During the 2016 corporate hotel request for proposal season,
Marriott International declined to bid 18 percent of the time, twice as often
as Hilton Worldwide and more than three times as often as Starwood Hotels &
Resorts. That's one metric Carlson Wagonlit Travel's hotel solutions group used
in a recent
white paper to illustrate what the corporate negotiation landscape could
look like following the Marriott-Starwood
merger.
The group used CWT aggregate client data to dig into other metrics,
such as the likely impact of the megamerger on room-night market share. It
found that in 14 of the 20 cities worldwide in which CWT clients spend the most,
the combined portfolios of Marriott and Starwood would represent 30 percent or
more of corporate room nights. In Minneapolis, the market with the highest
combination of Marriott and Starwood market share, it represents 50 percent.
"Consolidation in the hotel industry isn't new, but the
Marriott/Starwood tie-up is likely to change the way corporate travel is bought
and sold," CWT executive vice president and head of global supplier management
Scott Brennan said in a media statement. "Everyone has to think very
carefully about what this means for negotiating corporate travel deals."
It's no secret that Marriott International has been reducing
its negotiated corporate business in recent years, but the fact that the
company declined to bid far more often than other hotel chains demonstrates
just how far it's taken the initiative. As Marriott represents more hotels in
more markets, the
question stands whether it'll continue in the same fashion.
CWT's analysis also found that Marriott captured the largest
portion, 22 percent, of noncompliant corporate spend last year. Starwood,
meanwhile, captured 9 percent. CWT suggests Marriott's loyalty
program is the culprit behind its larger share of noncompliant travelers. "The
combination of the new Marriott's increased market share and the pulling power
of its loyalty program means it will be in a very strong position,"
Brennan stated. "After all, volume drives the discussion in the hotel
industry. On top of that, where a player the size of the new Marriott goes,
others will follow."
The report wasn't all doom and gloom, however. CWT
posits that the Marriott/Starwood merger could help streamline the hotel RFP
process and lead to more aggressive pricing from chains looking to maintain
relationships with corporate partners. Even though the effects of the merger
likely won't be realized until the 2018 RFP season, CWT advises travel buyers
to start preparing for the changing hotel climate now, during the 2017 season.