How to Finance a City Express by Marriott Franchise: Conversions
By Marc Cornella
A City Express by Marriott franchise loan usually starts with a hotel that already exists. Marriott brought this affordable midscale brand into the United States and Canada as a conversion-friendly flag, so most early deals involve buying or refinancing an operating hotel and paying for the work needed to bring it up to brand standard, rather than financing ground-up construction.
This article covers the brand, how its conversion model shapes the budget, the fees to look for in the disclosure document, SBA and conventional options and what lenders review. US Professional Funding is not affiliated with, sponsored by or endorsed by City Express by Marriott; the name is used only to describe the business. Figures from the franchisor’s disclosure document and company materials can change, loan programs vary, and every loan is subject to approval. Nothing here is legal, tax or investment advice.
City Express by Marriott Franchise Loan at a Glance
- Segment: affordable midscale hotels for business and leisure travelers
- U.S. launch: Marriott announced the brand’s expansion into the United States and Canada in October 2024, after developing it under the name “Project Mid-T by Marriott”
- Growth: Marriott reported 100 signed agreements in the United States and Canada as of December 2025, with six hotels opened during 2025
- Development model: built for conversions of existing hotels, with new construction described by Marriott as a later opportunity
- Typical amenities: modern guest rooms, complimentary breakfast, high-speed internet, a fitness center and a business center
- Fees and investment: set out in the current disclosure document, which was not publicly available for this article; request the latest version from the franchisor
- SBA Franchise Directory: listed as City Express by Marriott (code S8680), with a note about third-party management agreements
What Is City Express by Marriott?
City Express began as a hotel brand in Latin America. Marriott acquired the City Express portfolio in May 2023, adding more than 17,000 rooms across Mexico, Costa Rica, Colombia and Chile, and the company now cites more than 150 City Express locations in Latin America. The family includes City Express by Marriott as the flagship along with City Express Plus, City Express Suites, City Express Junior and City Centro.
In October 2024, Marriott announced that City Express by Marriott would enter the United States and Canada as its first affordable midscale transient brand in that region. The company described a light operational model, functional modern design and a focus on quality and simplicity, with owners gaining access to Marriott’s sales, distribution and marketing systems. Hotels join Marriott’s loyalty program when they open.
Why the conversion model matters to lenders. Many City Express projects are older hotels being re-flagged. The lender is underwriting a property with its own history under another name, plus a renovation and a brand change. That puts the building’s condition, the scope of the improvement plan and the owner’s ability to manage a transition at the center of the credit decision. Our article on branded vs. independent hotels covers how a flag can change value and financing.
City Express by Marriott Franchise Costs
Because nearly every early U.S. project is a conversion, there is no single price tag. The total depends on whether you already own the hotel, the purchase price if you are buying, the building’s condition and the renovation the brand requires.
Initial franchise fee
The application or initial franchise fee, any per-room component and the fee for a change of ownership are disclosed in Item 5 of the disclosure document. We could not review a current public copy, so we do not quote a fee. Confirm whether it differs for conversions, new construction and transfers.
Purchase price or existing real estate
For a buyer, the largest line is the hotel itself: land, building and existing furniture. A current owner converting an independent or differently branded hotel may have no purchase at all, but may refinance an existing mortgage as part of the conversion.
Conversion renovation and the improvement plan
Before approving a conversion, a hotel brand typically inspects the property and issues a property improvement plan listing what must change. Marriott said one hotel near Dulles Airport signed in 2025 would undergo a full renovation before joining the brand, while its overall pitch to owners centers on speed to market. Scope varies widely. See our article on financing a hotel property improvement plan.
Furniture, fixtures, equipment and technology
Guest room case goods, bedding, televisions, the breakfast area, lobby furniture, fitness equipment, signage and reservation and property management technology can all appear in a conversion scope. Some items may be reusable; others must be replaced.
Opening costs and working capital
Conversions bring training, pre-opening marketing, uniforms, supplies and a period when some rooms may be out of service. Owners also need cash to carry the hotel while it builds business under the new name.
Estimated initial investment
Item 7 of the disclosure document gives the franchisor’s estimate of total initial investment. A conversion budget should be checked against these categories:
- Initial franchise or application fee
- Purchase price or refinance payoff for the land and building
- Improvement plan work on rooms, bathrooms, public areas and exterior
- Furniture, fixtures, equipment and signage
- Technology systems and installation
- Training, pre-opening marketing and supplies
- Professional fees, permits, insurance and deposits
- Additional funds for working capital during the transition
Ongoing Fees and How They Affect Your Loan
Hotel brands generally charge a royalty and a program or marketing fee based on gross rooms revenue, plus technology, reservation and loyalty-related charges. The exact City Express by Marriott figures appear in Item 6 of the disclosure document; we could not verify them for this article.
For a lender, these fees come off the top. Repayment ability is measured on cash flow left after operating expenses, management fees, franchise fees and a reserve for replacing furniture and equipment. A projection that leaves any of these out overstates the debt the hotel can carry.
