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Marriott completes S$17.6b merger with Starwood, becomes largest hotel chain

NEW YORK — Marriott International on Friday (Sept 23) completed its US$13 billion (S$17.6 billion) acquisition of Starwood Hotels & Resorts Worldwide, bringing together its Marriott, Courtyard and Ritz-Carlton brands with Starwood’s Sheraton, Westin, W and St Regis properties.

The Westin New York hotel in New York. Photo: AP

The Westin New York hotel in New York. Photo: AP

NEW YORK — Marriott International on Friday (Sept 23) completed its US$13 billion (S$17.6 billion) acquisition of Starwood Hotels & Resorts Worldwide, bringing together its Marriott, Courtyard and Ritz-Carlton brands with Starwood’s Sheraton, Westin, W and St Regis properties.

In total, 30 hotel brands now come under the Marriott umbrella to create the largest hotel chain in the world, with more than 5,800 properties and 1.1 million rooms in more than 110 countries. That is more than one out of every 15 hotel rooms around the globe.

“We’ve got an ability to offer just that much more choice. A choice in locations, a choice in the kind of hotel, a choice in the amount a customer needs to spend,’’ said Marriott CEO Arne Sorenson.

In Singapore, Marriott had three hotels — Singapore Marriott Tang Plaza Hotel, The Ritz-Carlton Residences, Singapore Cairnhill and The Ritz-Carlton, Millenia Singapore — with a total of 1,059 rooms under its group as of August. 

Under the combined corporate umbrella, Marriott’s stronghold in Singapore has increased by six hotels, comprising The St Regis Singapore, Sheraton Singapore Hotel & Towers, Singapore, W Singapore — Sentosa Cove, The Westin Singapore, Four Points by Sheraton Singapore, Riverview, and Le Meridien Singapore, Sentosa. 

Starwood’s guest loyalty programme — Starwood Preferred Guest — was also a “central, strategic rationale for the transaction,’’ said Mr Sorenson. The programme’s members are deeply loyal to it, have generally higher incomes and tend to spend many nights on the road. 

Starting Friday, members of Starwood and Marriott’s two loyalty programmes will be able to link their accounts. Gold elite members in one programme will get gold status in the other. Platinum elite members will get platinum in the other. Marriott silver members will get Starwood’s lowest category, Preferred Plus. Each Starwood point will be worth three Marriott Rewards points. 

Starwood put itself up for sale in April last year. It had struggled to grow as fast as its rivals, particularly in “limited service hotels”, which are smaller properties that do not have restaurants or banquet halls. 

To get Starwood, Marriott had to outbid China’s Anbang Insurance Group. United States and European anti-trust regulators were quick to approve the sale but the Chinese government hesitated, delaying the sale by months.

Marriott and Starwood — like other hotel chains — own very few individual hotels. Instead, they manage or franchise their brands to hundreds of individual owners, often real estate development companies.

Those individual hotel owners are responsible for setting nightly room rates. It is not uncommon for a developer to own a Marriott, Hilton, Hyatt and Sheraton in the same city.

The purchase gives Marriott more leverage with corporate travel departments who often look for one giant chain to house all their employees. It also gives Marriott more power over Expedia and Priceline, the two giant online travel agencies that sell rooms on behalf of hotel firms for a commission. The hotel industry has spent the past year trying to get travellers to book directly with them instead of travel agencies, to avoid paying those fees.

Then there are the 30 brands. Some have performed better than others, but Mr Sorenson said all of them would probably survive the merger.

For now, Starwood and Marriott will keep separate loyalty programmes. Starwood has a credit card deal with American Express as well as close partnerships with Delta Air Lines and Uber. Marriott has a much larger programme with partnerships with Chase and United Airlines.

“Nothing changes immediately. We have to see how those partnerships evolve,’’ said Mr Sorenson.

Mr Gary Leff, who writes about points and miles at ViewFromTheWing.com, called the exchange rate of Starwood points to Marriott points “just right”. 

“It’s one of the many reasonable and positive steps that Marriott has taken along the way as it acquires Starwood,” he said. 

“But there’s a whole lot still to happen between now and the programmes actually being combined.” AGENCIES

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