What the Marriott Aquisition of Starwood Means for Travelers
Two major hotel chains, Marriott International and Starwood Hotels, are about to become one massive company. We're predicting some major changes—and even improvements—when all is said and done.
It's official: Marriott International has bought Starwood Hotels for $12.2 billion to form the world's largest hotel company. For weeks, speculation had been brewing about who would buy Starwood—with most fingers pointing toward Hyatt. But Marriott, with its broad portfolio of brands (including Ritz-Carlton, Autograph Collection, and the Edition hotels) has turned up the lucky suitor.
Starwood will reportedly have to spin off its timeshare business before the acquisition can take place. But the rest of the company will transfer into Marriott's hands by mid-2016: if all goes according to plan. Here's what it all might mean for travelers.
Not all of Starwood's Brands Will Make It
Currently, Starwood has nine brands in its portfolio, including Westin, St. Regis, Aloft, and W (a tenth is rumored to be launching sometime in the coming months). Once the merger takes place, there will be redundancies, since Marriott has 19 brands under its own umbrella. Can Starwood's new Tribute Hotels, Luxury Collection, and Autograph Collection all exist as separate brands under Marriott’s ownership? Almost certainly not. Will Sheraton, Marriott’s longtime competitor, finally get its last hurrah? That’s entirely possible. It’s almost a guarantee that some consolidation will happen along the way.
The Beloved SPG Loyalty Program Will Get Devalued—for Some People
Currently, Starwood points are worth roughly $22.68 per 1,000 points, according to data from travel insights company Wanderbat—one of the highest redemption rates around. Couple that with a massive hotel portfolio, and the ability to transfer points to more than two dozen airlines, and it's clear why SPG was a top contender in the loyalty game.
Marriott’s point valuation pales by comparison, at $8.92 per 1,000 points, according to Wanderbat. Still, the high concentration of affordable brands in the Marriott portfolio means that members need only spend an average of roughly $2,000 to get a free night, compared to nearly $7,000 for Starwood. The bottom line? Your Starwood points will almost surely decrease in value, but these are two of the most popular loyalty programs around—and neither has blackout dates on bookings for standard rooms. In all likelihood, there will be more tiers for redemption down the line, given the stratification of brands in the merged portfolio, and members will have to keep an eye on whether all premium properties will participate in the program. Changes probably won't come for at least another year, so cash in while you can.
Independent Hotels Will Suffer
Think about all the indie-feeling properties now included in the Marriott portfolio: everything from Luxury Collection to Autograph Collection and Design Hotels, which had been recently acquired by Starwood, will now be represented under a single, powerful loyalty program. True independents will need to band together to fight off a giant of these proportions.
Marriott Will Become a Much Cooler, Progressive Brand—If They’re Smart
Starwood is a champion of innovation in the hotel industry. They've introduced all sorts of mobile features from concierge services to room keys, as well as ground-breaking hotel products like robotic butlers and in-room streaming services. And yet, Marriott has been able to take some of those ideas and implement them on a brand-wide scale quicker than Starwood could. Together, they can push the envelope further and faster—assuming red tape doesn’t get in their way.