NEW YORK — Barry Sternlicht, founder and former CEO of Starwood Hotels & Resorts and current CEO of Starwood Capital (operator of 1 Hotels and Baccarat Hotels & Resorts), gave his analysis of why Marriott International is acquiring Starwood Hotels: “[Marriott CEO] Arne [Sorenson] believes the best offense against Expedia and Airbnb is scale.”

Speaking at an Afar magazine “Conversations” event here at the recently opened Marmara Hotel, Sternlicht said he expects to see more consolidation among hotel companies, and suggested that hoteliers’ perception of OTAs as a significant threat has not diminished over time. “ has been a disaster for the hotel industry,” he said.

He recounted his efforts to organize hotel companies in a joint booking site similar to Orbitz, but said it failed, in part, because “Bill Marriott didn't believe in the Internet. He didn't believe it would hurt us.” (Starwood, Marriott, Hilton and InterContinental Hotels Group joined forces with Priceline and Pegasus Solutions to launch Travelweb in 2003. It was subsequently taken over by Priceline. Priceline and are both part of the Priceline Group.)

Citing airlines’ success in disintermediating OTAs and travel agents, he said that in hospitality, “You would think the intermediary would go away. But Expedia made 22% [commission] at the peak.”

It began, he said, because hotels could fill rooms during the week with business travelers but “they were bringing us weekends.”

Sternlicht both revisited key moments in Starwood Hotels & Resorts history and commented on trends driving his current strategy for Baccarat and 1 Hotels.

He had zeroed in on bedding relatively quickly, he said. He recalled asking his team to bring him a sample of every pillow a competitor used, and also to find out the cost of each. “Four Seasons was spending $23 per pillow. Marriott was paying $7. Here I was, spending $70,000 per key, and I’m going to skimp on the pillow?” For just a small incremental cost, he said, miming a guest putting his head on a pillow, “you can’t get closer to a customer than this.”

He also revealed that the “Heavenly Bed” was already in use at W Hotels before Westin. “We didn’t brand it — we wanted something to bring Westin up.”

Groupe de Louvre, a French conglomerate that he bought in 2005, owned luxury hotels (including Paris’ Le Crillon) and the crystal company Baccarat. Sternlicht saw Baccarat as a great match for a luxury hotel brand. The first Baccarat opened in Manhattan last year, reportedly at the highest cost-per-room construction of any hotel in the world.

Recounting his experiences with the crystal company, he joked about France’s reputation for labor difficulties. “Anyone who succeeds in business in France deserves a Medal of Honor,” he said. “We can't fire anyone and we can't motivate people."

But he likes the luxury hotel space, he said, because “the uber-wealthy will travel any time. Reducing prices won't induce them to travel. And they don’t care about points. They just want to feel at home.”

When asked about the importance of social media to his businesses, he acknowledged it will be “critical." He said that if social media isn't used well, "we’re in danger of losing a generation."

He’s not so sure, however, that it’s worth putting much effort behind a social campaign for Baccarat. “We want Justin Bieber [as a guest]," he said. “But only about 12 of his 54 million followers can actually afford to stay there.”

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