The completion of Marriott International’s acquisition of Starwood Hotels & Resorts has significant consequences for the Middle East and Africa, in one swoop doubling the hotel giant’s operations in the region.
On Friday morning, Marriott announced that the closure of the deal to create the world’s largest hotel chain, a $36 billion giant with more than 5,700 hotels and 1.1 million rooms.
“We’re about doubling overnight, from about 25,000 rooms to about 52,000 rooms,” Marriott chief executive officer Arne Sorenson told Arabian Business in a telephone interview.
“It’s 238 hotels open and I think we’ve got another 40,000 rooms and 150 hotels in the pipeline, so when those hotels open we will be fast approaching 100,000 rooms. That gives us real scale in the Middle East and Africa.”
Marriott now oversees 30 brands, including The Ritz-Carlton, St Regis, Sheraton, W Hotels and Westin.
The merger was approved following approval from the Chinese antitrust regulator on 20 September.
China's Ministry of Commerce (MOFCOM) was the only review pending after the companies secured premerger approvals from more than 40 countries including the United States, the European Union and Canada.
Sorenson said that Marriott’s size would enable the company to operate more efficiently and drive greater economies of scale.
“I think the biggest thing that size delivers for us is choice for our guests,” he said. “We think that Marriott and Starwood already had the two leading loyalty programmes in the industry. A significant piece of that is the choice that each portfolio has offered members.
“We now can offer even dramatically more choice and that is about the number of countries, of course, the number of hotels, it also goes back to this brand question. So if you want a luxury experience, or a lifestyle experience or you need an economy experience, we’ve got a place for you to stay.”
The chief executive said that Marriott would be investing in its loyalty platform, and would also be focusing on delivering a stronger performance from the firm’s hotel owners.
“That’s about both topline growth by taking more share of wallet from our guests and about operating more efficiently because of the economies of scale we think we can deliver, which in turn should drive better new unit growth for the rest of the years ahead,” Sorenson added.
Starwood shares have now ceased trading on the New York Stock Exchange, with its shareholders receiving $21.00 in cash and 0.80 shares of Marriott International, Inc. Class A common stock for each share. (Source)
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