BALTIMORE — Since Marriott International acquired the Canada-based brand in 2015, Delta Hotels has grown from 36 to 93 hotels. Largely that growth has centered on the U.S. and North America, but the brand has also debuted with two properties in mainland China; and of the 65 signed contracts for hotels in development, 15 are in the United Kingdom.
Tony Nacci, Marriott's senior director of global brand management, who oversees three brands including Delta, said the growth strategy has been focused on increasing visibility and familiarity of the brand, noting that he could see the portfolio growing to more than 200 hotels total. Twenty-five Delta hotels are expected to open this year.
Delta is "very strong in North America, especially Canada, but we're seeing great distribution in the U.S. and also across the pond. I've got another 15 signed deals in the U.K. that are waiting to happen ... we've got others that are signed in the [Asia-Pacific] region. Once those open, Delta will be truly international," Nacci said in an interview with Hotel News Now during the recent Asian American Hotel Owners Association conference in Baltimore.
The upper-upscale brand, which Nacci describes as "entry-level full-service," also launched its first all-inclusive hotel in Mexico in 2021 — the Delta Hotels by Marriott Riviera Nayarit.
"Canada has our most distribution, but there's still opportunity in Canada and across the U.S. secondary markets," Nacci said. "We're going to open a hotel in New York City in Midtown. ... We're at a point where we're not over-distributed; we don't have too much product. The runway is still very wide."
Much of that growth will be through converting existing hotels to the brand. Of the 65 hotels in the construction pipeline, 80% are conversions.
"When you consider our competitive set, directly we look at our competitors as being Crowne Plaza, Radisson, DoubleTree, but from a conversion perspective, we've converted Holiday Inns, Hotel Indigos ... there's probably nine brands we've converted from," he said.
He cited as an example a hotel in Somerset, New Jersey, that recently converted to the Delta brand.
"It started out life as a Marriott. It transitioned to a Crowne Plaza, then it spent the last four years as an independent hotel, was completely shut down and totally renovated and just reopened as a Delta," he said.
Delta's conversion-friendly model includes modules that can drop right into an existing shell.
"We do have owners who want to build, but the reality is we know construction costs went up like 12% last year, and are projected to go up another 10% to 15% this year," Nacci said. "So the propensity to build new product isn't as great. This model we've built — almost look at it as a kit of parts. I'm going to do a renovation on the lobby — OK, keep the lobby module, put it in, because we know money's tight right now."
He said the key to a successful brand conversion is the relationship with owners, and setting clear expectations early. In identifying properties and ownership groups to work with, he said, the company's global development team is "the tip of the spear" in assessing the demand drivers in the market, whether a hotel can achieve the right price point, and whether enough capital is in place to make the transition.
"When it's really collaborative and when everybody is really concerned about taking care of the guests' needs, at the end of the day, it's going to be profitable on both sides. It's a one-on-one approach; it's a give and take," Nacci said.
"You want to have a good relationship. I never want to come to you after one year and say, 'You know what, we didn't deliver against what the goals were for the property.' ... The way our agreements are signed, they're in for the long haul. We want to make sure that we're not just dating, that we're in a good, solid relationship, that we're married for a long time."
In his time overseeing the Delta brand, Nacci said the retention rate has been almost 100% — only one hotel has transitioned to another brand.
"It transitioned to a higher brand within Marriott, because the owner went in and built a great product. We kept telling them they're overbuilding ... and sure enough, they overbuilt, so we pushed the hotel up to the Marriott brand and made them happy," he said.
As a result, Delta is one of Marriott's fastest-growing full-service brands, he said. In that space, Nacci also oversees the Tribute and Autograph Collection brands. Autograph, which launched in 2010, has 252 hotels open and 110 in the pipeline — "just off the charts" in terms of growth, he said.
For Delta guests, the full-service experience amounts to space "to be productive" without a lot of "fussiness," Nacci said.
"You're still going to see the services and the food and beverage opportunities within the hotel that equate to the full-service experience. We focus on a couple of core tenets for the brand, especially when we look at our consumer," he said.
That starts with the Delta bar, adjacent to the front desk area, which serves breakfast and dinner — "lunch isn't a requirement of a brand unless a market deems it necessary," Nacci said.
"You're still going to have room service within the hotel, and then also one of our brand tenets is a grab-and-go market for sodas, snacks, lunch items. ... We don't have concierge lounges, but we want to provide our elite Bonvoy [loyalty] members with a certain experience, and for that we have Delta Pantry. Think about it as a minibar that's free," he said.
Business transient makes up a large portion of the demand for Delta hotels, and while Marriott is "very optimistic" that travel segment is going to rebound from the pandemic, Nacci said a lot of time and thought has been put into how to make the brand appeal more to leisure travelers and families. He said programs to address that guest demographic rolled out in full force in January, and he thinks the brand is "doing a good job holding its own in that arena."