Marriott International will sell its ExecuStay corporate housing business to Oakwood Worldwide.
ExecuStay has more than 700 locations across the U.S. Los Angeles-based Oakwood reports its worldwide inventory as about 25,000 apartments.
Under the terms of the agreement, expected to close by the end of the month, Oakwood will maintain ExecuStay as a separate brand.
The two companies also signed an eight-year preferred-provider agreement, in which Marriott will serve as the preferred hotel provider for Oakwood guests and vice versa. ExecuStay guests will continue to accrue Marriott Rewards points.
Financial terms of the agreement were not disclosed.
Marriott acquired the ExecuStay business in 1999. David Grissen, Marriott's president for the Americas, said in a statement, “ExecuStay's business model of leasing residential premises to customers was meaningfully different from Marriott International's long-term business strategy."
The deal does not affect Marriott Executive Apartments, a separate brand of corporate apartments.
Marriott, the largest publicly traded U.S. hotel company by sales, continues to shed non-core businesses.
The company last year spun off its vacation-rental division into a separate public company. Marriott Vacations Worldwide Corp. generated $1.61 billion in revenue last year, compared with $12.3 billion for Marriott International.
Last year, Marriot’s revenue from its owned, leased and corporate-housing operations totaled $1.08 billion and accounted for 8.8% of the parent company’s revenue, down from 8.9% in 2010. The division threw off $140 million in operating profit last year, up from $91 million a year earlier.
Marriott reports its first-quarter earnings on Wednesday.
Source: Business Travel News
Travel Weekly's Danny King contributed to this report.