After Starwood deal, more hospitality mergers likely

Short-term rentals, online bookings cutting into profits

TRD New York /
Nov.November 17, 2015 11:50 AM

The forces that led to Marriott International’s $12.2 billion purchase of Starwood Hotels & Resorts this week – pressure from online booking sites and short-term rental services like Airbnb – are likely to lead to more hospitality mergers in the near future, according to industry experts.

“The reality is that all these groups need to become bigger and stronger to be able to fight against the newcomers,” said Andre Juillard, an analyst at Kepler Cheuvreux SA.

“We’ve been expecting consolidation for a while,” Juillard told Bloomberg. “We can see more deals coming to market.”

The Marriott-Starwood deal followed the purchase of Strategic Hotels and Resorts, owner of Essex House at 160 Central Park South, by the Blackstone Group in September for just under $6 billion, including debt.

“The scale of this merger was done to fight the OTAs — the online travel agents — and also the potential threat of Airbnb,” Barry Sternlicht, Starwood Hotels’ founder, told Bloomberg.

Companies in that space are consolidating as well, with Expedia, the online travel site, buying Airbnb-competitor HomeAway earlier this month in a deal worth $3.9 billion. [Bloomberg]Ariel Stulberg

Related Articles

Blackstone's Jonathan Gray (Credit: Getty Images and iStock)

Here’s a look at Blackstone’s industrial plays after its record-breaking portfolio purchase

From left: Jonathan Gray and Steve Schwarzman with Stuyvesant Town

Behind Blackstone’s “capital strike”

October Issue is Live

The Real Deal‘s October issue is now available to subscribers!

Blackstone's Jonathan Gray (Credit: Getty Images and Wikipedia)

Blackstone buys Colony Capital’s warehouse portfolio for $6B

Here’s why landlords don’t hate California’s rent control bill

Here’s why landlords don’t hate California’s rent control bill

65 East 55th Street and EQ Office CEO Lisa Picard (Credit: Park Avenue Tower and VTS)

Blackstone looks to sell Park Ave Tower for more than $800M

Blackstone CEO Steven Schwartzman and Stuyvesant Town (Credit: Getty Images)

After authorities vowed review of Stuy Town deal, Blackstone changes course on vacancies

Blackstone CEO Stephen Schwarzman and Stuyvesant Town (Credit: Getty Images)

Authorities will conduct review of Stuy Town deal in light of Blackstone’s vacancy strategy