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Key Takeaways

• Marriott International will pay $355 million for Netherlands-based hotel chain citizenM, which is expected to help lift Marriott's 2025 net rooms growth.

• Adding citizenM gives Marriott a chain with 36 open hotels in more than 20 cities around the world.

• The company said if the transaction closes this year, it sees 2025 net room growth approaching 5%, as compared to its previous outlook of 4% to 5%.

Marriott International (MAR) shares advanced Monday as the hotel operator raised its 2025 net rooms growth outlook after purchasing Netherlands-based hotel chain citizenM for $355 million.

The company said the acquisition "is expected to accelerate Marriott's global expansion of its select-service and lifestyle lodging offerings, as the company continues to focus on expanding its portfolio to provide even more exciting options for guests and Marriott Bonvoy members around the world." It noted that citizenM operates 36 open hotels, comprising 8,544 rooms, across more than 20 cities in the U.S., Europe, and Asia Pacific region.

It explained that assuming the deal closes this year, "Marriott now expects full year 2025 net rooms growth to approach 5 percent." Previously, the company anticipated net rooms to increase 4% to 5%.

As part of the agreement, citizenM will become part of Marriott, with the hotels owned and leased subject to new long-term franchise agreements. In addition, citizenM could receive up to $110 million "on the future growth of the brand over a specified, multi-year timeframe."

CEO Anthony Capuano called citizenM "a unique, differentiated offering to our select-service brand portfolio as we continue to strengthen Marriott's foothold in this valuable market segment around the world."

Even with today's nearly 2% gains, shares of Marriott International remain down about 14% so far this year.

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