Renovation cycles. Hotel franchise agreements typically require periodic upgrades to keep properties consistent with brand standards. Lenders want the loan term and that renovation schedule to line up.
Franchisor Requirements for New Owners
Marriott approves both the owner and the hotel. In the materials we reviewed, it does not publish a fixed minimum net worth or liquid capital figure for this brand, so expect a review tailored to the project and market.
In general, the applicant submits property and ownership information, the brand inspects the hotel and issues an improvement plan, the parties sign the franchise agreement, and the owner completes renovation and training before reopening under the new flag. Brand approval and loan approval depend on each other, so many owners run them in parallel.
Ways to Own a City Express by Marriott
Convert a hotel you already own. This is the core path. An owner of an independent or differently branded midscale hotel applies to re-flag it, and financing often combines a refinance of existing debt with funds for the improvement plan and transition.
Buy a hotel and convert it. A buyer acquires an existing hotel and converts it at or soon after closing. The lender underwrites the price, the renovation and projected results under the new flag, and wants brand approval in hand before funding. Our page on hotel acquisition financing explains the basics.
Buy an existing City Express by Marriott. As the U.S. system grows, resales will become possible. A buyer would go through Marriott’s change of ownership process and could inherit a performance record under the brand.
New construction. Marriott has described new builds as a later opportunity. A ground-up project would involve land, entitlements, construction financing and a ramp-up period; our page on hotel start-up and development financing covers that path.
Financing Options for a City Express by Marriott Franchise
SBA 7(a) loans
An SBA 7(a) loan can be used to buy an existing hotel and, depending on program rules and the lender, to fund renovation, brand fees and working capital in the same loan. The 7(a) program maximum is currently $5 million, and program rules can change. Many midscale conversions fall in a size range where 7(a) is worth evaluating.
SBA 504 loans
SBA 504 loans are built for owner-occupied real estate and long-lived fixed assets. A hotel purchase or major renovation can fit a 504 structure, which pairs a bank loan with a certified development company loan and a borrower contribution, subject to program rules.
Conventional hotel loans
Experienced owners with strong liquidity may prefer conventional business loans, especially for larger hotels or portfolios beyond SBA limits. Renovation funds are often held back and released as work is completed.
Furniture, fixtures and equipment financing
Some owners finance guest room furniture, televisions, fitness or laundry equipment, or technology separately. The primary lender will count that payment when measuring repayment ability.
Working capital and lines of credit
A conversion can take rooms out of service while revenue builds under the new name, so owners may need a cushion for payroll, supplies and marketing. Our page on hotel working capital and lines of credit explains the options.
Seller financing on purchases
When buying a hotel to convert, part of the price may sometimes be carried by the seller. A seller note is typically subordinate to the primary loan, and SBA rules and lenders may limit its structure.
SBA Loans for City Express by Marriott Franchisees
SBA-backed loans are made by participating lenders with an SBA guarantee on part of the loan. For a franchise, the lender also confirms the borrower controls its own business, and the SBA Franchise Directory helps with that review.
The directory listing. City Express by Marriott appears on the SBA Franchise Directory under code S8680. A listing can simplify the lender’s review of the franchise agreement, but it does not approve any borrower or guarantee a City Express by Marriott franchise loan.
What the directory note means. If the applicant also operates under a management agreement with a third party, the lender or certified development company must review that agreement under SOP 50 10 to determine whether the applicant and the management company are affiliated. The applicant is not eligible if the management company is, or is affiliated with, the franchisor. In plain English, you can hire an independent management company, but a hotel managed by Marriott or a Marriott affiliate would not qualify for SBA financing.
Application tips. Have the franchise approval, the improvement plan budget, any management agreement, the purchase contract or mortgage statement and a sources and uses statement ready, plus personal financial statements, tax returns and résumés. Our comparison of SBA 7(a) vs. 504 loans for hotels can help you choose a structure.
How Lenders Evaluate a City Express by Marriott Deal
Personal credit and financial history. Lenders review each principal’s credit, tax returns and debts, and significant owners typically sign personal guarantees.
Net worth and liquidity. Conversions draw on cash in ways that are easy to underestimate: renovation overruns, rooms out of service and time to build business under a new name. Lenders want reserves left after closing.
Hotel experience. Prior hotel ownership or management carries significant weight. A first-time owner can strengthen the request by partnering with an experienced operator or hiring an independent management company.
Business plan and projections. Lenders expect occupancy, average daily rate and revenue per available room projections before and after conversion, supported by a market study where possible. Explain why the flag should improve results compared with the current name, and include every brand fee and a replacement reserve.
The disclosure document and franchise agreement. Lenders review the term, renovation obligations, transfer rules and termination rights, and want the franchise term to run at least as long as the loan.
The property and its history. Expect an appraisal, a property condition report, an environmental review and several years of operating statements. Deferred maintenance on roofs and mechanical systems can matter as much as the brand scope. Our article on hotel loan requirements walks through how these are underwritten.
