News: Is Marriott having second thoughts over the Starwood deal?
Here’s some hotel industry gossip courtesy of the New York Post: according to the Post, a mild case of buyer’s remorse over the hotel company’s recent $12 billion Starwood acquisition has set in over at Marriott’s executive suite – in part because of a dawning realisation over the difficulty of combining the two companies’ reward programmes. Could a potential roadblock over Chinese approval of the merger leave Marriott with a late-breaking emergency exit?
While the Post story mostly focuses on the delay in approval of the deal in China by the Chinese Ministry of Commerce, the Post also reports of “growing unease” within the Marriott ranks about the difficulty of integrating the two companies – especially their respective reward programmes. Money quote from the Post:
“Starwood, through brands like W Hotels, has a younger and more affluent clientele that is used to a more flexible points system than the staid Marriott brand, according to [David Katz, managing director at the Telsey Advisory Group].’This isn’t exactly what they thought they were buying,’ said [Katz].”
Katz goes on to speculate that Marriott might even welcome the Chinese scuttling the deal as an “emergency exit.” We won’t add to that speculation, but should the deal go through, we’ll be watching the integration closely. It isn’t often that two mega-successful loyalty programmes merge, and the lessons learned from that experience will be welcome ones indeed for the broader loyalty marketing industry.
Read the New York Post article here.