Just how does Marriott intend to proceed now that it owns Starwood Hotels & Resorts and has 1.6 million guest rooms spread out over 30 hotel brands worldwide? And now that it’s considered the world’s largest hotel company, with a much larger global, more international presence than ever before?

Those questions were on everyone’s mind, especially investors, when Marriott held its third quarter 2016 earnings conference call Tuesday.

Just eight days before the close of Marriott’s third quarter, the company’s dramatic, long-awaited, $13.3-billion acquisition of Starwood finally closed. And with that addition to its balance sheet, Marriott’s third quarter results were, predictably, a bit mixed because of $228 million in costs related to the deal, which Marriott CEO Arne Sorenson called “the most transformational transaction in the company’s history.”

Sorenson addressed investors’ interests at the top of the call, saying, “We know you are anxious to hear much more about our integration strategy and synergy opportunities. Let us ask you for your patience. The hotel business is about details. Every market is different and every property is different. We can tell you we have reviewed and assimilated a tremendous amount of information from Starwood in the last six weeks.”

And while he and his executive team were somewhat tight-lipped about the exact details of what they intend to do going forward with the integration, they did paint a clearer picture as to how they plan to proceed.

Here’s what could be gleaned from their answers:

Loyalty Is Everything

CEO Sorenson hasn’t been shy in stressing the absolute importance of the loyalty program in relation to this deal. At one point, after last-minute takeover bidder Anbang stepped away, Sorenson said, “The most important thing for us to succeed at [in this deal] is the loyalty program.”

That statement continues to ring true, and it explains why Marriott was so eager to link its own Marriott Rewards and Ritz-Carlton Rewards programs to Starwood Preferred Guest (SPG) immediately after the deal closed on September 23.

Since linking the programs, Sorenson said more than 3.3 billion points were transferred among all three programs just within the first month alone, and the very first points transfer and status match was completed within 15 minutes after the transaction closed. Marriott also discovered that among the 85 million total members of all three loyalty programs, only 16 percent, or 13.6 million members, belonged to both Marriott/Ritz-Carlton Rewards and SPG.

“Early response from our customers about linking those programs and matching status is very comforting,” Sorenson said. “That is exactly the kind of response we want, and it will hopefully drive larger share of wallet for us with an even larger loyalty community.”

Sorenson also wanted to assure customers that Marriott is paying close attention to the eventual integration of all three programs, and taking special notice of redemption rules, late checkout, and numerous other aspects of each program to make sure they “do right by the customer and do right by the program.”

Holding on to loyal SPG members and Marriott Rewards members will be crucial for Marriott’s loyalty scheme to succeed. Already, there have been attempts by other hotel companies to try to woo away SPG members with promotions, including a failed attempt by Wyndham Hotels Group, whose Wyndham Rewards program has been gaining notoriety as of late. Hyatt, another competitor, is also planning to unveil a new loyalty program in March 2017 that will replace its existing Hyatt Gold Passport program.

Loyalty’s Connection to Direct Bookings

Like its peers, Marriott has pushed for more customers to book direct and while Sorenson said it’s still too early to tell exactly what kind of an impact the company’s direct booking push is having, it’s not a strategy Marriott plans to abandon anytime soon.

“Those loyalty programs, managed well, should allow us to drive that much more of our business directly from our most loyal members,” he said. “It’s the cheapest business for us to book because it comes to us and books to us directly. You’ve got to nurture that by delivering real value to those customers.”

Delivering value to customers, he said, involves free Wi-Fi, member rates, mobile check-in, keyless entry, and loyalty points. “These are already things that are available to our loyalty members but not to other customers. We’ll continue to make sure we are managing that in a way that will give us good protection from threatening intermediaries or newfangled ideas that are seeking to upend that relationship.”

Is the direct booking push working? Sorenson said, “We don’t have statistics that we can use that would prove to you that we have delivered true success from this yet. But in the early statistics, we see a high level of sign ups, something like 800,000 or 900,000 incremental Marriott Rewards sign ups since the member only rates were launched.”

More importantly, Sorenson noted, getting the message out that “it pays to book direct” or encouraging customers to, as Hilton has promoted, “stop clicking around,” is half the battle.

