Marriott, Starwood merge to create hospitality giant

Marriott International formally completed its acquisition of Starwood Hotels & Resorts on Friday 23 September, to create the world’s largest hotel company.

Following the US$13.6 billion cash and stock deal, the merged company will now have a combined collection of more than 5,700 properties and 1.1 million rooms, covering 30 brands in more than 110 countries. The deal has also doubled Marriott’s combined portfolio in Asia, the Middle East and Africa.

“Throughout our nearly 90-year history we have never stopped searching for innovative ways to serve our guests,” said JW Marriott Jr, executive chairman of Marriott International. “With the addition of Starwood’s strong brands, great properties, and talented people, we have dramatically expanded our ability to provide the best experiences to our customers.

“Throughout our nearly 90-year history we have never stopped searching for innovative ways to serve our guests”

“We also welcome the tremendous responsibility as the world’s largest hotel company to be a good global steward, providing new opportunities for our associates and building the economic strength of the communities we call home,” he added.

The group’s brands now cover numerous price points and market segments, from midscale options like Courtyard and Four Points to lifestyle labels like AC Hotels, Moxy and Aloft. It now commands three of the biggest upscale brands in the industry, in Marriott Hotels, Sheraton and Westin, and has a strong portfolio in the luxury sector, with Marriott’s JW Marriott, Ritz-Carlton and Bulgari brands complemented by Starwood’s W Hotels, Edition and St Regis. There are also three semi-independent “collections”, namely Tribute Portfolio, Luxury Collection and Autograph Collection.

In terms of loyalty, the Marriott Rewards and Starwood Preferred Guest (SPG) schemes will be connected, allowing members to transfer points between the two programmes at a ratio of three-to-one (three Marriott Rewards points to one SPG point).

“Now that we are one company, we are seizing the opportunity to reinforce our loyalty to them”

“Marriott’s and Starwood’s guests have shown tremendous loyalty to our brands and now that we are one company, we are seizing the opportunity to reinforce our loyalty to them,” said Stephanie Linnartz, Marriott’s global chief commercial officer. “Beginning now, we’re drawing upon the best of our loyalty programmes by enabling members to join or link their accounts and immediately receive reciprocal status and benefits.”

Aside from the US$13.6bn spent on acquiring Starwood – US$3.6bn of which is in cash – Marriott is expecting to incur one-off transaction costs of US$140 million. It also expects, however, to achieve US$250 million in “annual cost synergies”, along with increased sales.

Arne Sorenson remains as president and CEO of Marriott International, and the company’s headquarters continue to be located in the US state of Maryland.