The big get bigger by going smaller.
Marriott International has reached an agreement to acquire citizenM, a select-service, lifestyle-type brand known for its tech-forward approach, modular design practices, communal public spaces and infinitesimal accommodations, a deal that Marriott International CEO said gives Marriott Bonvoy members “unique accommodations at an affordable price.”
Upon closing of the transaction, which does not include any real estate, Marriott will pay $355 million to acquire the brand and related intellectual property. The citizenM global portfolio currently consists of 36 operating hotels (8,544 rooms), across more than 20 cities in the U.S., Europe and Asia Pacific, including New York, London, Paris and Rome. The brand’s current pipeline includes three under-construction hotels totaling over 600 rooms that are anticipated to open by mid-2026, with the prospect of additional growth now that it’s under the auspices of Marriott over the next decade.
Following closing, the citizenM portfolio will become part of Marriott’s system, with the hotels owned and leased by the seller subject to new long-term franchise agreements with Marriott. Stabilized fees for the open and under construction pipeline portfolio are anticipated to be approximately $30 million annually. The seller may also receive earn-out payments up to $110 million that are based on the future growth of the brand over a specified, multi-year timeframe. These payments would not begin until the fourth year following closing.
The deal gives Marriott another brand to franchise within its asset-light strategy, a brand that has become wildly popular with budget-minded younger travelers, solo travelers and those who are more focused on the destination than having a large, spacious room. It also gives Marriott a slight bump in net unit growth in a low-growth market where new development has been stymied by a higher cost of cost of capital. Assuming closing of the transaction in 2025, Marriott said it now expects full-year 2025 net rooms growth to approach 5%.
CitizenM is now a global brand but has European roots, founded in the Netherlands by Rattan Chadha in 2005 and having opened its first hotel in 2008 at Amsterdam Schiphol Airport.
In 2019, Singapore’s sovereign wealth fund GIC acquired 25% of citizenM for €2 billion, inclusive of real estate. In March of 2024, it was revealed that citizenM was considering options for a potential sale, with advisory from Morgan Stanley and Eastdil Secured.
“As we continue to drive best-in-class experiences for travelers, today’s announcement builds upon Marriott’s commitment to enhance options for guests and Marriott Bonvoy members,” said Capuano in a statement and on LinkedIn. “We are thrilled to add citizenM as a unique, differentiated offering to our select-service brand portfolio as we continue to strengthen Marriott’s foothold in this valuable market segment around the world. Marriott has a proven track record of growing acquired brands significantly by leveraging our global development ecosystem, the benefits of our industry-leading affiliation cost structure, and the power of our award-winning Marriott Bonvoy loyalty platform.”
CitizenM shook up the hotel industry when it came on the scene with its unique design characteristics and services that included, for instance, self-check-in desks, colorful, comfortable spaces that invited a communal atmosphere and rooms where beds were pressed against large windows. A stripped-down labor model allows the properties to be operated with less overhead.
“We are very excited about our agreement with Marriott and look forward to this pivotal next step for our future growth. I envisage this relationship will greatly enhance citizenM’s global reach and brand impact. Marriott as an organization shares our values and culture, and I am confident in their deep commitment in continuing our brand’s DNA into the future,” said Chadha.
“I am excited about citizenM’s future with Marriott International. citizenM was created for frequent travelers, and Marriott’s distribution capabilities will allow us to welcome new modern guests. With the strength of Marriott’s development engine, we look forward to the prospect of many additional citizenM properties in new destinations around the world. We will continue to own our real estate and operate all our hotels. This relationship will allow us to work together to maximize returns,” said Lennert de Jong, CEO of citizenM.
Morgan Stanley & Co. International plc and Eastdil Secured acted as financial advisors to the seller in this transaction.
