There had earlier been speculation about a Starwood-IHG (or Wyndham) merger. Wyndham hired away enough Starwood talent that it’s recently been referred to as Wynwood.
Starwood’s CEO, whom I interviewed on stage earlier this year, made clear he expected to sell by the end of the year. And it looks like he made good on that promise, because Marriott just announced that it would acquire Starwood for $12.2 billion in cash and stock (a figure that strikes me as odd, because it’s a slight discount to recent trading prices which may be inflated by the expectations of an acquisition).
SkyCity Marriott, Hong Kong Airport
Marriott investors and Starwood customers should see this very differently:
- Business-wise this makes more sense than a Hyatt deal, Marriott has reach and strength in both full and select service but lacks presence in the luxury market where Starwood is strong.
- For consumers this means less competition in the hotel loyalty space, and one of the very best hotel loyalty programs getting swallowed up.
Marriott Seattle Airport Atrium
Marriott Rewards members most frequently say that they value the program because wherever they go they can earn their points and because of the consistency. However no Starwood Platinum ever said to themselves they’d rather be a Marriott Platinum. Marriott neither promises suite upgrades (out of Asia Pacific) nor late checkout (which is “based on availability”) and elite breakfast is not offered at Marriott Courtyard properties or even at resorts.
This is an opportunity for Marriott to really up its game and learn from Starwood Preferred Guest. However the more generous programs tend to be the smaller ones for a reason. It does not take any effort to be loyal to Marriott or IHG. If you walk down the street in any city you can wind up in one of their hotels. It takes effort to be loyal to Starwood or to Hyatt, and so they must give you a reason to do so.
Nonetheless, while Marriott is strong in consistency and size they could certainly learn something about treating their members as individuals and creating special experiences from the folks at Starwood. Let’s hope that happens.