Marriott and Starwood, two terrific hotel chains, will merge. It will leave the company with 30 brands operating more than 5,500 hotels with 1.1 million rooms worldwide. Starwood operates some lovely hotels and resorts under brands such as St. Regis, Westin and Sheraton, while Marriott operates hotels that carry the Marriott name as well as some great family-friendly brands, including the all-suites Residence Inns. We break down the merger and look at whether it will benefit travelers.
Is Bigger Better?
As expected, Marriott International is touting the benefits of this mega-merger, which will form the world’s largest hotel chain.
The company says it will mean:
More opportunity for employees. This, of course, is good for travelers, too. Happier workers means happier guests. And the additional career opportunity could mean that workers will stay longer, giving travelers the benefit of having more experienced staff to take care of them. Advantage: Travelers.
Combined loyalty programs. Marriott Rewards has 54 million members (including me), and Starwood Preferred Guest has 21 million members. The merger means more chances to accrue points because it expands the numbers of properties where a traveler can stay. However, it remains to be seen how the points redemption rules might change under the combined program. There will be merging pains, but once the dust settles, this is likely to be Advantage: Travelers.
Financial benefits to the company. As anyone who has ever lived through the sale or merger of a employer knows, this can be a bumpy process for employees and customers. Marriott says in a press release that it expects to deliver “at least $200 million in annual cost savings” in the second full year after closing this deal. That means someone will lose a job. Because of that, just about every Starwood and Marriott worker will spend the next two years wondering if he or she will be that person. That kind of uncertainty is rarely good for customer service. Advantage: Marriott.
Consolidation. Part of the savings will come from selling hotel properties as part of the merger. If the hotel that goes on the auction block is one of your favorites, it could be good or bad, depending on which company buys it and what happens to the hotel after the sale. Advantage: Undetermined.