CEO TALKS ABOUT MARRIOTT’S FUTURE
World’s largest hotel company looks at how to integrate Starwood
Now the integration begins.
Marriott International is now the largest hotel company in the world after completing its near $ 14- billion acquisition of Starwood hotels and Resorts Friday, combining two very different brands. The merger brings together Marriott brands such as Ritz Carlton, Courtyard and Residence Inn with Starwood brands including WHotels, Westin and Sheraton. Members of both loyalty programs now have access to 5,700 hotels and 1.1million rooms in more than 110 countries.
I caught up with Marriott President/ CEO, Arne Sorenson, to find out what other changes travelers will see. Our interview follows, edited for clarity and length. Q CONGRATULATIONS ON COMPLETING THE DEAL. WHAT DOES THIS MEAN FOR THE COMPANY? A: It’s hugely transformative for us. It will make Marriott about 50% bigger overnight both in terms of number of hotels rooms and number of brands. We’re adding 30 countries to the portfolio as well. It sets us up to double down on our investment in loyalty particularly, and the technology relating to loyalty to make sure we’ve got as vibrant and large an ecosystem of loyal customers as possible. Q CUSTOMERS WANT TO KNOWTHAT THEIR REWARDS PROGRAMS WILL STAY IN PLACE. A: We think that SPG and Marriott Rewards are the two strongest loyalty programs in the hotel space. Customers will be able to go to a dedicated site and link their accounts if they already have accounts in both programs. Most importantly, they have the ability to redeem points from either program in any hotel in the system. So we’re delivering strong functionality between the two programs. From the moment we announced the deal there was chatter saying “OK, what’s gonna happen to our program? Is Marriott going to make it worse for us at SPG?” So we are very eager to win those customers over and we’re going to be very cautious about making changes. Q THE COMPANY IS NOW THE LARGEST HOTEL COMPANY IN THEWORLD. WHAT DOES THIS MEAN FOR PRICING OF HOTEL ROOMS? A: Even though we will be the biggest hotel company in the world, we only have about a 15% share in the USA, which is where our share is the biggest. So that gives you a sense that there is still plenty of competition around rates. Having said that, we should be able to drive top- line performance of the hotel through occupancy. Because we should be able to command that much more share of wallet from our loyal guests because the loyalty program is going to have more places to earn points and redeem points. We know that SPG members have stayed in competitors’ hotels in many markets where Starwood Hotels did not exist. So by having those hotels we think we’ll be able to drive incremental share. Q YOU WILL COMBINE TWO DIFFERENT CULTURES. WHAT ARE YOUR PLANS FOR GROWTH? A: We’re gonna keep growing everywhere. Our organic growth over the last couple of years has been about 100,000 new rooms each year. Obviously the pace will depend on economic conditions around the world. 2016 has been fairly anemic from an economic