The Marriott Starwood Merger: Growth of Choices, Value, Opportunities

Marriott International announced an agreement to acquire Starwood Hotels & Resorts to become the largest hotel company in the world.

This will bring together an unmatched portfolio of unique brands and a worldwide team of diverse and dedicated hospitality professionals.

The reasons we took this leap, the largest in our company’s 88 years, are two-fold. First, we are confident we can create value for the shareholders of both companies. Second, we are convinced the greater size will help us stay competitive in a quickly-evolving marketplace.

The hospitality industry today is filled with new and emerging options. Long gone are the days when a Marriott hotel competed against the Hilton hotel across the street. Product quality, great service and brands are still important aspects of our competitive landscape.  In recent years, however, we have seen this landscape become more and more complex. With greater sophistication and greater access to information, travelers now have unlimited options, from luxury to economy hotels, from traditional to lifestyle, from well-defined to totally unpredictable.

Even as the hotel industry itself has become more varied, the methods for planning and booking travel have also become varied — think not just TripAdvisor and Expedia, but Google and Alibaba, all provide services and seek to make a profit in our industry. Then, add home-sharing platforms like VRBO, Home Away and AirBnB. While each are very different from another, they look a bit like a combination of an intermediary and a traditional competitor.

So what do we do? First, we want to expand our offerings to ensure we have the right product in the right place to serve our loyal guests and capture new ones. Second, we want to be big enough to be able to cost-effectively invest in marketing and technology to stay front and center for our guests. Third, we want to have the best loyalty programs in the business. This merger does all that.

We have never been a company that made widgets. We are a company that offers experience in its myriad forms. We are a company with a deeply embedded core value to Embrace Change. We’ve been growing and adapting to changing environments from literally the first day J. Willard and Alice Marriott opened their root beer stand in 1927.

Particularly in the past 25 years, our Embrace Change strategy has been fueled by growth and innovation. By growth, I mean growth of choice, growth of geographic reach, growth of shareholder value and growth of investment in our people and our customers. You’ve seen us add rooms, associates and brands across the globe – Protea in Africa, Delta in North America and Moxy in Europe, for instance.

Merging with Starwood will be a continuation of that growth. It is home to respected brands like St. Regis and Westin that will align naturally to our distinctive brands.

Our companies are also well-matched on the innovation front. We pride ourselves on many firsts as our company has evolved, including most recently significant leaps in the digital and design space. Meanwhile, Starwood is well-respected for its forward thinking. It was the company, after all, that helped define one of the industry’s most significant revolutions in recent history: the lifestyle brand. The innovative spirit that brought W to the world will be welcomed and fostered in this new union.

Going forward, as travelers become evermore sophisticated in their expectations and the marketplace continues to evolve, the way companies like ours will attract customers will be to offer more choices and an even more powerful portfolio.

At the same time, when our two companies work as one, we will invest more in the faces and places that make up the new frontiers of hospitality. We will do great things together.


The Marriott Starwood Merger: Growth of Choices, Value, Opportunities


Source: Arne Sorenson (LinkedIn)

in In The News

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