By Amy Bostock
Marriott International has thrown its hat into the midscale segment with the launch of StudioRes, an innovative new lodging concept designed from the ground up.
The new-build, midscale, extended-stay development platform for owners and franchisees in the U.S and Canada will allow owners to capitalize on today’s increased consumer demand for longer-stay options at an affordable price, while taking advantage of a turnkey prototype and Marriott International’s powerful operational engines.
“The pandemic and the recovery have put an exclamation point on the longer-term stay category, recognizing that it has always done well during ups and downs of economic times,” says Eric Jacobs, Chief Development Officer, Midscale Brands, Marriott International. “But with a change in travel [patterns] and the ability to work remotely, we’re probably going to see less transient stays and so I think these are long-term trends.”
Duncan Chiu, senior director, Lodging Development, Western Canada, Marriott International, says he’s seen significant growth potential in the affordable midscale segment, “which [Marriott has] not traditionally played in.” He says longer stays from small enterprises, construction crews and logistics, as well as middle-class lodging spend, means the segment rebounded faster than the traditional types of demand coming out of the pandemic.
“And we do think that is going to continue to outperform going forward. So, with strong consumer demand, there’s a very positive growth trajectory.”
Marriott entered the midscale segment earlier in the year with the acquisition of the City Express portfolio (now City Express by Marriott) that will serve the Caribbean and Latin America, and Chiu says the market will start to see “continent-specific brands relevant to those geographies. For the U.S. and Canada, for the time being, that’s going to be StudioRes.”
The 124-key brand built on a 1.6-acre footprint, sits in lower midscale and features fully furnished studios with a queen bed and kitchen. Public spaces include a communal table, fitness room, guest-paid laundry, covered patio and vending area. The total building area is 54,000 sq. ft. The operating model is cost effective, with an efficient staffing model, thanks to the brand’s limited amenity offerings.
“That’s a very efficient building,” says Jacobs. “We are not adding an enormous amount of public space, because again, people are really thinking about more of a transitional state — I’m living here, I’m not staying here. So, that leads to this business model staying focused on this consumer that’s looking for something for two to three weeks. When you start to get to that length of stay, it’s not always about chasing RevPAR; it’s chasing what we refer to as extended-stay RevPAR, which means we to start to look around the market at not just what hotels are charging, but also what apartments are charging.”
He says the best way to describe StudioRes is “short-term housing, with a sprinkle of hospitality. We’re moving somebody in, not checking somebody in. We’re offering the hospitality of Marriott — the trust and the security that we’re going to provide, and the quality level that people have an expectation around Marriott — but we’re providing very specific amenities for that type of consumer around that stay.”
StudioRes is being developed with a very specific guest demographic in mind.
“With increased inflation, people want to continue to travel and they want to stay longer, but they’re also looking for something that won’t necessarily break the bank,” says Aaron Laurie, VP Lodging Development, Eastern Canada, Marriott International. So, we’re going to continue to look for those budget-conscious travellers who are staying long term.”
Jacobs says Marriott will break ground on the first two to three StudioRes locations by the end of this year in Florida, Georgia and South Carolina. Canada will likely see its first StudioRes in the first quarter of 2025.
“We’ve been working on this for a year, alongside a number of our development partners, who have been partnered with us on ensuring we got the design, the facilities and the model right.”
“An interesting thing about this new brand and us entering the midscale segment is it’s going to give us the opportunity to grow the customer base and the Bonvoy loyalty base,” says Chiu. “Even though we have more than 186 million Bonvoy members, tapping into this scale segment is going to allow us to identify a new customer. That’s a really positive thing for us as we look at our portfolio. And then with the addition of StudioRes, we now have a lodging option from mid-scale to luxury, which means we’re going to have an offering for each trip purpose.”
