Marriott International Expands Modular Construction Initiative

Company Expects to Sign 50 Select Brand Hotel Deals in North America in 2017 that Incorporate Prefabricated Rooms

In an industry first, Marriott International (NASDAQ: MAR) today unveiled a comprehensive expansion to its initiative to drive adoption of modular construction of hotels in North America. In addition, the company said it expects to sign 50 hotel deals in 2017 that incorporate prefabricated guestrooms or bathrooms – more than 10 percent of the Select Brand signings expected for the region this year.

“Construction is the next frontier for innovation, and modular is leading the way,” said Eric Jacobs, Marriott International’s Chief Development Officer of Select Brands, North America. The announcement was made at the company’s CONNECT conference – a meeting of Marriott hotel owners - in Los Angeles at the JW Marriott. More than 1,300 owners are expected to attend the conference, making it the largest in the company’s history. “By working with our pre-approved modular partners, owners can open hotels faster, put associates to work earlier and generate revenues sooner. It’s another example of Marriott’s focus on optimizing our partners’ return on investment.”

With the modular process, hotel guestrooms and/or bathrooms are manufactured away from the hotel site in a climate-controlled factory.  Once made, the prefabricated units get transported to the hotel site, where the hotel’s base podium has already been built.  The units get stacked into place by crane, at which point workers complete the building on-site including electrical, plumbing and other finishing work.  Unlike traditional methods, this process avoids time-consuming challenges that can delay construction such as skilled labor shortages and poor weather.

Marriott’s Modular Initiative Follows Years of Research

Though more common in Europe and Asia, the modular method is gaining new attention in the U.S. as construction demand across the country eclipses the number of available skilled workers in all real estate classes. Marriott began researching modular construction in 2014 by identifying companies that could potentially manufacture hotel spaces. After a rigorous selection process, Marriott then launched its pilot modular initiative at its 2015 CONNECT conference. Since then, the company has spent time working with select owners who were early adopters of modular construction for their projects, as well as educating lenders about financing such projects.

“We believe the modular process will be a game changer for our valued development partners, especially during a time when labor shortages can be a challenge to timely openings,” said Karim Khalifa, Marriott International’s Senior Vice President of Global Design Strategies. “As modular construction gains popularity and acceptance in the hotel industry, costs can also decrease over time.”

Modular Rooms and Partners to be Featured at CONNECT

This year’s conference leverages Marriott’s learnings with modular since last year, and features a special outdoor exhibit in downtown Los Angeles of actual prefabricated rooms by its approved modular partners. Attendees can see:

  • A Courtyard guestroom produced by Guerdon Modular Buildings;
  • A SpringHill Suites guestroom produced by Champion Commercial Structures; and
  • An AC Hotels, Courtyard and Residence Inn bathroom module, produced by Oldcastle SurePods

One Modular Hotel Open and Many More to Come

So far, Marriott has opened one hotel under its modular initiative - the 97-room Folsom Fairfield Inn & Suites in Folsom, California.

This hotel features the work of Guerdon, which is based in Boise, Idaho. At its Boise plant, Guerdon produced units that contained two fully outfitted rooms – including bed, desk and toilet – plus a connecting corridor. The units were then transported to Folsom for completion. The hotel opened two months ahead of time, enabling the owner to generate revenue sooner than anticipated.

Marriott has four more hotels in various stages of construction under this initiative, including a Courtyard in Pullman, Washington, and an AC Hotel in Oklahoma City, both of which are set to open in the second quarter. The other two expected to open later this year are AC Hotels in Louisville and Chapel Hill.

Time lapse video of modular construction process for the Courtyard Pullman in Washington: