Marriott positions a triple threat

NASHVILLE, TN—They say three’s a crowd, but that’s not the case with multi-branded hotel developments. Marriott’s first triple-branded hotel, set to open mid-year in 2018, will not only share amenities but also consolidate behind-the-scenes operational costs to reduce ongoing expenses. 

While not the first triple-branded hotel in the U.S.—White Lodging opened the River North hotel triplex in Chicago in 2013—the $137-million, 470-room property from Marriott International located here represents a potential game-changer for the Bethesda, MD-based chain.

With 52 completed dual-branded buildings, 84 approved and 32 under construction as of June 2016, Marriott’s dual-branded hotel footprint is greater than that of any other hospitality company in the world, according to Marriott. A recent example includes the dual-branded Courtyard by Marriott and Residence Inn in New York’s Times Square, which occupies a 68-story building, now the tallest single-use hotel in North America. 

“In many ways, the hotel industry is a copycat industry,” said Tony Capuano, EVP and global chief development officer, Marriott International. “Developers have looked with great interest at dual-branded projects. From a developer’s perspective, they look at construction and operations efficiencies from combining multiple brands under a single roof. They have been equally enthused by the consumer benefits and the ability to offer different lodging products within one property in dynamic markets.”

The $137-million, 470-room property in Nashville, TN, will contain an AC Hotels by Marriott, SpringHill Suites by Marriott and Residence Inn by Marriott.

In this instance, Atlanta-based development group North Point Hospitality Group saw a vibrant market in Nashville in need of a lodging product to meet the needs of three distinct consumer segments. According to a 2015 executive summary from CBRE on the Nashville market, underlying economic conditions have driven performance in many industries, including lodging. “Nashville continues to be a popular leisure destination with a strong base of corporate demand,” said Capuano. “The ability to offer three different product plays well in that environment.”

And bringing together three brands from the same global chain, all under one umbrella, offers greater operational and development efficiencies, as in the case of Marriott’s first triple-branded development. “When you think about the various components of constructing a hotel, you’re not building three of everything,” said Capuano. “You are building a single, integrated back-of-house space; a single, integrated back-office space; a single office for accounting; and a loading dock and security office. There are many design efficiencies that can be realized in a multi-branded property. Once the hotel opens, the operator can realize streamlined operation efficiencies, which can drive returns.”

Having developed properties—including those franchised by Marriott International—in high barriers to entry markets in the U.S., North Point Hospitality met a number of qualifications as an ideal franchise partner for the global chain. These include the company’s understanding of Marriott’s service culture and commitment to building high-quality products in keeping with Marriott’s brand standards. “North Point checks all those boxes in spades,” said Capuano. “They have been and continue to be a great partner for us. Their track record in terms of quality construction and operation under our flags gave us confidence to approve them for this project.” 

Situated in Nashville’s emerging SoBro neighborhood, the hotel will contain an AC Hotels by Marriott that will occupy 209 rooms in one wing and a combined SpringHill Suites by Marriott and Residence Inn by Marriott in the adjoining wing, with 125 rooms and 136 rooms, respectively. Ground broke July 2016 on the L-shaped, 21-story building, which was designed by the Lawrenceville, GA-based architectural firm of Lindsay Pope Brayfield Clifford & Associates. JE Dunn Construction will serve as general contractor of the new hotel, and Acumen Development Partners will spearhead construction management.

North Point Hospitality initially intended to develop a dual-branded Residence Inn/SpringHill Suites property for the site at Nashville, but reconsidered once Marriott International began rolling out the AC Hotels by Marriott brand. The developer then worked out a deal with Marriott in which the Nashville development was switched to a triple-branded project. The global chain plans to allow North Point to develop a SpringHill Suites on a different site at a future date.

“The more we studied the dynamics of the market, the more we realized we have the best location not only for AC and Residence Inn, but also the SpringHill Suites,” said Jay Patel, president and CEO of North Point Hospitality. “Our research showed us the market could support all three, so we said, ‘Why not build all three?’—thus evolving into the triple-branded hotel.”

Though customers will see three brand logos on the outside of the building, the development will offer three distinct hospitality experiences inside. From a development standpoint, having three brands allows North Point Capital to create larger than normal amenities and spaces uncommon for a stand-alone SpringHill Suites, Residence Inn or AC Hotel. 

“For example, we have an elevated resort-style pool with an indoor/outdoor pool bar on the sixth floor, a rooftop patio and bar on the 21st floor, as well as banquet-style, column-free meeting space on the 21st floor with soaring 16-ft., floor-to-ceiling windows offering natural light and an unobstructed view of downtown Nashville,” said Patel. “Additionally, we will have three different restaurant/retail offerings on the ground floor of the hotel. Guests of all three hotels will have direct access to all the aforementioned amenities.”

White Lodging opened the River North hotel triplex in Chicago in 2013, which brought together three brands—Aloft, Hyatt Place and Fairfield Inn & Suites—each from different global chains.

Each of the three brands offers a guestroom experience that varies based on the needs of the guest. “For example, those looking for a room equipped with an in-suite kitchen containing full-sized refrigerator, stove, microwave and coffeemaker, will benefit from staying in the Residence Inn, while other guests may find more value in the SpringHill Suites guestrooms designed with separate areas to sleep, work and relax,” said Patel. “Others may be looking for the modern look and feel of the AC guestroom.”

All guests will be able to take advantage of the various F&B outlets located throughout the property. “More specifically, the AC brand features its AC Kitchen serving stylish, European-inspired breakfast offerings, as well as the AC Lounge designed to be a co-working space by day and the hub of social buzz by night,” said Patel. “Guests staying at a traditional Residence Inn or SpringHill Suites would not have access to F&B offerings such as these within the hotel.”

Over the last few years, Nashville’s SoBro neighborhood has been transforming into a bustling area filled with restaurants, shopping and entertainment, according to Marriott International and North Point Hospitality. The hotel will be situated near to the 2.1-million-sq.-ft. Music City Center convention center. “The Nashville market is thriving all around. From leisure travelers to business travel, Nashville is where people want to be,” said Patel. “With the rapid increase in travelers, this project will help fill the need for more rooms and help bring in larger conventions for groups that desire hotels in very close proximity to Music City Center.” 

Marriott International already has a broad footprint across metro Nashville. The addition of a triple-branded development provides consumers with even more lodging options in a particular submarket of Nashville. “This is a perfect storm,” concluded Capuano. “We have a strong and growing vibrant market, a great franchise partner, three brands we were anxious to deploy in this area of Nashville and a high degree of confidence in North Point’s ability to execute.” HB

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