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Procurement

CWT: Prepare for a Tough 2018 RFP Season with Marriott/Starwood

By Julie Sickel / June 29, 2016 / Contact Reporter
Business Travel News on X

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.


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."

Carlson Wagonlit Travel's Scott Brennan

"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.

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