Appealing to hotel loyalty members is all about strength in
numbers, while catering to travel agents is all about one-on-one relationships.
So, while Marriott International spent the better part of 10
months courting, bidding for and ultimately buying Starwood Hotels &
Resorts, the real work is just beginning.
With more than 5,700 hotels totaling about 1.1 million rooms
in over 110 countries, Marriott last week began efforts to assure Starwood’s
SPG loyalty members that the benefits of having an additional 18 brands to
choose from will outweigh concerns over the service level offered by what is
now by far the world’s largest hotel company.
Meanwhile, questions remain about how Marriott will court
travel agents who have long maintained relationships with higher-end Starwood
brands such as W, St. Regis and Westin.
Marriott, which announced the completion of the $13 billion
acquisition on Sept. 23, appeared to get to work immediately to lay out how SPG
would co-exist with Marriott Rewards.
On the day of the announcement, Marriott began allowing
Marriott Rewards and SPG members to start transferring points between accounts,
with three Marriott Rewards points equaling one SPG Starpoint. Marriott also
matched member status levels between the two programs.
Still, Marriott might need until 2018 to merge the programs.
“We’ve got different rules in the two programs that need to
be dealt with,” Marriott CEO Arne Sorenson said in an interview with Travel
Weekly. “We’ve got different credit card companies, we’ve got different
timeshare companies and we’ve got different technology platforms. All of that
has got to get addressed in what’s likely to be a many-months-long process,
maybe a few years.”
What could be even dicier is Marriott’s courting of travel
agents who regularly book with Starwood. In addition to going up against Starwood’s
agent-friendly reputation, Marriott’s marketing efforts during the past year,
which have been geared to sway potential guests away from OTAs and toward
direct-booking channels, has some agents believing that they’ve been
“I’m very nervous that Marriott will promote booking
direct,” said Susan Reder, manager-partner at Los Angeles-based Frosch, a
member of the Signature Travel Network. “They have not been historically
Additionally, the sheer size of the combined company could
dull relationships the hotel company’s salespeople have with agents, said Jack
Ezon, president of New York-based Ovation Vacations, a member of Virtuoso.
“Something could fall through the cracks,” Ezon said. “If
they do it wrong and they cluster hotels that serve completely different
markets, they’re going to do themselves a big disservice.”
Working to Marriott’s advantage with SPG members is the
sheer breadth of the expanded company. Starwood’s frequent guests more than doubled
their brand access to 30 from 12 while gaining a flurry of select-service hotel
brands such as Marriott’s Residence Inn and Courtyard where they can gain
points during business travel.
In fact, Marriott Rewards in recent years has consistently
outranked SPG in J.D. Power’s annual survey of North American hotel loyalty
program satisfaction. Out of 14 programs, Marriott ranked second, behind Hilton
Worldwide’s HHonors program, while SPG ranked 13th.
Rick Garlick, global travel and hospitality practice lead at
J.D. Power, said, “The Starwood program really applies to frequent travelers
who have elite status, which is a little more difficult to achieve, but once
you do, it’s a great program. Marriott has done so well because of the wide
distribution network. Guests say, ‘I can stay at a Fairfield Inn, save up
points and eventually stay at a Ritz-Carlton.”
The influx of Starwood brands may be seen as redundant for
some Marriott Rewards members because Starwood brands Sheraton, Westin and Le
Meridien join Marriott and Renaissance in the upper-upscale category. Still,
Starwood appears to have a larger luxury presence in China and the Middle East,
further benefiting Marriott Rewards members.
Whatever investment Marriott makes to welcome SPG members
and ultimately merge their program with Marriott Rewards will likely be worth
it because it will likely complement Marriott’s effort to pull bookings away
from OTAs, Garlick said.
“Keep in mind how important loyalty programs are in the
fight for direct booking,” he said.
As for agent relationships, Marriott has implied that at
least in the luxury sector, it remains business as usual.
“There is no change to our sales team, and we are still
dedicated to our existing customers and hotel brands,” Ritz-Carlton wrote in a
letter Sept. 26 to members of its Inner Circle group of travel agents. “The
same is true from the Starwood side for the immediate future.”
And, Ezon said, it would be smart to keep it that way.
“Marriott has been successful at bifurcating Ritz-Carlton,
which has a great relationship with agencies,” Ezon said. “If they’re able to
do it with Ritz-Carlton, hopefully they can continue that with Starwood.”
That point is not lost on Sorenson, who acknowledged the
concerns of agents who in the past have preferred dealing with Starwood rather
“We certainly intend to earn the loyalty of
those who think Starwood has been better [at cultivating travel-agency
relationships],” Sorenson said last week. “The last thing we want to do is
cause our travel-agent partners to move someplace else.”