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What:Marriott International has agreed to acquire Starwood Hotels & Resorts for $12.2 billion, creating the world’s largest hotel company.
Why It Matters:Combined, Marriott and Starwood account for more than 5,500 hotels and over 1.1 million rooms. With the acquisition, Marriott will increase its brand count to 30 from 19, and executives from both Marriott and Starwood have said all brands will be retained. Marriott says it will see $200 million in annual savings within two years, primarily through administrative cost savings. Thanks to the acquisition, Marriott is expected to gain a larger presence in the lifestyle-brand sector, as well as more exposure to younger hotel guests, while Starwood will have more opportunity in the upscale and business travel sectors. Both companies are supportive of travel agents, so specific changes to agent programs should be minimal.
Fast Facts:- Together, Starwood and Marriott generated $15.1 billion in revenue through Sept. 30.
- Marriott is already the largest publicly traded U.S. hotel company by revenue, and with the acquisition it will pass Hilton and InterContinental Hotels Group in number of hotels and total room count.
- After the sale, Marriott will increase its brand count to 30 from 19 (compared to 12 brands for Hyatt Hotels and 10 brands each for Hilton and IHG).
- This spring, Starwood unveiled plans to expand the global footprint of its flagship Sheraton brand by about one-third with the addition of 150 hotels by 2020.
What They Are Saying:“Marriott will have a broader portfolio, provide better service and provide a deeper relationship with our guests,” said Arne Sorenson, Marriott CEO. “We expect Starwood’s brands to remain in place.”
“We’re accelerating Starwood’s trajectory as part of a best-in-class company,” said Adam Aron, CEO of Starwood. “We are thrilled about this transaction.”
Starwood Hotels & Resortswww.starwood.com