With the freshly-inked merger, Marriott is now the world’s largest publicly-traded hospitality company.
Advertisement
Many members of Starwood’s best-in-class loyalty program have been anxious that the merger would water down their perks, which include suite upgrades, personal concierge and complimentary champagne.
Members who link their accounts will be able to transfer points at a three-to-one ratio (three Marriott Rewards points = one SPG Starpoint) between the programs for redemption stays or on the Marriott Rewards Experiences Marketplace or SPG’s Moments platform.
Among the biggest reasons Marriott was drawn to Starwood: It’s extensive rewards program, which includes 21 million members, many of whom are fiercely loyal to the company.
Marriott International president and CEO Arne Sorenson said: “We believe that Marriott now has the world’s best portfolio of hotel brands, the most comprehensive global footprint, and the most extensive loyalty programs, providing an unparalleled guest experience”.
Marriott CFO Leeny Oberg said on Friday’s conference call that Marriott will try to sell Starwood’s owned hotels while retaining the management and branding contracts.
Marriott has updated its loyalty rewards program to allow for a more seamless transition for customers previously under the Starwood Preferred Guest (SPG) program.
“Nothing changes immediately”, Sorenson said. The institutional investor owned 10,651,725 shares of the company’s stock after selling 3,350,000 shares during the period.
Marriott says it plans to squeeze $250-million in annual cost savings out of the combined entity within two years of closing the deal.
One way Marriott can leverage itself is with online travel agencies such as Ctrip, Alitrip, Booking.com, and Expedia. The company’s revenue was up 1.4% compared to the same quarter past year.
“We may have been a little too optimistic about how fast we could get this thing closed”, Sorenson said Thursday.
Mergers can mean job cuts and Marriott also is actively searching for a new headquarters location, both of which raise questions about the future makeup of its local workforce.
Advertisement
The $13.6B merger between Marriott and Starwood cleared its final hurdle this week when it received antitrust approval, and the deal is expected to be finalized before week’s end. For instance, in China, where Starwood brands have a greater presence, the parent company will emphasize opening hotels under Marriott’s legacy brands. The latest trading activity showed that the Starwood Hotels & Resorts Worldwide, Inc. share price went up +35.84% from its 52-week low of $56.87 and trades lower -8.44% comparing its 52-week high of $84.37. During its last trading session, Stock traded with the total exchanged volume of 18.6 million shares.
