Marriott Reveals More About the Merger

Yesterday Bloomberg posted an article from an interview with Marriott’s global brand officer, Tina Edmundson.  In the article, Marriott reveals more about the merger with Starwood.  While the article answers some questions about the future of the two hospitality giants, some important questions remain.

In the article, Marriott’s Tina Edmundson states that Marriott will keep all 30 brands of the combined company.  As you can imagine there will be much overlap between Marriott’s and Starwood’s brands.  Edmundson admitted this much, and went on to explain how Marriott would deal with this.  She used Marriott’s and Starwood’s luxury brands in her example.

As we know, Marriott’s pre-merger luxury brands are composed of Ritz-Carlton, Ritz-Carlton Reserve, Bvlgari, Edition, J.W. Marriott, and the Autograph Collection.  Starwood’s pre-merger luxury brands are St. Regis, The Luxury Collection, Le Meridian, Tribute, Design Hotels, W, Aloft, and Westin.  Within these, there are few really easy to identify overlaps, such as Ritz-Carlton and St. Regis.  According to Edmundson, despite their similarities, both of those brands fulfill an a unique need.  The Ritz-Carlton appeals more to those looking for discovery, while St. Regis appeals is more about “status and connoisseurship.”  In other words, Ritz-Clarton hotels are ones you go to when you want to explore a destination, while St. Regis hotels are the destination.

The new Marriott intends to play off the similarities outlined above.  And to that end, Marriott will split its luxury brands into two divisions: “classic luxury” and “distinctive luxury.”  Classic luxury will appeal to traditional and business-friendly travel.  Distinctive luxury will be more “boutique-y.”  That being said, the Autograph Collection, along with Westin and Le Meridian, will not be a part of the luxury group.  Instead, these three brands will of a new “distinctive premium” group.  While this might not seem like a significant change, the article speculates that there is potential value in this arrangement.  If, for example, the new combined loyalty program bases redemption values on the group a property falls into, 4 and 5-star Autograph Collection properties could become a great reward stay value.

Of course, what the combined luxury brand will look like remains to be seen.  Edmundson, and Marriott at large, has remained tightlipped about what’s in store for the three loyalty brands now under its control.