“I think we are getting through the din of marketing battles,” he said. “As we’ve talked about in the past there was a perception that rates at our hotels were cheaper on channels other than our own which has not been true for well over a decade and we wanted to find a way to break through that noise and make sure folks knew they could get competitive rates by booking direct with us. There’s a bit of a discount by booking direct with us. Good pickup of that marketing message, good stickiness with the loyalty program.”

While the discounted loyalty member rates have had a “modest” adverse impact on revenue per available room (a common hotel industry metric) of about 30 basis points, Sorenson said Marriott hotel owners remain “supportive” too.

Not much was mentioned regarding online travel agencies (OTAs) during the call, however Sorenson said, “Next year, we should see savings on OTA contracts,” with more savings planned in 2018. Translation: That added scale from 11 more brands helps when you meet at the negotiation table with the OTAs.

About Those 30 Brands

Sorenson noted, as he has before, that the 30 brands from the combined Marriott and Starwood are not going anywhere. And while 30 brands are a lot for a single hotel company to have, and Marriott probably wouldn’t have endeavored to come up with 30  hotel brands from scratch, the company’s approach to managing all these brands will hinge on loyalty.

Whereas other multi-brand hotel companies (Hilton, for example, comes to mind) may try to market their different brands by emphasizing how different each one is from the other, Marriott isn’t necessarily going to focus all of its time, energy, or finances to do that, Sorenson said.

“That’s no longer our model if it ever was. Our principal model is we go to market through our loyalty program, through our .com sites, and our app. Those things allow us to market a portfolio and offer through that portfolio an incredible range of choice to our customers, which drives conversion, from looking to booking, that much higher and makes the economics of each brand that much stronger than weaker. We’re going to keep these brands and continue to grow them.”

Two Starwood brands, in particular, that Marriott is focused on growing are Aloft and Element, both of which operate in the select or limited service space.

“We’ll continue to focus on these [brands] and that we continue to refine them without changing the kind of customer idea that they’ve got, and I think we will see the growth of those brands accelerate quite significantly,” Sorenson added.

Is Marriott’s approach the right one? Only time will tell if it can successfully leverage its scale, distribution, and loyalty to success with as many as 30 brands.

Hilton, for one, doesn’t think that’s the best way to run a multi-brand hotel business. During Hilton’s third quarter earnings call, CEO Christopher Nassetta said Hilton’s brand strategy revolves around “pure-bred brands” that “have clearly defined swim lanes.” Most hospitality branding experts also agree with Nassetta’s approach, saying that differentiation is crucial in hospitality branding.

Marriott’s Global Brand Officer, Tina Edmundson, said she and her team will be working hard to “solve some of those riddles” of many of its brands occupying the same swim lanes, but whether that will be easy to do without eliminating or significantly altering some of the brands will certainly be a challenge.

And from what Sorenson said, it seems more likely Marriott will invest in promoting its overall portfolio and loyalty program than in each individual hotel brand. That’s already taking place with its latest Marriott Rewards campaign, “You Are Here.”

The Integration Continues

In addition to making sure the loyalty program succeeds, Marriott’s other immediate priority is implementing the same technology systems at all of its nearly 6,000 hotels in 120 countries worldwide.

Marriott CFO Leeny Oberg said she expects fundamental systems to be standardized across all hotels “well into 2017.” Whether or not that can be accomplished across such a wide and truly global portfolio of properties, however, remains to be seen.

And what about those $250 million in cost savings or synergies that Marriott hoped to achieve from buying Starwood? Both Sorenson and Oberg said they’re fairly confident Marriott will see the “lion’s share” of that $250 million in savings by next September, if not early 2018.

Whether or not those technology system switches and cost synergies are accomplished within a year of closing, it’s clear this overall integration process isn’t a sprint, but a marathon–just like the whole Marriott-Starwood acquisition process was, in some sense. Only time will tell if Marriott’s purchase of Starwood and its $13-billion bet on loyalty will continue to keep the company at the head of the pack in the long race ahead.

Photo Credit: The JW Marriott in Los Cabos. Marriott's third quarter results were mixed, but the company gave a bit more insight into how it plans to proceed with its integration with Starwood. Marriott International