Marriott International, Inc. has launched its midscale hospitality platform in Asia through a portfolio of 14 hotels in Japan belonging to global investment firm KKR, which will be converted to the Four Points Express by Sheraton brand and be primed to welcome first guests in 2H2024.
The 14 hotels are a result of KKR’s acquisition of Unizo Hotel Company, Limited and the latter’s portfolio. They are located in 10 Japanese cities, including Hakodate, Morioka, Utsunomiya, Yokohama, Kanazawa, Nagoya, Osaka, Kyoto, Kobe and Hakata, which are strong in both leisure and business travel. These will add more than 3,600 new rooms to KKR’s and Marriott’s respective hotel portfolios in the country.
According to Kyungmin Hahm, principal, real estate, at KKR, there are plans to refurbished all hotels by the end of 2024, with the aim of elevating the design and aligning it to Marriott’s brand standards.
Shawn Hill, chief development officer, Marriott International, Asia Pacific excluding China, told TTG Asia that “these relatively new assets” would get “some work done”, such as brand-specific design features and updated colours in the public areas while guestrooms would be fitted out with Marriott-standard bedding, fresh artwork and accent walls.
While Marriott’s mid-scale brand portfolio also includes City Express by Marriott and StudioRes, Hill said Four Points Express by Sheraton is the best fit for the company’s entry into Japan’s midscale lodging sector, as Sheraton “has been a very strong brand for us within Japan for many decades”.
Four Points Express by Sheraton targets value-conscious consumers with reliability, simplicity and value in both the design and guest experience. The brand is tailored to meet guests’ needs while the brand standards contemplate an efficient cost model that is intended to provide an effective pricing strategy for franchisees and help drive meaningful growth for Marriott.
As to why Japan was selected for the brand’s Asia debut, Hill said: “Japan is one of our fastest growing markets within Asia-Pacific, and represents one of the largest existing midscale markets in the region.”
The location of the soon-to-come properties also corresponds with the growing traveller interest in secondary and tertiary Japanese cities. Hill said there is a trend of repeat visitors wanting to go beyond major cities and “see what else Japan has to offer”. This was already perceptible before the pandemic, he noted.
Hill said: “They’re going to national parks, UNESCO World Heritage Sites, hot springs areas, and other cultural places. There is significant opportunity (for Marriott to get into) really interesting locations. This is part of our strategy going forward. We want to give our customers a real opportunity to see different parts of Japan.”
“Furthermore, with this brand, we could get into markets with average rates that are not as high as those in key cities and have a model that would still work for our owners and development partners. The cost to operate and build these hotels are much lower than, say, a full-service or luxury hotel,” he added.
Kensuke Kudo, managing director, real estate at KKR, said: “International and domestic tourism in Japan has rebounded strongly since the pandemic and continues to pick up pace. As demand for midscale hotels grows rapidly, we see a tremendous opportunity to offer high-quality and comfortable accommodation at great value. We are delighted to be strategic partners with Marriott, one of the world’s pre-eminent hotel companies, to launch the Four Points Express by Sheraton brand in Japan. By combining KKR’s real estate investment and operational expertise and Marriott’s deep hospitality experience, we look to deliver outstanding-yet-affordable lodging experiences to international and domestic travelers across Japan.”
Hahm shared that the collaboration with Marriott marked the start of KKR’s midscale hospitality strategy in Japan and it would continue to look out for potential real estate opportunities in this segment, which is one of its key focuses in the near future. He added that the ability to scale quickly would be important for the midscale hospitality segment.
The Four Points Express by Sheraton brand first surfaced in Türkiye this January with Four Points Express by Sheraton Bursa Nilüfer; Four Points Express London Euston is expected to open this summer.
Rajeev Menon, president, Marriott International, Asia Pacific excluding China, said in a release that the company intends to grow its midscale presence and “be everywhere our guests want us to be, with the right property in the right location, at the right price point”.
When asked where next in Asia for the brand, Hill said studies are underway to identify markets with a growing middle-class population and a rapidly expanding local economy.
“There is a very large supply of existing midscale properties in mature (destinations) like Japan. We think there is still going to be another opportunity for the brand to expand there (in Japan through conversion). We see significant growth potential across the region over the medium term,” he told TTG Asia.
