Service Properties Trust plans to convert 98 Marriott-flagged hotels to Sonesta brands

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The Royal Sonesta New Orleans. Sonesta may be the beneficiary of nearly 100 hotels in the U.S. that were previously flagged under Marriott brands.
The Royal Sonesta New Orleans. Sonesta may be the beneficiary of nearly 100 hotels in the U.S. that were previously flagged under Marriott brands.

Real estate investment trust Service Properties Trust has severed its management agreements with Marriott International across 122 properties, after alleging that Marriott failed to make good on a payment shortfall.

The agreements, which involve two Marriotts, two Springhill Suites, 12 TownePlace Suites, 35 Residence Inns and 71 Courtyards in 31 states, will officially terminate on Jan. 1. The agreements were originally set to run until 2035.

Service Properties Trust said it plans to transition 98 of the Marriott-flagged hotels to the Sonesta International Hotels Corp. portfolio, with the remaining 24 properties set to be sold off for just over $153 million.

Marriott International declined to comment on the matter.

Service Properties Trust owns a 34% stake in Sonesta. The Sonesta portfolio includes the Royal Sonesta, Sonesta Hotels & Resorts, Sonesta ES Suites, Sonesta Select and Sonesta Simply Suites brands.

Among the more notable Marriott hotels expected to join the Sonesta fold as part of Service Properties Trust's reflagging effort is the 356-room Marriott's Kaua'i Beach Club in Hawaii.

Service Properties Trust's fallout with Marriott follows its decision to also cut ties with InterContinental Hotels Group (IHG) in late August, after accusing IHG of failing to pay millions in guaranteed returns. Consequently, Service Properties Trust is in the process of transitioning all 103 of its IHG hotels to Sonesta by Nov. 30.

With the addition of 103 former IHG properties and 98 former Marriott properties, Sonesta's footprint will grow to over 250 properties in the U.S. and more than 280 properties globally by the end of the first quarter of 2021.

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