Today Marriott International officially announced the purchase and acquisition of Starwood Hotels, creating a combined portfolio of one million, one hundred thousand hotel rooms worldwide. Think about that for a second: the entire population of San Francisco could grab their own room in the newly combined portfolio with more than 200,000 rooms still left over. I suppose we could fit another entire major city in as well while we’re at it. This acquisition carries significant implications for loyalty members, the properties and guests, and of course, we discuss them all….
The Loyalty Programs: What You Need To Know
People love Starwood’s loyalty program “SPG”. It’s far and away the most lucrative and consumer friendly hotel rewards currency, offering members the ability to earn points for stays, flights, uber rides and via a Starwood American Express card. Not only can you use your points towards hotel stays, you can also convert them into airline miles at an industry leading exchange rate.
With the takeover much remains unclear going forward for both programs. Will Starwood merge into the far less leverageable Marriott Rewards program? Marriott’s 54 million member program dwarfs Starwoods 21 million in size, leading to expectation that it would likely engulf the Starwood Preferred Guest program.
However, For the optimists out there, in a call to market analysts today, Arne Sorenson, the CEO of the Marriott (and soon to be combined) chain mentioned the value of the Starwood program and it’s unique positioning with younger demographics, it’s key strategic partnerships with brands like Uber and American Express and its substantial value going forward. Ending an extremely successful program would be a dangerous move. Let’s keep our hopes up for a situation similar to IHG and Kimpton who are under the same umbrella yet keep their loyalty programs separate.
The Properties + Hotels And Future…
In the merger, which will complete in mid-late 2016, the new numbers will nearly knock you off your chair. 1.1 Million rooms in more than 100 countries spanning 5,500 hotels. Between the two mega chains there are now more than 30 brands to choose from ranging from local roadside motels to five star properties coveted around the world including St. Regis, Ritz Carlton, Design Hotels, W Hotels, Marriott, Autograph, Meridien, Edition and Westin. The move is said to be most inspired by Starwood Hotels reach into millennials and younger brands, which their hotels such as W properties seem to capture far greater than Marriott.
My Thoughts + Bottom Line
This is a brilliant move from Marriott. I do my best to avoid major chains out of desire to experience cultures in a less “conference lobby” way, yet with Starwood’s addition of collections such as Design Hotels, Marriott will now capture just about every style of traveler. I am extremely hopeful, as is anyone with a brain that Starwood’s Preferred Guest program will not vanish into the night, but rather remain a viable part of this profitable future. Speaking of profit, the deal is reported to be roughly 12.2 BILLION dollars in cash, stock and other considerations. For now, keep earning your points as you would, it will be at least a year until any talks of loyalty change take place.
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