If Expedia and Priceline thought Marriott was tough the last time they met to negotiate rates, just wait until the next time they meet.

This was mentioned by Laura Paugh, Marriott International’s senior vice president of investor relations, on Dec. 6 at the Barclays Eat, Sleep Play – It’s Not All Discretionary conference in New York.

“One of the things we’ve discovered after the closing of the transaction was that the Marriott contracts for the OTAs [online travel agencies] were better than the Starwood contracts,” she said. “When you think about it, we negotiated those contracts from a strength of 4,000 hotels and Starwood negotiated their contracts with the strength of a thousand hotels, and the difference was our contracts are already better and we haven’t even renegotiated yet with the 6,000.”

Paugh was describing some of the biggest benefits of Marriott’s massive $13.3-billion acquisition of Starwood Hotels and Resorts, which closed on Sept. 23, nearly a year after the deal was first announced. With Starwood, Marriott became the world’s largest hotel company with 30 different brands and more than 1.1 million rooms around the world.

What Paugh said about OTA contracts was just one of a few takeaways she gave at the annual conference for investors. Here are the rest:

Don’t Expect Any Major Changes in the Loyalty Program Credit Cards Until Late 2017

Right after closing its purchase of Starwood, Marriott took the unprecedented step of immediately linking its two programs — Marriott Rewards and Ritz-Carlton Rewards — to Starwood Preferred Guest. But as Marriott executives have noted before, it’s going to take much longer for Marriott to fully integrate all three programs, and their respective credit card programs.

“Marriott last year did about $120 million of branding fees associated with our credit cards,” Paugh said. “Starwood did roughly $30 million or so associated with their credit cards, as you know, in 2015. Marriott uses a JP Morgan Chase card. Starwood has an American Express card. We have agreements with both of the credit card companies that permitted us to link our loyalty programs and we’ve got some marketing programs associated with both of those that permit people to accelerate the points they’re earning right now. We’re already seeing improvements in card usage. We still need to negotiate with both of them and that’s still something that we’re working towards. I wouldn’t expect to see anything before probably the latter part of ’17 at the earliest.”

Brand Differentiation Is Tough, Especially with 30 Brands, But It’s Doable

Just two weeks ago, Marriott began the difficult task of formally differentiating all 30 of its hotel brands, categorizing them by category (luxury, premium, select, and longer stays) and distinguishing them as either “classic” or “distinctive.”

But many have wondered if Marriott will be able to successfully differentiate each of the brands not just from their peers outside of the company, but also from within, especially when many of them share similarities with each other.

Paugh pointed to Marriott’s purchase of Renaissance Hotels as an example of how Marriott has managed to market and brand each differently from each other.

“When we bought Renaissance Hotels probably in the early ’90s, Renaissance and Marriott were at similar — they still are — at similar price points,” she said. “They’ve actually thrived pretty well with a different customer segment. Customers go to a Renaissance and it’s a different style of hotel, it’s a different approach to the customer, and it seems to do very well. We don’t see a problem with having the [30] brands.] Obviously we need to define what the swim lanes are for each brand and how they’re going to play against each other and what sorts of brand standards will apply and how they may differ from brand to brand, but the thing that brings all of them together is the rewards programs, the loyalty programs, and the reservation system.”

And what will happen to Starwood’s Sheraton, a brand that’s been beleaguered in recent years with a lack of a real brand identity?

“What we’re thinking about with the Sheraton brand is that we really need to do some work, particularly on the domestic hotels, and redefine what the brand standards are for that brand,” Paugh said. “For many years, Starwood had brand standards they didn’t enforce. We really need to get the brand back to where it needs to be in terms of brand quality and service standards. You define what those brand standards are and you do that working with the owners.”

Paugh said she’s confident that Marriott can work with hotel owners to come up with the best brand standards and ways to improve existing hotels but also noted that, in some cases, some properties may choose to rebrand within the current Marriott portfolio, or may leave the system entirely.

“We’ve said that there, undoubtedly, will be a few that will leave,” she said. “I can’t give you any guidance right now what those numbers might look like. I don’t think it’s a lot, but we’re still working through this and it’s going to take some time to get it all done.”

