Marriott to Lose Over 100 Properties in Default

By Paul Riegler on 27 September 2020
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Marriott International stands to lose over 100 properties come November, in second major hotel default reported amidst the coronavirus pandemic.  The world’s largest hotel chain owes Service Properties Trust, which owns the hotels, over $11 million.

“Marriott failed to meet the termination threshold of 80% of owner’s priority return through August,” the company said in a statement. A “failure to pay the shortfall will trigger SVC’s termination rights.”

The move comes on the heels of a similar default by InterContinental Hotels Group, which lost 103 hotels to Service Properties Trust.

Service Properties Trust currently operates two Marriott-branded hotels, two Springhill Suites, 12 TownePlace Suites, 35 Residence Inns, and 71 Courtyards across 31 states.

The owner plans to transition the properties to Sonesta International Hotels, to be reflagged under various Sonesta brands.

Marriott has until October 4, 2020, to cure the default.

At press time, Marriott had not responded to a request for comment on the announcement.

Sonesta was founded in 1937 and its past portfolio included such storied properties as the Plaza in New York City and the Whitehall Hotel in Chicago.  In addition to the Clift in San Francisco, the chain owns some 80 properties in seven countries, which fall into either full service properties such as under the Royal Sonesta brand, or limited service properties under the Sonesta ES Suites brand.

(Photo: Accura Media Group)

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