Marriott International finally closed its deal to acquire
Starwood Hotels & Resorts on Friday. With that news, Marriott is able to
shift the conversation away from words like "Anbang" and "China" and shape it
around words like "more."
"We can now offer more opportunities, more brands and
more choices," executive chairman and chairman of the board Bill Marriott said
during a media call on Friday.
The Marriott-Starwood megamerger creates the largest hotel
company in the world. The combined company now offers 30 brands, 5,700
properties and 1.1 million rooms across 110 countries. With that expansion, the
company's distribution reaches farther, doubling its footprint in Asia, the Middle
East and Africa.
"Our portfolio gives our customers so many more options
to choose from," CEO Arne Sorenson said. "We have the right brands in
the right place for every guest wherever they may need." Beyond having
more brands in more places for more customers, the company estimates it can
realize $250 million in annual corporate cost synergies, enhancing revenue
opportunities for its managed and franchised properties.
Marriott has added three Starwood directors to its board, including
chairman Bruce Duncan, who in April 2015 made the first public
announcement that Starwood was exploring "strategic alternatives"
and that "no option is off the table."
The Starwood Sales
Team
Earlier this week, Starwood senior vice president of global
sales Alison Taylor departed the company to lead
global sales at American Airlines. No other notable departures have been
announced, though it's assumed that higher-up executives, like Starwood CEO
Thomas Mangas, will move on.
Speaking to BTN Friday
morning, Marriott executive vice president and global chief commercial officer
Stephanie Linnartz said: "As of 12 a.m., the Starwood members and Marriott—we
became one team, which we’re really excited about." Linnartz didn't
provide any specifics beyond that.
Sorenson, though, expanded on the personnel topic during
Friday's media call. With Starwood's headquarters located in Stamford, Conn.,
and its Starlab office in Manhattan, Sorenson anticipates Marriott will, for
now or "maybe forever," have people located in both the New York
City-Connecticut area and in Marriott's Bethesda, Md., headquarters. "I
would expect that the number of Starwood associates who will join us will be
probably co-located in places," he said, "continuing to live and work
where they live and work today, at least preliminarily."
The company is scouting for a new headquarters in the
Washington, D.C. area.
The Loyalty Programs
Marriott also announced on Friday that it is inviting anyone
who is a loyalty member of both Starwood Preferred Guest and Marriott Rewards,
which includes The Ritz-Carlton Rewards, to link those accounts.
Sorenson reiterated on Friday that Starwood's loyalty
program was a "huge piece" of why Marriott wanted to acquire the
company in the first place. The two programs boast 85 million loyalty members
between them.
Program members who choose to link their accounts will
receive instant status matches—Gold for SPG equals Gold Elite in Marriott
Rewards. The link also allows members to transfer points between the rewards
programs; three Marriott Rewards points are worth one SPG Starpoint. Sorenson previously
said the company expects to combine both programs in 2018, implementing the
best features of both.
The 30 Brands
Marriott plans to keep in place its 30 brands, including the
11 it inherited from Starwood, Sorenson said. Brand teams from Marriott and
Starwood will "drive distinctions" that customers will come to
appreciate, he said.
Sorenson said Marriott simply doesn't have the power to
force brands out of the portfolio. "The hotels are owned by third-party
real estate investors; our contracts don’t give us the right to change the
brands that are associated with their hotels," he said. "They have
made deliberate bets with their valuable real estate about which brands they
would like to have on their hotels, and so that's something we intend to
continue to respect."
In the lead-up to the merger close, Starwood had
been on a record-setting pace for hotel signings. This week, the company said
its Specialty Select Brands—Aloft Hotels, Four Points by Sheraton and Element
by Westin—have signed 132 hotels this year, up 89 percent from the same time
last year. Its second-youngest brand, Tribute Portfolio, a soft brand of
high-end independent hotels launched in 2015, announced seven signings this
week, bringing its portfolio to 30 hotels.
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Marriott-Starwood Merger's Ripple Effect
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RFP Season: Time for a Power Grab?
What
All This Hotel Consolidation Means