Marriott International announced it has reached an agreement to acquire the lifestyle brand citizenM on Monday, April 28.

citizenM is a company that specializes in unique and innovative offerings in the select-service segment. The upcoming acquisition is expected to significantly boost Marriott’s global expansion in this area. The timing is perfect as Marriott aims to expand its portfolio of exciting options for guests and Marriott Bonvoy members worldwide.

Marriott International president and chief executive Anthony Capuano stated: “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. We are excited to add citizenM as a distinct offering to our select-service brand portfolio, reinforcing Marriott’s position in this valuable market segment.”

citizenM’s founder and chair Rattan Chadha expressed enthusiasm for the partnership: “We are thrilled about our agreement with Marriott and anticipate this will greatly enhance citizenM’s global reach and brand impact. Marriott aligns with our values and culture, and I’m confident in their commitment to continue our brand’s essence in the future.”

CEO of citizenM, Lennert de Jong, added: “I am excited about our future with Marriott International. Our brand has been created for frequent travelers, and Marriott’s distribution capabilities will help us welcome new modern guests. The strength of Marriott’s development engine will allow us to expand our presence with more citizenM properties in new destinations.”

What happens next?

At the completion of the transaction, Marriott will pay $355 million to acquire the brand and related intellectual property. Following the acquisition, the citizenM portfolio will integrate into Marriott’s system, with hotels owned and leased by the seller transitioning to long-term franchise agreements with Marriott.

Stabilized fees from the open and under-construction properties are expected to be around $30 million annually, with potential earn-out payments up to $110 million based on future brand growth over several years, beginning in the fourth year post-closing. Closing is subject to customary conditions, including US regulatory approval. Assuming a completion in 2025, Marriott anticipates a full-year net room growth of nearly 5% for that year.

Morgan Stanley & Co International plc and Eastdil Secured served as financial advisors for this transaction.