Walmart to invest in AC Marriott hotel on home campus

by Kim Souza ([email protected]) 4,496 views 

The AC Hotel by Marriott will be located at the corners of SE 8th and J Streets on the Walmart home office campus. (photo from Walmart)

Walmart and Marriott International signed a franchise agreement for the retail giant to build and own an AC Hotel on its home campus in Bentonville. The AC Hotel by Marriott will be operated by a third party, not yet determined, according to Walmart spokeswoman Jacquelyn Cook.

Cindi Marsiglio, senior vice president of real estate at Walmart, made the announcement in a blog post Tuesday (May 31). The hotel has been part of the campus design since the beginning but the decision to partner with Marriott is a more recent event.

Marsiglio said the five-story hotel will be 90,000 square feet. Plans for the new hotel also include 153 guest rooms, 6,000 square feet of flexible meeting and event space on the main lobby floor, and a rooftop lounge with indoor and outdoor seating. The hotel is slated to open in the summer of 2024.

“We are excited to announce we have signed a franchise agreement with Marriott. … AC Hotels’ approach to intentionally refine and craft enhanced guest experiences with a balance of form and function naturally aligns to the guiding principles we have used to design of campus — create a winning work environment, be true to who we are and offer an enhanced experience for associates and the surrounding community,” Marsiglio stated.

Walmart recently obtained rezoning approval for the hotel and welcome center located near the intersections of Southeast 8th Street and J Street. Marsiglio said the hotel will be situated so guests have convenient access to office buildings, campus amenities, retail environment and a network of walking and bike trails.

While the hotel will predominantly be used by Walmart to house visiting employees and vendors, Cook said the hotel will also be open to the community.

Walmart declined to give the cost for the build, and no permits have been filed with the city with estimated costs. Bentonville city officials said the permits for rezoning were approved on May 24,  but the construction permits have yet to be filed as Walmart and Marriott are working on final specs for the design.

Franchise Direct reports that Marriott Hotel costs range between $189,800 and $301,600 per guest room, putting the cost range between $29 million and $46.14 million. The range does not include land costs or permit and utility connection fees. Marriott charges a franchise fee up to $90,000 for the AC Hotel brand with an initial investment ranging between $12.96 million and $39.81 million. It also gets a 5.5% royalty fee and 3.85% service fee of gross room sales. Marriott also charges a $10,000 annual fee for marketing and promotion and $220 per room.

Marsiglio said while many employees live and work in the Bentonville area, others work across the country and around the world. And the home office is their home, too.

“To better serve our associates in the field and other office locations, we knew it was essential to include a hotel on our new campus. From recruiting visits and company gatherings to visiting associates coming to share and learn, having a hotel within campus will enhance each visit,” she said.

Marriott has almost 200 of the AC Hotels globally. The closest AC Hotels to Bentonville are in downtown Little Rock and in Kansas City, Mo.

Scott Benedict, executive at WhyteSpyder/Ascential and former Walmart employee, said it will save the company money and time to have a hotel on the corporate campus. Benedict, a former director of retail studies at Texas A&M University, said A&M has a hotel on its campus which is constantly booked for visitors and recruits. He expects the AC Hotel will be the same for Walmart.

Walmart is not the only group building a new hotel in the city. Real estate development group Blue Crane is leading the project for a 142-room full-service hotel in downtown Bentonville. While the projects are not connected, Tom and Steuart Walton, grandsons of Walmart founders Sam and Helen Walton, are spearheading the downtown hotel project.  Steuart Walton is also on Walmart’s board of directors.

Benedict does not see one hotel cannibalizing the other as Walmart will have somewhat of a captive audience with its own employees and visitors.

Visit Bentonville CEO Kalene Griffith said the planned hotels open the door of opportunity for Bentonville to attract a wide range of visitors for unique experiences that highlight the city as a great place to visit. Visit Bentonville said the city has 24 hotels that combine for 2,209 rooms.