BERLIN— Marriott International and the parent company of Ikea have teamed to launch a chain of European-based economy hotels. The global hotel chain announced Tuesday its new Moxy Hotels brand at the International Hotel Investment Forum in Berlin.
Marriott and Inter Ikea plan to add 150 franchised Moxy Hotels in Europe during the next 10 years, targeting ground-up developments in Germany, Austria, the United Kingdom, Ireland, Belgium, Italy, the Netherlands, Denmark, Finland, Norway and Sweden. The new brand will fuel Marriott’s company-wide growth in the region, which is expected to reach 80,000 rooms by 2015.
The company has 280 properties with 52,510 rooms in Europe at present.
Two years in the making, the Moxy brand is a play to gain share in a largely untapped economy segment. The economy tier in Europe represents nearly half of the total room supply, yet only 20% is branded, according to Marriott.
There were 17,070 economy rooms in Europe’s total active pipeline in January, according to STR Global, sister company of HotelNewsNow.com. According to 2012 year-end data, Europe’s economy segment declined 5.1% in occupancy to 69.8%, its average daily rate rose 9.1% to €58.17 ($75.82) and revenue per available room grew 3.5% to €40.57 ($50.88).
“In that segment, if you look at it, there isn’t anybody hip like this, except maybe for CitizenM. There isn’t anyone,” Ramesh Jackson, VP and global brand manager, told HotelNewsNow.com.
In September, HotelNewsNow.com reported that Swedish furniture giant Ikea announced plans to open 100 budget hotels across Europe but that the hotels would not feature Ikea's own fixtures and fittings or even its brand name.
Inter Ikea, the company that owns the Ikea brand, had alternative plans to work with one of the world’s most recognizable hotel companies. Inter Hospitality—part of Inter Ikea's property division—was named by Marriott as the initial developer and owner. Nordic Hospitality will be the first franchisee to operate the Moxy brand.
Inter Ikea already has a number of hotels and real estate projects to its name, including a 26-acre multi-purpose center around the former Olympic Park in London. Moxy will be its first chain, with the first property scheduled to open in Germany.
The 3-star brand was designed with the millennial traveler in mind, Jackson said.
“They are the new travelers, the up-and-coming travelers. We have designed this brand that we know will appeal to them. We’ve done a lot of consumer research, and everything that you see here, including the name is one that appeals to them,” he said.
Each room will feature a floor-to-ceiling signature art wall that is hand selected to reflect the local city or surroundings.
The 17-square-meter rooms will feature high-tech amenities, such as built-in USB ports and 42-inch flat-screen TVs with airplay connectivity. Each room will also feature a floor-to-ceiling signature art wall that is hand selected to reflect the local city or surroundings. The mock-up on display at IHIF featured Berlin’s historic Brandenburg Gate.
“The room’s superb. … It doesn’t feel economy at all. Nothing in the room is economy,” Jackson said. The average projected cost per key for development is €45,000 (or nearly $60,000), he said.
“And the public space that we are working on, it’s going to be hip. It’s one of those things that you want to hang around, you want to be there, you want to be seen there,” he added.
Perhaps most appealing to its target segment, however, is the price. “So now we’re offering a hip product at a price point of between €65 and €90 ($85 to $117),” he added.
Moxy will roll out exclusively in Europe—at least for the time being, Jackson said.
The first property will open in early 2014 in Milan. Other deals are signed in Berlin and Frankfurt, he said.
“We are thrilled to be able to launch the brand with Inter Hospitality as an owner and Nordic as our franchisee. With a dedicated real estate partner and an experienced operator, we expect a fast start and the exceptional customer service that is associated with all of Marriott’s brands,” Arne Sorenson, Marriott’s president and CEO, said in a news release.