Marriott focuses on integrating Starwood culture following acquisition

The success of the Marriott International takeover of Starwood Hotels & Resorts is dependent upon a combination of the best bits of both companies, the 28th European Hotel Investment Conference was told.

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Carlton Ervin, chief development officer of Marriott International, said that following the $13.6b (£11.9b) acquisition in September, which resulted in the creation of the world’s largest hotel company with 5,700 hotels and 30 brands, the enlarged company is now focused on integrating the culture of the two businesses.

“We are focused on being the best and to do that we are taking the best bits from both companies,” he told the delegates at the Deloitte-organised conference at London’s Dorchester hotel.

“This is not about Marriott imposing ourselves on Starwood. Much of Starwood’s success was focused on its entrepreneurial spirit.”

Ervin was speaking during a session on mergers and acquisitions, in which he was joined on stage by Gaurav Bhushan, chief development officer of AccorHotels, which in July completed its acquisition of FHRI Holdings (FRHI), the parent company of the three luxury brands, Fairmont, Raffles and Swissôtel.

Bhushan said that FHRI was “one of the best fits in the market” for AccorHotels. “Buying the business has made the us a real global player in the luxury sector and also provided us with a small platform in the United States.”

Ervin went on to explain that the first offer of $12.2b (£9.8b) for Starwood by Marriott was made just three weeks after the bosses of the two companies met at an industry event.

“After the initial deal was announced, there was a real emphasis in the media that this was a very good deal for Marriott. There was a sense that this was too good a deal and so we were prepared for a counter offer.”

Ervin said it was therefore not a surprise when the Chinese-based Anbang Insurance Group put in a higher bid.

“We were prepared for this and as a result raised the extra money over a weekend.”

Ervin added that Marriott will continue to look to expand, but rather than add additional brands will look at ways to enhance the loyalty of guests.”

Future expansion for AccorHotels is likely to focus on the luxury, lifestyle and resort segments, where there is “tremendous scope for growth”, added Bhushan.

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