In a move sure to please many travelers who appreciate cheap traveloptions, such as discounthotel rooms, and cheap vacation packages,Marriott International has announced that it will purchase rival hotel chain Starwoodfor over $12.2 billion, making Marriott the worlds largest hotelier.
Members of Marriotts reward program are sure to benefitfrom the available number of properties for its members to visit growing by 50percent. Starwoods properties areviewed as more unique, design focused hotels which appeal to younger travelers.
After the purchase is completed Marriott will have 5,500properties with over 1.1 million rooms, uniting Starwoods brands, whichinclude Sheraton, W, Westin, and St. Regis, with Marriotts two dozen brandsincluding Marriotts Courtyard, Ritz-Carlton, and Fairfield Inn. The deal is expected to close by mid-2016.
Marriotts biggest competitor is Hilton Worldwide which has4,500 properties and about 735,000 rooms.
In explaining why Starwood agreed to be purchased its CEOpointed to the need for hotel chains to have a wide distribution of brands andhotels across price points. Appealing totravelers where they go, leverages marketing and technology spending andstrengthens frequent traveler loyalty. Size matters, according to Starwood.
Both Marriott and Starwood, as is the case with other hotelchains, own very few individual properties. Instead they manage or franchise their brands to hundreds of individualowners. Those owners in turn areresponsible for determining nightly room rates.
After the acquisition Marriott will have 30 brands andsignificantly more leverage with corporate travel departments which often areseeking a single hotel chain to house all of their employees. Frequent hotel guests will clearly benefitfrom the merger.
Starwood has a very popular frequent guest program withpartnerships with American Express, Delta Air Lines, and Uber. Marriotts much bigger reward programincludes partnerships with Chase and United Airlines.
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