by Christopher Freeburn | March 5, 2013 12:47 pm
In what might seem like an unlikely partnership, Marriott International (NYSE:MAR) is teaming with the parent of Swedish furniture giant IKEA to provide new lodging options for budget-conscious European travellers.
Discount hotels comprise almost half of all hotel rooms in Europe – about 2.5 million rooms – but Marriott currently has no presence in that market segment. The company hopes to open 150 budget hotels under the Moxy brand over the next decade, Reuters noted.
IKEA’s Inter Hospitality subsidiary will build and own the initial Moxy hotels. The chain is not anticipated to expand outside Europe.
Rooms at Moxy hotels will be priced between 60 euros and 85 euros a night. The first hotel in the new chain will open in 2014. Each room will be about 17 square meters in size and feature a flat screen TVs. Furnishings for the hotel rooms will not comes from IKEA. Reports that IKEA would launch a hotel chain surfaced last year.
In February, IKEA was forced to recall frozen meatballs made by its food division and distributed in 13 European countries after Czech authorities detected the presence of horse meat in the meatballs.
Last week, Chinese food inspectors destroyed stocks of IKEA-produced chocolate cake, saying it did not meet food quality standards.
Shares of Marriott rose about 1% in midday trading on Tuesday.
Source URL: http://investorplace.com/2013/03/ikea-to-launch-budget-friendly-hotel-chain/
Short URL: http://invstplc.com/1fEr3bL
Copyright ©2014 InvestorPlace Media, LLC. All rights reserved. 700 Indian Springs Drive, Lancaster, PA 17601.