A competing merger is likely to derail Marriott’s plans to acquire Hotel giant Starwood. Anbang group has just placed a bid of $14billion for Starwood, and the latter is already viewing this is as a ‘superior’ offer. SPG loyalists will likely benefit from that deal going through.
The SPG program has some of the most devoted followers around the world, thanks to the value of their rewards through redemption offers provided at various properties. Currently, Starwoods points are valued at around 2 to 2.5 cents, and with Marriott publicizing their intent to purchase the group, devaluation seemed just around the corner where loyalty rewards were concerned. It came as no surprise when members reacted with disapproval to a merger with Marriott, whose points are valued at 0.7 cents.
Marriott was almost set to become the largest hotel company in the world until Anbang intervened. The consortium of Chinese insurers has served up a more lucrative deal for Starwood to consider. A major player in US real estate with close over $2 billion stakes after purchasing Waldorf Astoria New York in 2014, not counting a $6.5 billion purchase of Strategic Hotels and Resorts and its 16 properties, Anbang almost surely is the real deal. Marriott is expected to bring in a counter bid.
For travelers, it is still not clear how things are going to turn out. Marriott’s deal would almost surely have devalued their SPG points, but there is no guarantee that Anbang’s contract wouldn’t do the same. Also, this would scarcely end the flood of mergers and acquisitions in the hotel industry. Anbang wouldn’t stop with just Starwood, and subsequent hotel purchases would only lead to consolidation, which would affect the way guests get rewarded for loyalty.
Loyalty programs are big these days, and Marriott’s CEO Arne Sorenson has said they wouldn’t eliminate any of Starwoods brands, including the St. Regisand W Hotels. This sort of approach isn’t new, and companies have been known to let their hotel acquisition operate independently. Anbang is more likely to let that happen though.
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