Marriott planning suite hotels in 3 smaller cities


Marriott Corp., whose hotels are found in such major cities as New York and London, is looking for new business in the Appleton, Wisconsins, of the world.

Residence Inn by Marriott plans to build three 66-suite hotels in smaller markets. Suites in the hotels, which can be built on less than two acres, will be no smaller than those in the average, 120-room Residence Inn.

The first scaled-down hotel, co-developed by Residence Inn and Fargo, N.D.-based Tharaldson Enterprises, is scheduled to open in Appleton in November and will be operated by Tharaldson. Two other prototypes, also to be owned and operated by Tharaldson, are scheduled to open next year in Rockford and Peoria, Ill.

The small hotels will "open the door to new development opportunities in financing hotels," said Joe Okan, director of marketing for Tharaldson. More important, they are better suited to small markets that cannot support 120-room hotels, he said.

The new hotels will be built on no more than 1.4 acres, at a per-room cost of about $40,000 excluding land costs, said Mike Ruffer, executive vice president and general manager of Residence Inn by Marriott.

Room rates will be $65 to $75, compared with $75 to $105 in big cities, Mr. Okan said.

Michael L. Mead, an analyst with Legg Mason Wood Walker Inc. in Baltimore, said that by building on small sites, Marriott can place the hotels near highways and other high-traffic areas.

"As long as they can successfully scale down costs associated with the facilities, they can succeed in any market," he said. "What you find in the hotel industry is that the traditional full-service hotels are not a growth vehicle any more. The growth is more in the upper-end, limited-service hotel which, like Residence Inn, offers a very nice room at a very nice price."

Residence Inn offers such amenities as fully equipped kitchens, free grocery-shopping service, and laundry and valet service.

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