USA TODAY International Edition
Marriott/ Starwood union is good for loyalty members
Merger is complete; brands and points remain intact for now
Marriott International and Starwood Hotels and Resorts officially merged into one company on Friday, and the new Marriott has already made its first major decision: to give reciprocal benefits to members of each loyalty program.
Almost a year after first announcing the merger agreement, Marriott International has completed its $ 13 billion purchase of Starwood. With the addition of Starwood’s portfolio, the new Marriott now has 30 brands with more than 5,700 hotels. That amounts to 1.1 million rooms in more than 110 countries, making Marriott the largest hotel company in the world.
Members of the Marriott Rewards program and Starwood Preferred Guest ( SPG) were immediately able to link their accounts at Members. marriott. com to begin earning and redeeming points at all those hotels.
“We did want to deliver real benefits to our customers immediately,” Marriott CEO Arne Sorenson, who is leading the combined company, said during an interview with USA TODAY last week. The two programs will remain separate while Marriott works on technology and product enhancements, Sorenson says.
Sorenson said the merger will more than double the company’s presence in such lucrative regions as Asia, the Middle East and Africa.
The alliance is the biggest hotel merger in years, but it is not the only one. InterContinental Hotels group acquired boutique chain Kimpton Hotels and Restaurants last year. AccorHotels purchased the Fairmont, Raffles, and Swissôtel brands this year. Destination Hotels and Commune Hotels have merged.
Many have likened the consolidation of the hotel industry to that of the airlines.
But Gray Shealy, executive director of the Master’s of Hospitality Management Program at Georgetown University, says the Marriott- Starwood merger is likely to be less rocky.
“They’ve had tons and tons of time to prepare for it,” he says. “If anyone is going to do it as smoothly as possible it would be Marriott. Airline operations are so wildly different than hotel operations.”
David Loeb, senior hotel research analyst at Baird, says consumers will have a lot more options within the Marriott family, but perhaps not across the en- tire industry.
“It will be tougher and tougher for smaller companies to compete,” he says. “Consumers do like choice.”
Sorenson says he will retain the existing brands, even if they appeal to similar customers.
As for the loyalty program, Marriott has already made some decisions.
Members of both Marriott Rewards, which include The RitzCarlton frequent guests, and SPG will have their status matched. If they link their accounts, they will be able to transfer and redeem points at a three- to- one ratio. Three Marriott Rewards points will equal one SPG Starpoint. That will apply to redemption stays and the Marriott Rewards Experiences Marketplace and SPG’s Moments platform.
Loyalty program experts praised the initial execution.
“Marriott nailed it with their 3: 1 transfer ratio,” says Gary Leff, a travel industry expert who studies rewards programs.
He says Starwood is also known for its better treatment of top guests, offering perks such as suite upgrades and fewer limits on complimentary breakfast.
Loeb says he expects Marriott to “go out of its way to be very good to Starwood’s elite guests.”
“They will do all they can to engender loyalty across the family of brands,” he says. “I think that’s a very important strategic goal to them.”
Brian Kelly, founder of ThePointsGuy. com, says that as an elite member of both programs, he’s pleased so far with how Marriott is handling the merger of the programs.
“My biggest fear was that they were going to take benefits away or do a one- size- fits- all approach of Marriott is it,” he says. “They haven’t, at least not yet. ... This merger is so big they don’t have to follow in the lead of airline merger. And in the hotel space, there’s never been a hotel merger of this magnitude with these loyalty programs.”