Marriott CEO Arne Sorenson and Starwood Interim CEO Adam Aron addressed letters to their most important customers on Monday: hotel owners.

That right there reflects the importance of stakeholders,” says Alan Lewis, partner, L.E.K. Consulting. “They are obviously very keenly sensitive to the fact that these owners can be very active advocates for themselves and have a choice of who they flag with. Consumers don’t recognize this, but if anything the most important customers for these hotel brands and flags are the owners.”

Marriott caused a stir after announcing its plans to buy Starwood Hotels & Resorts for $12.2 billion, creating the world’s largest hotelier with more than 5,500 properties spanning over 100 countries.

The deal, the first major M&A since Blackstone acquired Hilton in 2007, has left the hotel world asking plenty of questions, like what this mega-merger means for guests, loyalty points, partnerships, the OTA landscape, and staffing. Can a beast of this size integrate successfully, or, like nearly 70 percent of all mergers, is it doomed to fail?

Yet overlooked and largely cast aside in the media shadows are the hotel owners, especially those operating at a local level. Yes, Marriott’s merger with Starwood creates an unparalleled economies of scale with enormous distribution capabilities, which is compelling for hotel owners seeking to join larger networks, especially new owners who would have a larger access to guests than before, Lewis says.

But consider somewhere down the line perhaps 18 months from now when Marriott and Starwood begin to meld their loyalty programs under one flag.

“In this instance, you are going to have owners who feel like, ‘I own a Marriott in one town, and now there is a Westin down the road where all of a sudden my loyal customers can stay in because our loyalty programs are aligned, and now I have to run the risk of not being able to keep them at my property,’” Lewis says. “There are going to be changing dynamics at a local level where properties will feel that they are coming to a different position relative to the existing Starwood or indeed Marriott properties that were once across the street.”

It is a predicament that is likely to leave owners feeling anxious about their positions in local markets, Lewis says.

Detroit is one such example. A November 16 article in the Detroit Free Press points out that two of the major hotels in the city’s downtown area are the The Westin Book Cadillac and the Detroit Marriott at the Renaissance Center.

With the merger comes significant overlap where certain markets may be home to Marriott, Renaissance, W, Westin, Sheraton, says Steve Hennis, director, STR, which leaves analysts wondering how Marriott can handle such concentration.

“How do they appease the owners who might feel that they are potentially in violation of creating a competitive environment simply by the acquisition of these other brands?” Hennis asks.

Take Edition Hotels, Marriott’s upscale cultural arm, and W Hotels, Starwood’s counterpoint, claiming space in luxury lifestyle category. Having both brands encroaching on each other in the same market may not be necessary.

The investors behind those full-service properties want to know that the Marriott or Starwood structure that was generating rooms nights before is not going to be shifting them to one of the other properties in the market, Hennis says.

“What happens there? Do they spin off those brands to other companies and just take the better properties, or do they convert some of the properties to different brands to gain more traction?”

It remains unclear what effects spinning off brands or converting properties will yield for owners, Hennis says, adding that if he were an owner, he would be concerned only if he were involved with a weaker brands like Sheraton.

Del Ross, managing partner, Noctober Value Partners, LLC, sees Sheraton problems coming to the forefront in 2017, predicting that company will exit the Marriott umbrella to become part of IHG-branded or Wyndham-branded hotels.

Still, the Marriott influx hitting some markets may be cause for some concern, Lewis says, with the post-integration period becoming a time when owners will become keenly aware of their revenue-per-available room (REVPAR).

“[Owners will] look to see whether the combination has resulted in a powerful pipeline of bookings through their direct channels and the reach and power of their combined brands, and how has that transpired on the ground in properties,” Lewis says.

The merger is still in its early stages, as it has so far been approved by the boards of both companies and now moves on to approval by investors.

The likelihood of the merger being rejected is small, Ross says.

“The only possibility of rejection would be regulatory, or antitrust, but it is not enough concentration and there is enough diverse ownership that I don’t think it is going to be an issue,” Ross says. “It is a good deal for Starwood stakeholders. For Marriott, I am not sure how their owners feel about this, but in the long run, Marriott has done a great job for its investors, so they might be willing to ride that out for a little while.”

To a degree Hennis agrees with Ross, saying that antitrust hurdles will probably not be the case on the macro-scale.

“But there is concern in certain markets where suddenly Marriott has control on 50 percent of the inventory on some of those downtown locations,” Hennis says. “That could create an issue, and even some of the resort locations, like in Hawaii…with Starwood and Marriott as probably two of the biggest hotel players in Hawaii having a huge part of that inventory. What does that for the competitiveness of the marketplace? That’s a big question.”

Photo Credit: The Westin Book Cadillac Detroit is one two major hotels in downtown Detroit, and the Detroit Marriott at the Renaissance Center is the other. The Westin Book Cadillac Detroit