Marriott-Starwood merger set to create a new force in Asia

Marriott International and Starwood Hotels and Resorts are to merge to create a combined company will operate or franchise more than 5,500 hotels with 1.1 million rooms worldwide.

The announcement by Marriott on Monday brings to an end months of speculation about the future of Starwood, with several major hotel groups said to be interested in a takeover.

The US$12.2 billion deal will see Starwood's portfolio of brands join Marriott's own brand portfolio.

Marriott said it “expects to accelerate the growth of Starwood’s brands”.

The Marriott Rewards loyalty programme has 54 million members, and Starwood Preferred Guest has 21 million members.

Starwood also operates a loyalty programme for meeting planners, while Marriott runs Meetings Imagined, a resource for organisers seeking creative ideas. Both groups have developed meeting planner apps that are seen as pioneering products. 

“They should be even stronger when the companies merge,” according to a Marriott statement.

Like other international hotel chains, Starwood has an aggressive expansion plan in China, and the merger is likely to see the new entity become a dominant force among international hospitality players across Asia.

It is likely that all the hotel brands will be retained, but at some point in the future Starwood Preferred Guest will merge into Marriott Rewards – probably to be called Starwood Rewards.

Arne Sorenson, president and CEO of Marriott International, said: “The driving force behind this transaction is growth. This is an opportunity to create value by combining the distribution and strengths of Marriott and Starwood, enhancing our competitiveness in a quickly evolving marketplace.

“This greater scale should offer a wider choice of brands to consumers, improve economics to owners and franchisees, increase unit growth and enhance long-term value to shareholders. Today is the start of an incredible journey for our two companies.”

Adam Aron, Starwood Hotels & Resorts Worldwide CEO on an interim basis, added: “We are excited to play a vital role in the creation of the biggest and best hotel company in the world with tremendous upside potential.

“The combination of our two companies brings together the best in innovation, culture and execution.

“Our guests and customers will benefit from so many more options across 30 hotel brands, while our hotel owners and franchisees will derive value from our combined global platform and efficiencies.”

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