Hotels Marriott seeks to expand Europe footprint with select-service brands By Danny King / March 14, 2017 Share 1 Moxy, a brand Marriott launched in 2014, plans to have about 19,000 rooms in Europe by the end of the decade. -- Last year, Marriott International expanded its European footprint by 70%, almost exclusively via its September acquisition of Starwood Hotels & Resorts and its stable of luxury and upper-upscale, full-service brands.Now the world's largest hotel company said its legacy select-service badges will start doing the heavy lifting across the pond.With Europe still accounting for fewer than 10% of Marriott's nearly 1.2 million rooms, the company said last week that its expansion efforts in Europe during the next three years would be primarily through brands that Marriott oversaw before the Starwood purchase, such as Courtyard by Marriott, Moxy and AC Hotels.Specifically, Marriott would broaden its number of Courtyard rooms in Europe to more than 22,000, either operating or under contract, from its current 10,000.Moxy, which Marriott launched in Milan in 2014, will have about 19,000 operating rooms in Europe by the end of the decade, up from 1,000 at the end of last year. Marriott outlined its Europe strategy at the International Hotel Investment Forum in Berlin last week."We plan to expand our lead in the luxury and full-service segments, to have the largest portfolio in the upscale tier and to win with millennials in the affordable lifestyle category," said Amy McPherson, president of Marriott's Europe region.Even with the addition of Starwood, Marriott's market share in Europe, which at 4.7 million rooms is slightly smaller than the 5 million-room U.S. market, is just 2.2%, compared with its 16% domestic market share.In addition to playing catch-up in Europe, an emphasis on select service would balance the scales for Marriott, which is upscale-heavy in Europe. Of its 105,000 rooms on the Continent at the end of last year, more than three-quarters were full-service properties. That includes approximately 28,000 rooms gained through the acquisition of Starwood's upper-upscale Sheraton, Westin and Le Meridien brands, and the 8,000 luxury rooms at Starwood's Luxury Collection, W and St. Regis properties."Luxury and upscale are well serviced by both [Marriott and Starwood] chains and well-established independents in most countries," said Peter O'Connor, Paris-based senior market analyst at Phocuswright. "But as you move downward, there is much potential to displace unbranded hotel stock with more modern, standardized products with a recognizable brand. For a hotel chain, this is where the market in Europe is."The strategy also signals some confidence, especially with regard to demand among younger travelers. The European hotel market appeared to gain momentum toward the end of 2016 after years of inconsistent performance by a combination of economic swings and, more recently, terror attacks in Paris, Brussels, Istanbul and Nice, France.Last year, Europe's RevPAR fell 3% from a year earlier after jumping 9.4% in 2015. Marriott CEO Arne Sorenson noted in the company's fourth-quarter earnings call last month that demand lagged in Paris, Brussels and Istanbul, while performance in the U.K., Germany, Spain and Russia was particularly strong. He also forecasted that RevPAR at Marriott's Europe hotels will rise in the low single digits this year.O'Connor said Marriott could face challenges from a combination of established hotel operators such as Paris-based AccorHotels with its more moderate Ibis Styles chain, and younger companies noted for their technological innovations and millennial-targeting efforts, such as CitizenM and Zoku. "Marriott's strength has always been strong sales and distribution from the U.S. source market rather than product innovation," O'Connor said.But he added, "In most European countries except the U.K., most of the hotel stock is unbranded and ripe for displacement, and you have a massive market opportunity."