Marriott moves for rival to create million-room group

MARRIOTT has checked in to rival Starwood with an agreed £7bn bid which will create a hotel giant offering more than a million rooms.

Hotel chains have been merging to save cash, as travellers increasingly turn to apps like Airbnb, which connect them with homeowners renting out rooms.

The newly-enlarged American group, which will throw together Ritz-Carlton and Sheraton with the boutique ‘W’ chain, will knock Britain’s InterContinental Hotels off the top slot as the world’s biggest hotelier.

Shares in the owner of Holiday Inn and Crowne Plaza fell 48p to 2461p over disappointment that to date it has not participated in industry consolidation.

Last week the chain was forced to put out a statement pouring cold water on incorrect reports it was about to clinch a transformational deal. It said: ‘Following recent market speculation, the board of directors of IHG states that it is not considering a potential sale or merger of the company.’

Starwood essentially put itself up for sale in April, when it said it was considering strategic alternatives.

The cash and stock deal will create a hospitality monster comprising 5,500 hotels with 1.1m rooms.

Marriott will also have a greater presence in markets such as Europe, Latin America and Asia.

About three quarters of Marriott’s rooms are in America. But Starwood has around half of its rooms outside the US which accounted for almost two thirds of its revenue in 2014.

The deal will surprise many who had expected the Chinese to swoop in what would have been the largest ever Chinese acquisition in America. At least three Chinese companies, including its sovereign wealth fund, were interested in Starwood.

Marriott chief executive Arne Sorenson (pictured) will lead the newly-enlarged firm. He said: ‘The driving force behind this transaction is growth.’

Marriott said it expected the deal to trigger a £65.75m one-off charge but then deliver annual savings of £131m from pooling booking systems, and savings from buying raw materials for the bigger group.