November 18, 2015 2:51 am

Marriott Bought Starwood for $12,2 Billion, Make The World’s Biggest Hotel Chain

Infossible_Marriott-Bought-Starwood

After the rumor that The Mirage Hotel will be acquired by Starwood several months ago, now this is what exactly happens: Marriott bought Starwood. On Monday, November 16th 2015, Marriott announced that Marriott bought Starwood for $11.9 billion in stock and $340 million in cash. This merged will create the world’s biggest hotel chain with 1.1 million rooms in 5,500 hotels across 100 countries.

Marriott bought Starwood is the biggest thing that ever happens in hotel industry recently. Even the investors and analysts were surprised when Marriott bought Starwood for $12.2 billion. Starwood, which brands include W Hotel, Sheraton, Westin, St. Regis, The Luxury Collection, Aloft, Element, and Le Meridien had effectively put itself up for sale in late April 2015. As reported by NYTimes, from all of the rumored suitors — Hyatt Hotels Corporation, InterContinental Hotels Group and a few Chinese companies — Marriott had not been seen as being in the mix.

Hyatt was a competitive bidder almost to the end, until the unexpected suitor, Marriott which operates brands including The Ritz Carlton and Bvlgari, had an offer that was similar to Hyatt’s. Surprisingly, the Starwood board ultimately agree with the offer due to Marriott’s stock had greater potential. Leader from Marriott and Starwood said the merged of two companies will bring greater opportunities in the future. As published on Marriott’s website, J.W. Marriott, Jr., Executive Chairman and Chairman of the Board of Marriott International said on statement:

“We have competed with Starwood for decades and we have also admired them. I’m excited we will add great new hotels to our system and for the incredible opportunities for Starwood and Marriott associates. I’m delighted to welcome Starwood to the Marriott family.”

Bruce Duncan, Chairman of the Board of Directors of Starwood Hotels & Resorts Worldwide also said on statement :

“During our comprehensive review of strategic and financial alternatives, it was clear that our talented people, world-class brands, global leadership and spirit of innovation were much admired and key drivers of our value. Our board concluded that a combination with Marriott provides the greatest long-term value for our shareholders and the strongest and most certain path forward for our company.”

The next question about the whole thing of Marriott bought Starwood is, what will happen to the loyal customer or member who have the reward program? Will they be able to use their loyalty program to both hotel brands? Currently Marriott Rewards have 54 million members, and Starwood Preferred Guest have 21 million members. Arne Sorenson, President and CEO of Marriott International said to Forbes that neither Starwood Preferred Guest nor Marriott Rewards members have anything to worry about as far as the programs go.

“They are both extraordinarily powerful programs and we will make them more powerful and relevant, noting that SPG members will not lose their points.”

The move to buy Starwood is also a defensive one for Marriott. With online travel providers getting bigger, Google investing in hotel finders and companies like AirBnB in the mix, traditional hotel companies are feeling pressured. For Marriott, a deal with Starwood means it can compete in size and resources.