Marriott CEO talks Starwood on CNBC today (Image: CNBC)
Now that China’s Anbang Insurance and its co-investors have withdrawn from the bidding war to buy Starwood Hotels and Marriott International’s acquisition of the company can move ahead, Marriott CEO Arne Sorenson went on CNBC to talk about it. See the 4-minute interview below.
Here are five points he made:
- Sorenson said the “most important thing” for Marriott to get right in merging with Starwood is the integration of their loyalty programs. “I think we can make sure the benefits stay the same if not get better, but offer them (i.e. members) a broader selection,” he said. “We’ve got to make sure [members] are enthusiastic about it.”
- The Marriott CEO did not estimate how long it might take to combine loyalty programs; he only remarked “I hope we can do some things very, very quickly.”
- One big thing to be worked out in the merger is settling on a credit card vendor for the combined loyalty programs. Marriott Rewards uses a Chase Visa card, while Starwood Preferred Guest has an American Express card.
- Regarding integration of the combined company’s 30 brands, it sounds like that’s going to take a while. According to the CNBC transcript of the interview, Sorenson says: “We’ve got separate owners of each of these hotels. And our contracts are long term…We don’t tend to have the right if you’re a hotel owner to say we’ve just decided to change the brand name on your hotel to something else. And so that would be something that really you had to work through with a collection of owners. I think instead we’ll try and do what we can to drive distinctions between the brands.”
- He said Marriott will “involve our customers” in some merger-related decisions. “These loyal customers are the primary reason for doing this deal so we want to make sure they feel good about it.”
Also interesting on CNBC today: Sorenson’s remarks about North Carolina’s anti-LGTB bill and it’s “not terribly bright” politicians. Video
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I think it bears keeping in mind that, by and large, we travelers are not Marriott’s real customers. Marriott’s customers are the people who own the hotels in the Marriott brands and pay franchise and management fees. It may look like Sorenson was talking to us, but he was not.
Apart from the fact that we tend to patronize airlines and hotels at the same time, they have two very different business models. I don’t know how applicable our airline merger experiences will be for this merger.
Will be interesting to see if the SPG loyalists become Hilton or Hyatt loyalists instead.
this never happens. All of the airline changes have been great…..oh wait.
“I think we can make sure the benefits stay the same if not get better”.
Write that down, and let’s see in two years whether SPG benefits “stay the same”. My bet would be that, like so many other loyalty programs, changes will be made that greatly reduce SPG benefits but the spin will be that the combined program is “improved”.