A few weeks ago Marriott and Starwood officially announced plans to merge. At the time there were no other bidders and it appeared the deal would close without any issues. At the last minute, Anbang Insurance Group announced their intentions to acquire the Starwood brand. The bid was higher than what Marriott was willing to pay and it appeared Anbang would end up owning Starwood Hotels. It was hard to understand why Anbang Insurance would take an interest in owning a hotel brand. Marriott taking over ownership seemed like the best option for shareholders and travelers due to the synergies that would exist between the two brands. After a few confusing days, Anbang decided to pull their bid, leaving Marriott as the highest bidder once again.
Today, shareholders have reached an agreement for Marriott to purchase Starwood Hotels. Current Starwood shareholders will receive .8 shares of Marriott stock and a $21 cash payment for every share of Starwood owned. Now that the shareholders have approved the acquisition, it is almost impossible for new bids to be introduced. Although the acquisition has been approved by shareholders, it must still be approve by regulators, but there is no indication that the acquisition will be blocked. Marriott’s bid for Starwood is just over $13 billion and would make Marriott the largest hotel brand in the world.
It appears the acquisition should be finalized sometime in the middle of 2016 and given the time it takes to merge two massive companies, it would be reasonable to assume the two hotels will become one sometime in 2017. Travelers should be very excited about the new larger Marriott brand. As a frequent traveler it is in your best interest to pick a loyalty program and stick to it. Once you gain status with that brand, it becomes increasingly difficult to leave or try out other hotels.
The only concern that I have regarding the upcoming acquisition is the potential devaluation to the Marriott and SPG loyalty programs. We can assume that when SPG and Marriott merge there will be a devaluation of Marriott points. It will cost more points to stay at the same hotels once the two programs become one. This devaluation will be especially noticeable in the “Select Service” and “Full Service” hotels.
I think we can also expect to increased requirements to earn elite status in the new Marriott loyalty program. The current program requires 10 nights for Silver, 50 nights for Gold, and 75 nights for Platinum. It is estimated that SPG has 21 million members that will eventually be integrated into the Marriott Rewards program. With increased membership, I do not think it would be unexpected to see Marriott raise the requirements for elite status slightly.
When the two programs become one, it will be exciting to be able to stay at SPG properties and still earn valuable lifetime Marriott nights and Marriott points. I hope Marriott and SPG team up to build a “best-of” hotel chain, combining the best aspects of each chain to form the new Marriott brand.
In the meantime, I think SPG members should be slightly concerned about the transfer ratio of SPG points to Marriott points. Anyone with a large stockpile of SPG points may want to consider converting points to an airline or using them just in case Marriott does not keep the same transfer partners or devalues SPG points when the two programs become one. Today is an exciting day now that we know the two programs will become one and the months to come will hopefully prove to be beneficial to members of both loyalty programs.