This week’s Travel News is providing you with some insight into the pending acquisition of Starwood Hotels by Marriott. A lot of Starwood fans and bloggers are up in arms about the pending doom of their favorite hotel chain and rewards program – but is it really going to be so bad? I think the news of doom are exaggerated and here is why…
I can understand why a lot of people are upset: Starwood has a lot of luxury and upscale properties and they have set the pace on style from the upscale W Hotels to the mid-scale aloft properties. In comparison, the most common Marriott brands, like Courtyard are rather boring and ho-hum. On top of that, many SPG members, Starwood’s rewards program, feel pampered by the perks, like suite upgrades that they don’t see at Marriott.
And yet, these very differences are why this merger makes a lot of sense, from an investor and a traveler perspective:
More than 70% of Marriott’s properties are mid-scale, while Starwood has 75% luxury and upscale properties! But keep in mind that Marriott still has more upscale and luxury hotels by numbers, just based on its superior size!
The joint company will have a lot more to offer across all budgets. Starwood didn’t have a lot of success in the mid-scale market with its Four Points brand and has no offer in the extended stay market – it will benefit from Marriott’s expertise in these markets.
Similar benefits can be found when looking at hotels by region: Marriott had a very limited presence in Asia, where even the much smaller Starwood has more hotels, and in Europe. Marriott has only 15% of their properties in those regions while Starwood has 45% there!
The joint company will have a much better global reach, making it easier for travelers to stay with the company when traveling abroad, allowing Marriott/Starwood to keep loyal travelers from “flirting” with other hotel chains!
But what about the reward programs? Are SPG fans doomed? I don’t think so. As you can read in my SPG Review, I think the program is overrated. While it was great in the past, it has not kept up with regards to earning and redeeming miles and is one of the worst values in the industry today. And the much ballyhooed perks are ever elusive. Many of the “guaranteed” upgrades are from a regular room to an almost identical “SPG Preferred” room, only distinguished by a hallway sign and some water bottles in the room. And for some of the most treasured benefits, like a guaranteed late checkout, Marriott has already taken steps to align the benefits across both programs. Keep in mind that Marriott also has a somewhat separate program for its luxury brand Ritz Carlton – I could see them create a high-end sub-program for Ritz Carlton and the Starwood luxury brands, like St. Regis, Luxury Collection or W, that offers special perks for frequent, high-paying guests at those brands.
One area that might become a problem are the different corporate cultures – something I have seen as a cause for post-merger integration issues in my corporate career. Marriott is one of the most disciplined companies with regards to managing the brands, setting tight standards for the hotels that are closely monitored and enforced. It has even published penalties for hotels that don’t deliver on the brand promise, allowing travelers to request them (which I think is the best way to enforce reward program benefits and service standards, by the way). This has let to very consistent service where ever you go, down to the same jam being served at Courtyard’s across the country. But the other side of that “reliable” coin is that many hotels are just plan boring, because they are all the same! Starwood on the other hand has been on the leading edge of hotel design and styling, with the outstanding W Hotels leading the way and the aloft and element brands following at lower price points. But Starwood has also struggled with consistency, with their Sheraton brand being one of the worst with regards to standards. You never know what you will get, from a true, upscale Sheraton to a run-down airport hotel not much better than a budget motel! If Marriott can manage the merger well, they might benefit from a splash of style that Starwood can bring, and Starwood might benefit from an experienced hand to fix their ailing Sheraton and Four Points brands!
Overall, this is great news for travelers. You’ll have more choices across price categories and around the world from this merger. Marriott has an opportunity to leverage the strengths that Starwood brings with their style and lend their strengths to improve the brand management at Starwood. By aligning their rewards programs carefully and enhancing benefits for top elites along the SPG program lines, pampered elite members should find a lot to like in an overall better program. I, for one, look forward to the integration moving forward and would expect to stay more at Marriott and SPG properties in the future than I have in the last few years!