Thurs, August 20 at 11am ET / 8am PTSponsored By: American Express Global Business Travel
Mon, August 24 at 11am ET / 8am PTSponsored By: TripActions
Thurs, August 27 at 1:00 PM ET / 10:00 AM PTSponsored by: Egencia
Virtual Event - September 9-10, 2020
Convene: 225 Liberty Street - October 22-23, 2020
Filter in or out as many as 200 cities, as well as hotel and car rental class and meals of the day and watch as the per-diem calculator automatically adjusts per diems to your program. Drill down into cost breakdowns and export the results.
Marriott International will acquire Starwood Hotels &
Resorts in a deal valued at $12.2
billion, creating the largest hotel company in the world.
“This is the most
significant hotel or lodging industry transaction of our lifetime on almost
every measure,” said Bjorn Hanson a clinical professor at the New York
University School of Professional Studies' Tisch Center for Hospitality and
Tourism, “in terms of number of rooms, number of brands, members of loyalty
programs, number of countries in which these companies and their brands are
represented, the dollar value.”
Recent press reports speculated that Hyatt Hotels Corp. or
one of three major Chinese hoteliers would buy
Starwood. The news broke today, however, that Marriott will acquire
Starwood in a series of transactions. Stockholders of Starwood will receive
0.92 shares of common stock and $2 in cash per share. Combined, the companies operate
or franchise more than 5,500 hotels with 1.1 million rooms worldwide.
“On a combined basis this transaction will expand our
presence around the world, broaden our appeal to younger travelers and increase
the growth opportunities for Starwood's valuable brands,” said Marriott CEO
Arne Sorenson. “In addition, combining Starwood's leading lifestyle brands with
Marriott's strong presence across select-service and luxury tiers, as well as
our convention and resort segment, will create a very attractive portfolio that
should be more appealing to guests, meeting planners and owners and
Starwood chairman Bruce Duncan had announced
in April that the company would consider selling as part of an exploration of
“strategic alternatives.” Following that announcement, Marriott CEO Arne
Sorenson expressed a clear lack
of interest in acquiring Starwood. “It is crystal clear that there is
nothing like organic growth in this business,” Sorenson said during Marriott’s
first-quarter conference call. “That's what we want to remain focused on.”
On a call announcing the deal today, though, he said the
deal became more attractive as Marriott considered consolidation and Starwood
improved the relative value of its company. “We've become more impressed by
what we can accomplish by being bigger, whether you look at what some of [the online
travel agencies] have done by consolidating in their space ... whether you look
at the homesharing sites and the way they're trying to get in,” Sorenson said. “Watching
all of that, we became more convinced that, strategically, we could drive
better value and compete better by being bigger.”
What Lies Ahead
While Marriott’s thinking is “quickly evolving,” Sorenson
said, Marriott expects Starwood brands to remain in place. The companies have a
combined 30 brands between them.
“We have demonstrated our ability to rapidly grow the
Marriott hotel system, and we believe we can meaningfully accelerate growth in
many of Starwood's brands, particularly in the upscale segment,” he said.
Marriott faces a challenge in distinguishing between brands
like Marriott's Renaissance and Starwood's Westin and between the core Marriott
brand and Starwood's Sheraton, Hanson said, adding, “but Marriott is as good at
that as any lodging company is.”
Marriott CFO Carl Berquist said the integration philosophy
is straightforward. “We expect to choose the best from each company: systems,
designs, operations and talent. Our similar organization structures should help
to integrate the work more easily.”
Among Starwood's more attractive features are its luxury
brands like St. Regis, for which Sorensen sees strong growth potential, as well
as its loyalty program, Starwood’s Preferred Guest. “You look at their app. ...
You look at the way SPG skews a little bit younger in some respects, and it's
very valued by elite travelers. There is great value in that program,” Sorenson
said. “We will take the best of both these programs and make sure that the bests
are preserved and enhanced.”
Hanson said such a philosophy could offer consumers the best
of both plans while offering more hotels for earning and redeeming points.
Moving forward, Sorensen said the companies have a lot of
work to do to pull the companies together. “That work we're going to try to
undertake as quickly as we can by having both teams work together and move to
pull the platforms together as quickly as we can and drive the synergies as
quickly as we can,” he said. “It would be foolish to underestimate the
amount of work required to get that done.”
Hanson believes the U.S. Federal Trade Commission will
examine the deal, but he doesn’t anticipate any issues because “hotels compete
Wyndham Hotels & Resorts has released a new booking, billing and payment solution that employs unique...
Sleep was the main priority for hotel guest satisfaction in last year's J.D. Power North America Hotel...
Wyndham Hotels & Resorts recently expanded its Count on Us cleanliness initiative, introduced in early...