As you may have heard Marriott and Starwood have merged, and there is no longer a need for separate loyalty numbers. You can combine your accounts to have one single account log-in. If you have already linked your accounts, you will still need to combine your accounts.
Back in 2015, TravelPulse’s Pat Clarke reported that Marriott Hotels, along with Hilton International, were toughening their cancellation policies.
At the time, the two global hoteliers were making the revolutionary move to dial back travelers’ ability to make same-day cancellations with no penalty. Starting Jan. 1, 2016, customers who couldn’t give at least 24-hours notice for a room cancellation would be charged the equivalent of one night’s room rate.
REPORT FROM THE U.S.—Operators of Starwood Hotels & Resorts Worldwide-branded properties that opened just after the company’s acquisition by Marriott International have so far found the transition rather smooth.
Marriott International has launched the first joint loyalty promotion covering its Marriott Rewards, Ritz-Carlton Rewards and Starwood SPG schemes.
It’s been more than a year since Marriott International entered talks to buy Starwood Hotels & Resorts, and the speculation—about which brands will survive, what the loyalty program will look like, timing, and more—has been constant.
BETHESDA, Maryland—Marriott International officials were upbeat during their third-quarter earnings call with analysts, their first as the official owners of Starwood Hotels & Resorts Worldwide.
Only a month has passed since the deal closed 23 September, and a watchful industry has waited for any details that Marriott and its president and CEO, Arne Sorenson, would share. News has come out little by little, including the latest that Marriott will lay off 163 employees at Starwood’s headquarters by the end of the year.
During the call and in the news release, executives made no direct mention to the layoffs. Similarly, when it came to the question-and-answer session after the prepared remarks, analysts did not ask about them.
Marriott’s stock value has increased 6.8% year to date as of press time. The Baird/STR Hotel Stock Index was up 3.6% for the same time period.
Marriott’s near-term priorities following the acquisition are to reach out to associates to knit together the culture of the company, Sorenson said, as well as seize the topline synergies, property efficiencies and $250 million in G&A savings.
Following the closing of the deal, he said, Marriott linked Marriott Rewards, Ritz-Carlton Rewards and Starwood Preferred Guest with plans to match member status.
“We immediately enabled our loyal travelers to earn points in one program and redeem in the other,” he said. “In fact, over 3.3 billion points were transferred between the programs in the first month alone, while the first transfer and redemption reservation occurred just 15 minutes after we closed the transaction.”
Getting the loyalty programs right was a top priority for Marriott, he said. Only 16% of the combined 85 million members were members of both programs before the acquisition, he said, which puts the company in a position to capture incremental business.
There have been more than 1,000 lead referrals for group business through the end of October between the Starwood and Marriott portfolios, Sorenson said. He also said he anticipates savings on contracts with online travel agencies.
“With its greater scale, Marriott has historically been able to obtain more attractive OTA contract terms,” he said. “While savings to Starwood hotels will vary by region, applying Marriott’s contract terms should save Starwood owners OTA commissions, even assuming no change in OTA usage, with more savings expected in 2018.”
Sorenson asked for patience regarding Marriott’s integration strategy and synergy opportunities.
“Every market is different and every property is different,” he said. “We can tell you we’ve reviewed and assimilated a tremendous amount of information from Starwood over the last six weeks and that we remain as enthusiastic about the transaction as ever.
North American demand growth continues to moderate, Sorenson said, as hotels with the weakest revenue per available room were mostly in the oil and gas markets as well as gateway cities with weak international inbound travel or new supply.
New group business was encouraging, he said, as Marriott and Starwood sales organizations booked a combined 3.6 million roomnights for future periods. That’s 6% more business than last year, he said.
However, corporate customers are still cautious, Sorenson said. He cited the company’s second-quarter earnings call and said RevPAR growth from legacy Marriott’s largest 300 corporate customers dropped from 4% growth in Q4 2015 to 2% in the first quarter of 2016 and less than 1% growth last quarter.
“For this quarter, room revenue from legacy Marriott’s top 300 customers was flat year-over-year, as higher demand from professional services, retail and health care firms was offset by lower demand from technology, financial, energy and manufacturing companies,” he said.
When asked about group pace falling from 7% growth to 2% growth, Sorenson clarified that the 7% comes from legacy Marriott while the 2% is the combined company. Legacy Marriott’s decline is a drop from 7% to 4% growth, he said.
“I think the bulk of the impact is in volume,” he said. “In other words, no, it’s not rate. And it’s simply this relative caution about near-term commitments.”
On a positive note, bookings in Q3 for future periods were up about 8% to 9% compared to bookings in 2015, Sorenson said. Numbers for 2018 are in the high single digits, he said.
Marriott should grow its global room distribution by about 5% net of deletions in 2016, Sorenson said. Some delays have pushed back some Marriott and Starwood openings into early 2017, he said, but new deal signings are strong. By the end of the quarter, the combined pipeline came to almost 420,000 rooms, he said. In 2017, room growth should grow to about 6% net of deletions, he said.
The combined brand portfolio represents 14% of open rooms in the U.S., he said. The company now has 36% of rooms under construction in the country and 23% of rooms under construction around the world.
Sorenson said he is optimistic about brands like Aloft and Element. The franchisee community in the U.S. has seen these brands and is interested in them, he said.
“We have already seen that there is a strong appetite to grow those brands,” he said. “I think Starwood saw that even before we closed the transaction with significant increase in the signings for those brands in the United States and we’ll focus on those. We’ll continue to make sure that we refine them without changing the kind of customer idea that they’ve got and we think we’ll see growth of those brands accelerate quite significantly.”
By Bryan Wroten
Source: Hotel News Now
Marriott International, Inc. (NASDAQ: MAR) and Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT) today announced their merger transaction has received approval from the Chinese Ministry of Commerce (MOFCOM). As this was the last regulatory approval required to complete the merger, Marriott and Starwood are now able to proceed with closing the transaction and expect the transaction to be completed before the market opens on September 23, pending satisfaction of customary closing requirements. Upon closing, Marriott will solidify its status as the world’s largest hotel company.
With shareholder approval now on the books and the Marriott and Starwood merger succinctly moving forward, hotel executives have returned to the course of retaining their hand-wringing loyal customers.