than 600 rooms by mid-2026.
Marriott believes the deal will enable it to “approach” 5% net room growth for full-year 2025. In February, the company said its outlook was for “4% to 5%” growth in net rooms this year. Last year, it grew net rooms 6.8% year-over-year. As the world’s largest hotelier expands its empire, it becomes harder to sustain previous growth rates in its networks.
Marriott expects to generate about $30 million in annual fees from the existing portfolio and pipeline.
Small Rooms, Big Strategy
The typical CitizenM guest room is only around 170 square feet (or 14 square meters), which enables the brand to fit more guests per hotel and keep room rates down.
CitizenM often relies on modular, or pre-fabricated construction, of many components, which can reduce costs for development compared with needing workers to build or assemble everything on site.
CitizenM had been one of the rare hotel brands to experiment with non-points-based loyalty programs, such as with a paid model where subscribers get access to discounts on rooms and co-working spaces. It was unclear if Marriott would continue those experiments as it incorporates CitizenM into its points-based Marriott Bonvoy loyalty program.
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