Marriott International has agreed to buy Starwood Hotels and Resorts in a $12.2 billion deal that will make it the largest hotel chain in the world. The combined companies will operate or franchise more than 5,500 hotels with 1.1 million rooms worldwide. About 35% of the properties are outside the USA.
The companies expect the deal to close in mid-2016, following shareholder and regulatory approvals. So the question that will interest us most, is what happens with their rewards programs and status. The Marriott Rewards program has 54 million members while Starwood Preferred Guest has 21 million. SPG points are extremely valuable, so a merger of the programs might change things.
The Stamford-Conn.-based Starwood had suffered in recent years because unlike its competitors, it had not grown its brands in North America. Much of its focus had been in expanding its presence overseas. That will serve Marriott well in its own plans to increase its international footprint.
Starwood has 11 brands, including W Hotels, St. Regis, Westin, and Aloft. The company had been making itself more attractive to a buyer buy creating two new brands this year. The Tribute Portfolio is a collection of four-and five-star independent hotels. Last week, the company expanded a partnership with Design Hotels to bring the Germany-based company into the Starwood portfolio, making it a brand.
Its strength lies in the popularity of its lifestyle brands, which tend to appeal to younger travelers–a consumer group Marriott has aggressively been targeting with the introduction of such brands as AC hotels. Marriott has long been stronger in the luxury and select-service tiers and the convention and resort business.
We’ll have to wait and see what exactly happens, but the good news is that we have at least 6 month to decide on how to spend out points.