The Full-Service Hotel Isn’t Dead

Contrary to some people’s observations that select-service or limited-service hotels are gaining more market share, and the full-service hotel is “dead,” Paugh said the real money remains in full-service, luxury hotels — and those aren’t going anywhere.

“If you own the hotel, the margins on a limited-service hotel are a lot better than a full-service hotel because you don’t have food and beverage,” she explained. “The most money a hotel can make is on rooms. We charge $200 a night and the margin there is very high. Food margins tend to be low, so the more food service in a hotel, the lower the operating margins. In terms of overall profitability, though, on a profits-per-room basis, we make a lot more money on luxury hotels than we do on Fairfield Inn. That would be true for an owner in an absolute sense of how much cash they’re driving, but it’s also true for us in the way of how much fees that we’re driving.”

Expect Growth in Aloft, Element, and St. Regis

When asked which of Starwood’s legacy brands would grow under Marriott’s leadership, Paugh said, “Probably Aloft, Element, and St. Regis would be the three that come to mind. Both Aloft and Element are vastly underrepresented. There’s huge white space for those brands. There’s a lot of excitement from the franchisee community for them as well.”

Does Marriott See Airbnb as a Threat?

Like its fellow hotel peers, Marriott remains steadfast in its opinion that Airbnb isn’t much of a threat to the traditional hotel industry but the company would like to see a more “level playing field,” at least when it comes to paying taxes and enforcement of safety and security considerations.

“Airbnb is a brand that really tends to do well with, certainly, younger travelers. It tends to do well on leisure stays, and it tends to do well with groups of leisure travelers, so you’re traveling with aunts and uncles and cousins and six kids and everybody wants to be together — It lends itself to that,” Paugh said. “That’s not much of our business, to be honest with you. I don’t think it’s resonating as well with corporate travelers who are arriving at 10 o’clock at night, leaving at 7 the next morning, and they don’t really want to go find a key or make their own coffee. They’re looking for some service and some reliability about the Internet access, to have the business center open and available. We haven’t really seen a big impact.”

When Airbnb does have a impact is during compression times, when city-wide leisure events take place.

“We don’t get as much ability to really press pricing as much as we’d like,” Paugh said. “In a time like that, where you could conceivably see big increases in room rates to deal with that sort of demand compression, you’ve got less demand compression because of Airbnb. We’ve not seen it really making headway in the corporate environment, which is really our bread-and-butter business.”

When asked about lawmakers’ efforts to regulate short-term rentals, she said, “It’s not just [about] the tax dollars. It’s also the regulatory environment around the Americans with Disabilities Act, around life safety standards. Those things are warm to the regulators’ heart as well. Well, again, we’ve not seen a large decrease in share, so I can’t actually say I’m seeing a big increase, but we’re saying the arguments that we’re making to regulators are gaining some headway. Because what we’re looking for as competitors is a level playing field. If you’re going to require that we comply with ADA and with life safety standards, which by the way we want to do anyway, but we expect our competitors to do that as well.”

Will Marriott and its peers thoughts on Airbnb change once Airbnb’s new Trips and Places product matures? That has yet to be seen.

Those Direct Booking Rates Could Become the New “Benchmark Rate”

Marriott, like its peers, has embarked on a direct booking campaign that involves discounted rates for loyalty members who book direct with Marriott. And while Paugh admitted those rates are slightly lower than traditional rack rates, they more than make up for that decrease in profits because of the increased loyalty engagement from consumers.

“The benefit is that more people are signing up for the loyalty programs and customers,” she said. “We’re getting closer to the customers, understanding their needs better, and we’re able to deliver better service. The downside is that, relative to rack rates, the room rates are about 30 basis points lower. The whole industry is moving in this direction, so at some point you got to wonder what the benchmark rate really is. Perhaps the rewards rate is the benchmark rate.”

Photo Credit: A guest room at the Renaissance Paris Republique. Parent company Marriott International is embarking on a massive integration process following the close of its Starwood purchase, and seeking the benefits of increased scale. Marriott International