The Real Deal New York

Marriott to keep all 30 flags after $13B Starwood deal

World’s biggest hotelier plans to shake up portfolio

November 28, 2016 10:23AM

From left: the Ritz Carlton at 2 West Street, Marriott's Arne Morris Sorenson and the St. Regis at 2 East 55th Street

From left: the Ritz Carlton at 2 West Street, Marriott’s Arne Morris Sorenson and the St. Regis at 2 East 55th Street

Marriott International’s $13 billion acquisition of Starwood Hotels & Resorts made it the largest hotel operator in the world with 5,700 properties and 1.1 million rooms spanning 30 different brands – each of which will remain distinct and separate in the new company.

Marriott had 19 brands prior to the deal, including its luxury flagship Ritz-Carlton, which competed with Starwood’s luxe St. Regis properties.

As the deal neared completion, observers speculated that Marriott might fold similar properties together, but global brand officer Tina Edmundson said the plan is to keep all 30 flags intact.

“We thought long and hard about how you serve up 30 brands in a meaningful way — one that helps consumers infer both price and experience,” Edmundson, who spent 18 years earlier in her career working at Starwood, told Bloomberg News.

Edmundson said eight of the 30 brands will be designated as “luxury,” marketed toward two different types of travelers.

Properties like the Ritz-Carlton, St. Regis and JW Marriott will be pitched as “classic luxury,” while five other brands will be geared toward customers with more modern and boutique tastes.

One brand not included in the luxury category is the Autograph Collection, which could be a great deal for travelers if the new loyalty program bases redemption values on where the flag falls in the company’s new spectrum.

Autograph, a brand of independent four- and five-star hotels, is being put in the same “distinct premium” bucket as hotels like Le Meridien and Westin.

Edmundson said that there are “some instances where a hotel that’s part of Autograph Collection could be a better fit for the Luxury Collection, and vice versa,” but that the company has “no plans to make any changes.”

When it comes to similar brands like the Ritz-Carlton and St. Regis, Edmundson said the company thought long and hard about how to take two flags that used to compete for the same customer and have them work together under the same company.

The answer, she said, is to accentuate the subtle differences already in place.

“Luxury customers are looking for everything but lean more heavily on Ritz-Carlton for facilitation [to explore a new place] and on St. Regis when they want the hotel to be the destination,” Edmundson. “The St. Regis customer is looking for the hotel to serve up performances by jazz legends or signature rituals like midnight supper and St. Regis bloody marys.” [Bloomberg] Rich Bockmann

MENU