Skift Take

While Starwood's marquee brands will likely survive the acquisition, its mid-level brands could face challenges.

Starwood Hotel & Resorts has been on the block for months, but its sale to Marriott International is something of a surprise.

In a letter to its hotel owners, Starwood’s interim CEO Adam Aron assured hotel owners that the deal will be positive for them once it becomes official in mid-2016. Because of the asset-light strategy of the modern hotel business, it’s important for hotel chains to keep owners happy lest they sign operating agreements with other brands.

Here’s the text of his letter.

Dear Starwood Owner,

We are reaching out to you to share some exciting news. Today, Starwood and Marriott International announced plans to join together to create the world’s largest hotel company. This combination is designed to drive value to you and our shareholders. Together, our combined guest and customer base, loyalty program and powerful global platform is expected to deliver more business to your hotels, increase efficiency to lower your costs, and enable increased investment in revenue-generating technology and innovation.

This marks the conclusion of the review of strategic and financial alternatives that Starwood’s Board of Directors began in April, and we couldn’t be more pleased with the outcome. Combining Starwood’s passion for innovation with Marriott’s excellence in execution will create not only the biggest but also the world’s best hotel company. Joining forces, our new company will have 1.1 million rooms, across 30 brands and 5,500 hotels in over 100 countries on six continents. It will be the biggest, global hotel company in the Americas, Asia Pacific, and Africa & the Middle East, as well as the world leader in luxury, upper upscale and upscale, offering unrivaled choices and experiences that will translate into greater share of wallet and more business to your hotels.

Both Starwood and Marriott are acutely aware that our ability to succeed greatly depends on our ability to serve you and your hotels. This combination better positions us to effectively and efficiently drive profitability at your properties. We know you have choices when it comes to selecting a partner and hope you will continue to trust us and our brands as we take this bold step forward.

We do expect this deal to close by mid-year 2016. Until then, Starwood and Marriott will continue to operate business as usual as two separate companies. Our General Managers and hotel associates will remain focused on what matters most, taking great care of our guests and delivering strong returns for you.

Today is the first day of long journey and there is still much to sort out. We are in communication with your General Managers and will continue to keep you updated as our plans progress. Please feel free to reach out to our team with any questions. Thank you for your continued partnership—you have been and will continue to be critically important to our success.


Adam Aron
Chief Executive Officer on an interim basis

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Tags: marriott, marwood, starwood

Photo credit: The W Union Square in New York, N.Y. shawnhoke / Flickr

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