SVC cancels Marriott agreement and boosts Sonesta extended stay portfolio

George Sell George Sell Uploaded 08 October 2020

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US: Following a similar situation with IHG in August, Service Properties Trust (also known as SVC) has severed its management agreements with Marriott International across 122 properties.

SVC alleges that Marriott has failed to make good on a payment shortfall. The agreements, which involve two Marriott-branded hotels, two Springhill Suites, 12 TownePlace Suites, 35 Residence Inns and 71 Courtyards, by January 31. They 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 for more than $153 million.

Marriott International declined to comment on the matter.

Service Properties Trust owns a 34 per cent stake in Sonesta. Its portfolio includes the Royal Sonesta, Sonesta Hotels & Resorts, Sonesta ES Suites, Sonesta Select and Sonesta Simply Suites brands. The new arrangement will add 40 extended stay hotels to its portfolio.

SVC also cut ties with IHG in late August, and is transitioning all 103 of its IHG hotels to Sonesta by the end of November.

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.

"We're proud that SVC continues to grow its relationship with Sonesta by entrusting us with management of another sizeable portfolio of their hotels and resorts", said Carlos Flores, president and CEO, Sonesta International Hotels Corporation. "We are prepared and confident in our abilities to ensure these hotels receive the same level of exceptional care and support as Sonesta's existing 80 plus properties. We're thrilled to welcome these new hotels to our growing portfolio of destinations."

 

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