Marriott to launch conversion brand to compete with Spark by Hilton

Marriott has announced that it will create a conversion-friendly brand to compete with Spark by Hilton, which was launched by the U.S. chain in January 2023. The CEO of the world’s largest hotelier, Tony Capuano, announced that details of a “conversion-friendly global brand” could be finalized within a month.

Marriott’s interest in conversion brands is based directly on the current interest rate market, where borrowing for new construction is difficult due to a higher rate environment that, even if it drops, is unlikely to return to pre-pandemic levels, Capuano said.

Marriott, Capuano said, has “a history of doing conversions when we find an environment like this, where conversions are important because of the debt markets. We find that Bonvoy members are looking for pricing and value properties in the mid-tier. Given the climate for new construction debt, having a platform that can pivot to conversions, the timing seems perfect.”

Although lending is constrained, Marriott CFO Leeny Oberg added that there is currently a more confident climate: “We’ve seen an increase in construction starts in the U.S. by about 25% compared to a year ago.” Conversions account for about 30% of Marriott’s new projects.

Marriott has announced that it continues to expand in the Caribbean and Latin America in all segments, but especially in luxury and all-inclusive. In addition, it will push the midscale to expand its City Express offerings.