Marriott & Starwood: Creating the world’s largest hotel chain

At the beginning of May 2016 the final chapter of one of the most anticipated deals in the hospitality industry was completed. Around a year previously it became clear that Starwood was considering offers on its business and its rivals began to circle. A number of offers were made from multiple different hotel groups but it was the Marriott that eventually managed to secure the deal. The rewards scheme business model is hugely important still in the hotel industry and investors and clients have been very nervous about how the two rewards schemes would combine, worrying that Starwood or Marriott customers may lose their carefully cultivated rewards in the merger. There are also some last minute legal challenges to the deal which could still scupper it. The final figure that secured the deal will likely hit around $12.4 bn and by room count would create the world’s largest hotel chain.

Scope

 Analyzes the hotel industry looking at the strengths and weakness of Marriott and Starwood.

 Looks at the changes within the industry including mergers and acquisitions.

 Considers threats from competitors and the future of the industry

Reasons to buy

Are others in the industry considering acquisitions?

What are the main threats in the industry?

Just how important is the rewards scheme in the industry?

Companies mentioned

None

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