IKEA, an international success with cheap, stylish prefabricated furniture,is going into the hotel business - and the rooms will be prefabricated too. An IKEA affiliate is teaming up with hotel giant Marriott International to create low-cost hotels in Europe .
Marriott unveiled its designs today for Moxy, a new three-star hotel brand it is developing with the Inter IKEA Group, the parent company of the IKEA furniture brand. A new website from Marriott introduces Moxy hotels . According to the website, Moxy will be "the potency of style, innovation and tech-savvyness."
Inter IKEA is investing around $500 million for around 50 budget hotels in Europe in the next five years, Marriott executives said, in a partnership with them and a European hotel operator.
The hotels won't use IKEA furniture or its designers. Instead, said the Wall Street Journal, Inter IKEA came up with the idea to keep construction costs down of using use rooms prefabricated offsite and then assembled like IKEA furniture.
Marriott says guestrooms will be functional with upscale bath amenities, large flat screen televisions and built-in USB ports located within each wall socket. There will be free wifi.
Each room will also have a floor to ceiling signature “art wall” selected to reflect the local city or surroundings.
Marriott and Inter IKEA have targeted the U.K. and Germany as their top markets for Moxy, followed by Italy, Austria and the Netherlands. In fact the first hotel, in Milan, is supposed to open in a year, said the WSJ.
Peter Andrews, who directs the IKEA hotel operation, said they aim to build the hotels - from 150 to 300 rooms - in or near office parks, airports and train and subway stations.
Marriott Chief Executive Arne Sorenson, said, "This is a fresh new take on the economy segment."
It will combine value with style, he said, adding, "Too much of the value product you see in Europe is devoid of style."
The rooms,priced around £50 ($78), were designed in Amsterdam and elsewhere by a hotel operations company called Nordic Hospitality A/S, which would operate the hotels.
Marriott is the franchiser, contributing its customer and reservation database, and would own the brand, said the WSJ.
Inter IKEA executives said hotels seemed to be relatively stable amid Europe's economic shifts. However, guests who might have used more expensive hotels are saving money by trading down, they said.
Europe's budget hotel business includes Accor SA's Ibis brand, U.K.-based Travelodge. and U.S.-based Choice Hotels, which owns Comfort Inn and Quality.
Occupancy at budget hotels in Western Europe increased to 70% last year from 67.1% in 2011,but there was a 3.8% decline in average rates to $82.81.
Marriott set a goal in 2010 to double its presence in Europe by adding 40,000 rooms. So far, they're at 16,000 rooms - so the new budget brand could speed them on their way.
Ibis has 1,277 low-cost hotels on the continent.