Dive Brief:
- Marriott International made waves Monday when it announced it would enter the midscale lodging segment in the U.S. and Canada with a new extended stay brand, currently dubbed Project MidX Studios.
- Project MidX Studios hotels will cater to guests seeking 20-plus-night stays offering spacious suites with in-room kitchens and ample closet space at a rate of around $80 per night, depending on the market, Marriott detailed in the brand announcement.
- Project MidX Studios will serve as Marriott’s most affordable cost-per-room product in the U.S. and Canada for developers to build, Noah Silverman, Marriott’s global development officer for the U.S. and Canada, told Hotel Dive. The brand is launching as extended stay gains momentum among investors and developers who see it as a cost-effective new construction option.
Dive Insight:
The Project MidX Studios prototype, featuring 54,000 square feet of total building area with 124 studios, will cost developers approximately $110,000 per key, or between $13 million and $14 million to build, making it Marriott’s “most affordable product to build,” Silverman said. Comparatively, Marriott’s standard 112-room prototype for its upper-midscale extended stay brand TownePlace Suites costs roughly $158,000 per key to build.
Project MidX Studios was designed to be highly efficient, Silverman added, noting approximately 76% of the hotel’s square footage generates revenue for the owner.
Stable occupancy levels can generate increased revenue. Due to changing travel patterns and demand, workers are “feeling unshackled from their office places more and more, and [have] the flexibility to be on the road and explore different locations,” Silverman said.
Despite heightened occupancy, extended stay hotels across the board typically do not need more staff than select-service hotels. Project MidX Studios is no exception, and will be Marriott’s lightest-staffed model across its brands, contributing to lower operating costs for owners, Silverman said.
The hotel brand will not have an on-site food or beverage offering, and it will feature a lower-maintenance, weekly housekeeping schedule.
“[Project MidX Studios] has been a collaboration with our owners and franchisees that have been in or interested in the [midscale extended stay] space for several months,” Silverman said. “We were hearing from our owners that they wanted us to enter this tier precisely because it was a more affordable product to build and a more affordable product to operate that drives really successful returns.”
There are three Project MidX Studios hotels set to break ground this year, and discussions with owners for more than 250 development opportunities under the new brand are in the works, Marriott said in the announcement.
While Silverman declined to identify specific markets that the hotels are planned for, he said Project MidX Studios properties will, at least initially, be primarily located in suburban markets. Marriott has identified as many as 1,800 markets across the country that it believes have the right dynamics and demand for this product type, he added.
Marriott’s Project MidX Studios brand will face competition in the midscale extended stay arena. Currently, Hilton’s Home2 Suites leads development in the middle-tier extended stay category, according to Lodging Econometrics, and the company recently launched a new lower-midscale extended stay brand, dubbed Project H3.
Additionally, Choice Hotels’ middle-tier extended stay brand Everhome Suites is ramping up its project pipeline.
