2019 will be the real year of Marriott-Starwood
2019 will be the real year of Marriott-Starwood
12 APRIL 2019 7:22 AM

As we approach the three-year anniversary of Marriott International’s purchase of Starwood Hotels & Resorts Worldwide, the hotel industry will now be better-equipped to judge just how successful that megadeal has been.

There’s a commonly held thought in the world of professional football that you can’t properly evaluate the success or failure of a draft for three full years (not that that has ever stopped the sports talking heads from doing just that within minutes).

The idea is a simple one: It takes time for players to mature and acclimate to the professional football environment and learn the various schemes and strategies of their individual teams.

I think the same logic holds for Marriott International’s $13.3-billion purchase of Starwood Hotels & Resorts Worldwide.

That deal closed in September 2016, meaning 2019 will mark the third anniversary, and there are several significant moving pieces that have now fallen into place indicating the company (and at least theoretically its affiliated owners) should be realizing the full benefits initially promised. These include:

When Marriott executives initially announced the deal, even before Anbang Insurance Group came in to needle them and drive up the price, they were saying the power of that combined loyalty platform would be monumental in capturing more return guests and the scale of the combined company would provide an important counterbalance in negotiations to drive down OTA commissions.

Marriott and Expedia haven’t officially announced what their new commission structure is, although I’d be genuinely shocked if it didn’t go down at least marginally.

Those things are no longer future promised benefits they can point to as reasons for potential optimism. They’re now tangible results of the deal that have to yield superior benefits in terms of revenue and profitability.

I’ll be interested to see if the talk at this year’s NYU Conference is more oriented to the typical “Are we reaching the end of the cycle”-type discussion or if there will be a pivot to discussing whether the Marriott-Starwood megadeal was in the end worth the price of admission.

It’s fair to note that the post-merger company still probably isn’t running at full capacity, as integration-related issues have caused stumbling blocks for the fledgling Bonvoy program (as the #Bonvoyed crowd are eager to shout from the rooftops), for on-property sales and marketing efforts and in uncovering the largest data breach in the history of the hotel industry.

While that might seem like a laundry list of reasons for pessimism, the silver lining there is that addressing all of those things will only give the company more room for growth.

And even with that all that said, if Mel Kiper and Todd McShay were handing out grades on transactions in the hotel industry, they’d still probably give this one an A. Marriott was already the biggest company in the industry when they made the deal, but it’s clear nearly three years out that they’ve truly cemented their spot as the company that sets the tone and pace for everyone else.

There’s a reason Arne Sorenson is CEO of the year and Marriott is celebrating its 7,000th (!!) open property.

Have an opinion on how successful the Marriott-Starwood deal has been? Let me know via email or on Twitter.

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