Conversion Renovations and Hotel FF&E
The renovation is the heart of a City Express conversion. A light scope may cover signage, soft goods, paint and technology; a heavier one can include guest room furniture, bathrooms, the breakfast area and exterior work. Three financing questions matter: will renovation money be funded at closing, held in a reserve or paid from the owner’s cash; how many rooms will be offline and for how long; and does the improvement plan schedule match the loan’s draw schedule and the brand’s opening deadline?
Multi-Unit Growth and Development Agreements
Midscale conversions appeal to owners who already hold several hotels and want a Marriott option for older properties. Each hotel typically has its own franchise agreement, approval and improvement plan, so growth happens one property at a time.
Financing the next conversion usually starts with the results of the first. Lenders look at global cash flow, remaining liquidity and management depth. SBA limits apply across all of a borrower’s SBA loans, so larger portfolios often shift to conventional financing.
Real-World Scenarios
An independent owner re-flags a highway hotel. An owner of a well-kept independent hotel wants a loyalty program and reservation system behind it. The owner refinances the existing mortgage, adds funds for the improvement plan and times the work for the slowest season.
A buyer acquires a tired hotel to convert. A buyer with hotel experience contracts to purchase an older midscale property. The lender sizes the loan on the price, the renovation budget and projections under the new flag, and the buyer keeps a cushion for months when rooms are offline.
A first-time investor with a management company. An investor without hotel experience partners with an independent management company. Because of the SBA directory note, the lender reviews the management agreement early.
Common Mistakes to Avoid
- Budgeting for the purchase price but not the improvement plan, signage, technology and transition costs
- Signing a purchase contract before the brand inspects the hotel and confirms the conversion scope
- Leaving franchise, program, technology and management fees out of projections
- Underestimating lost revenue while rooms are being renovated
- Hiring a management company without checking the SBA directory note on affiliation
For more pitfalls, read the hotel loan mistakes that cost owners the most.
Next Steps to Finance Your City Express by Marriott Franchise
Step 1: Confirm the hotel fits the brand. Talk with the franchisor’s development team about your property or target market before committing to a purchase.
Step 2: Get the disclosure document. Review it with a franchise attorney, focusing on fees, Item 7, Item 10, Item 17 and the franchise agreement.
Step 3: Price the improvement plan. Use the brand’s inspection results and real contractor bids.
Step 4: Build a sources and uses budget. Include the price or payoff, renovation, fees, technology, opening costs, working capital and a contingency. Our SBA loan calculator can help with early payment estimates for planning only.
Step 5: Assemble your documents. Gather financial statements, tax returns, résumés, hotel operating statements, the contract or mortgage statement and any management agreement.
Step 6: Apply to the brand and the lender in parallel. Keep both approvals tied to your contract deadlines.
Step 7: Plan the transition. Schedule renovation, training, signage and the reservation system switch to limit disruption.
City Express by Marriott Franchise Loan FAQs
How much does it cost to open a City Express by Marriott?
It depends on the hotel. Most U.S. projects are conversions, so the cost is the purchase price or existing debt plus the improvement plan, fees, opening costs and working capital. Item 7 of the current disclosure document gives the franchisor’s estimate.
What is the City Express by Marriott franchise fee?
It is disclosed in Item 5 of the disclosure document. We could not verify a current figure from a public copy, so request the latest document from the franchisor.
What ongoing fees does the brand charge?
Ongoing fees are listed in Item 6. Hotel brands typically charge fees based on gross rooms revenue plus technology and program charges, and lenders deduct them before measuring cash flow available for debt payments.
How many City Express by Marriott hotels are in the U.S.?
Marriott reported 100 signed agreements in the United States and Canada as of December 2025, with six hotels opened during that year.
How much net worth or liquid capital do I need?
Marriott does not publish a fixed minimum for this brand in the materials we reviewed. Both the brand and your lender will judge whether your equity and reserves fit the project.
Can I use an SBA loan for a City Express by Marriott?
Possibly. The brand is listed on the SBA Franchise Directory under code S8680. Eligibility depends on the borrower, the project, program rules and approval, and the directory note on management agreements applies.
Can a City Express by Marriott franchise loan cover renovations?
Often it can. Many owners include improvement plan costs in the acquisition or refinance loan, funded at closing or released from a reserve as work is completed.
Does Marriott offer financing for City Express owners?
Item 10 of the disclosure document describes any financing the franchisor offers. Owners who do not use it arrange their own loans.
How long is the franchise agreement?
The term, renewal and transfer conditions appear in Item 17 and the franchise agreement. Lenders generally want the franchise term to extend at least as long as the loan.
Final Thoughts
A City Express by Marriott franchise loan is mostly about the property, the renovation and the transition plan. Owners who get the disclosure document early, price the improvement plan with real bids, account for every brand fee and line up brand and lender approvals together give themselves the best chance of a smooth conversion.
US Professional Funding helps owners and buyers finance franchised hotels, including acquisitions, conversions, renovations and refinancing. Learn more about our franchise financing programs and hotel and motel financing.
