More changes likely in hotel market

Large companies watching Marriott-Starwood deal
Shareholders are likely to approve today a merger between Marriott International and Starwood Hotels & Resorts Worldwide, and there could be more consolidation to come in such as fragmented market.
Although a combined Marriott and Starwood would be the world’s biggest hotel company, it would still only control 15% of hotel rooms in the US, for example. So speculation is rife that other big players such as Hilton, Hyatt, Carlson and InterContinental Hotels Group could also create tie-ups.
Starwood’s chief executive, Tom Mangas, says it is only the beginning for industry mergers.
“Clearly the Marriott-Starwood transaction has created a lot of chatter about further consolidation,” he said in a conference call with analysts.
Mergers are good for such large companies as they drive cost savings and revenue growth while pushing up synergies from areas like cross-selling.
“Competitors will observe and see how it goes and decide how critical it is for them to play,” Mangas said. “To the extent that we execute well, I think they’ll feel increased pressure for consolidation in what’s an extremely fragmented market worldwide.”
Skift / BBC


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