Marriott Expands Modular Construction Initiative

By Keith Loria, Contributing Editor

Above, time lapse video of modular construction process for the Courtyard Pullman, Wash.

Marriott International has unveiled a comprehensive expansion to its initiative to drive adoption of modular construction of hotels in North America, with plans to sign 50 hotel deals in the upcoming year.

The company hopes to utilize the prefabrication process on roughly 13 percent of all deals for the region this year, which would be an industry first in North America.

“We want to start a movement to change the industry and feel the modular process will be a game changer for our valued development partners,” Karim Khalifa, Marriott International’s senior vice president of global design strategies, told Commercial Property Executive. “As modular construction gains in popularity, costs will also decrease over time.”

Marriott launched its modular push to owners in December of 2015 and has already opened one hotel using this approach in Folsom, Calif. Four others are in various stages of completion across the U.S.

“Our franchisees are really real estate entrepreneurs and this supports them being successful,” Khalifa said. “We like it because it’s higher quality and a much more predictable outcome for us. We like to go into new places and find easy ways for our owners to get in at a quality level.”

In the modular process, hotel guestrooms and/or bathrooms can be manufactured away from the hotel site in a climate-controlled factory. Once constructed, the prefabricated units get transported to the hotel site, where the hotel’s base podium has already been built.

“The units then get stacked into place by crane, at which point workers complete the building on-site including electrical, plumbing and other finishing work,” Khalifa said. “Unlike traditional methods, this process avoids time-consuming challenges that can delay construction such as skilled labor shortages and poor weather.”

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 on average has about 100,000 rooms a year in the pipeline and the hope is that it can get to a point where 50,000 are built in a modular one day.

According to Khalifa, the company first started researching modular construction in 2014 and reached out to several companies about possibly manufacturing hotel spaces. After a rigorous selection process, Marriott 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.

Currently, Marriott has four other hotels in various stages of construction under this initiative, including a Courtyard in Pullman, Wash., 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, Ky., and Chapel Hill, N.C.