Predicting The Marriott – Starwood Brand Deadpool

Which Marriott and/or Starwood hotel brands deserve to survive or die? The losers will fall into the hotel brand deadpool.

Marriott International’s unexpected $12.2 billion acquisition of Starwood Hotel & Resorts Worldwide creates the world’s largest hotel group, representing over 30 individual hotel brands with over 1.1 million rooms. While industry insiders acknowlege the underlying objective for global hotel groups hotel is now to maximize room density in high demand destinstions, there is little doubt that some of the brands will not survive the integration process.

Given the asset-light strategies driving hotel group performance – much to the delight of Wall Street – brand differentiation is increasingly based on marketing-driven messaging and competitive positioning as opposed to tangible product attributes. As more properties become closely clusteed neighbors, clear lines of brand delineation can get hazy, with the hotel development teams not wanting to arbitrarily exclude a prime prospect as they assemble a jigsaw puzzle of properties and brands that changes every time a new brand is added to the portfolio.

The hotel groups occasionally make it even more difficult for their guests to understand the brand portfolio. Note the order in which each brand is listed in the deadpool form. This is the exact order used on the Marriott and Starwood websites, respectively. In Marriott’s case, they list the properties in descending order of hotel classiication (e.g. quality.) Starwood’s order is quazi-random – leading with Four Points, followed by Sheraton and Aloft. It’s clearly not alphabetical, or by size, founding date or quality level. While most corporate websites are heavily scrutinized in every detail, Starwood’s brand overview page failed to communicate how the collection of brands created a sum greater than their individual parts.

That may be part of the reason Starwood was put up for sale in the first place.

In many instances, the brand descriptions border on the nonsensical – especially for new lifestyle brands. Plied with industry buzzwords that fail to describe the types of customers that would be attracted to a property possessing any particular brand defining features. Some examples shall spread the pain by picking on everyone a bit…

What exactly should someone expect from Mariott’s Renaissance brand? “Travel should be inspiring, and inspiration is exactly what you’ll find at Renaissance Hotels worldwide.” In Schaumberg, Illinois, perhaps it’s inspiring that someone had the guts to build a suburban property with 474 rooms and nearly 150,000 square feet of meeting space. Aside from that, it’s a nice convention property that could just as easily fly a Marriott, Westin, Sheraton, Hilton or Hyatt flag.

Guests must enjoy staying in inspiring hotels, because Starwood also uses the ter to describe Westins. “Inspiring yet never overwhelming, Westin Hotels & Resorts are designed to engage the senses in a soothing atmosphere.” Soothing inspiration? I’m not certain I have ever heard anyone describe The Westin Bonaventure, Los Angeles’ largest hotel at 1,354 rooms, as soothing. John Portman’s five tower reflective-glass “city within a city” may indeed be inspiring (especially to mid-1970’s architecture aficionados) but not in any particularly soothing manner.

Hilton is just as guilty, as are all the others. (See Hotel Brand Explosion Difficult to Describe to get really depressed about the state of hotel brand positioning.) DoubleTree is described as “a place that’s a world apart from everything, yet with a feeling of the comforts of home. Full-service and full of warmth…” What the hell does that mean? The full description lets one know they are full service properties serving chocolate chip cookies. That may be enough for some people, but surely not many.

At this point, one can imagine TripAdvisor CEO Steve Kaufer silently thanking all the hotel groups for driving massive traffic to his websites, with many prospective guests leaving the hotel brand website, desperately trying to figure out exactly what the hotel is like before booking.

So, below is a listing of the 30 brands impacted by Marriott’s acquisition of Starwood. Now, it’s time to predict the brand deadpool.

Five options exist for each brand:

• Keep It
• Merge It (Survivor)
• Merge It (Casualty)
• Kill It
• Sell It

Selling a brand eliminates it from the hotel group portfolio, meaning it would fare better on its own or with a competitor. Killing a brand eliminates it entirely, and reallocates its member hotels across multiple brands within the portfolio. Keeping a brand does not change it, although properties from killed brands could be added. Merged Survivor brands are merged brands that retain their name and identity. Merged Casualties are the merged brands that lose their brand identities.

Have fun playing Marriott senior strategy executive – If you need a refresher on each brand, a complete list with full brand descriptions and number of properties follows the deadpool form.

Feel free to add comments and your name/email if you ultimately want me to vouch for your future boasts that you had it completely figured out from the beginning.

Unable to see the full Marriott-Starwood Hotel Brand Deadpool Form? This often applies to mobile devices – first, you miight want to try turning your handset to landscape orientation.) Still no luck? Please click this link: Play The Marriott-Starwood Hotel Brand Deadpool Game!

That probably wasn’t as easy as you thought, was it? So give Marriott some consideration when wondering why the brand integration process is taking so long.

In their Own Words

Below is a compilation of the descriptions for each brand from the hotel groups themselves – occasional grammatical and punctuation errors included.

Marriott International

The Ritz-Carlton – 100 properties
“An enduring symbol of sophistication, style and legendary service, The Ritz-Carlton creates exceptional luxury experiences at more than 80 hotel and resort locations around the globe. The memories created by the ladies and gentlemen of The Ritz-Carlton stay with you long after you leave.”

BVLGARI Hotel & Resorts – 3 properties
“This is the leading luxury hospitality collection in the world. It is comprised of a few select properties in major cosmopolitan cities and luxury resort destinations. Each location makes a strong reference to the local culture while retaining a distinctly Italian contemporary luxury feel.”

EDITION – 4 properties
“Ian Schrager’s refreshing collection of one-of-a-kind modern luxury hotels, created in collaboration with Marriott, is an evolutionary response to the desire for a sophisticated experience from the guest with a contemporary lifestyle. The Istanbul EDITION is the brand’s debut property, followed by the recent premiere of The London EDITION. Planned openings are also scheduled in gateway cities such as Miami Beach, New York, Abu Dhabi and several other cities.”

JW Marriott – 76 properties
“We can’t stop time. We can just make it seem like you have more of it. It’s not a trick, but rather, the result of our unique philosophy. We believe the best setting is the one that allows the extraordinary to emerge. Whether in a slowly swaying hammock or in rooms swathed in silk with gorgeous views of the Andaman Sea, we’ll ensure nothing comes between you and what you seek—whether clarity, inspiration or wellness.”

Autograph Collection Hotels – 93 properties
“You are not just a person. And we are not just hotels. We are a 15-room boutique fishing lodge in Colorado. And a 3,000-room luxury high-rise on the Vegas Strip. We’re not bound by similarities. We’re bound by distinction. We may share an Autograph. But everything else is different.”

Renaissance Hotels – 158 properties
“Travel should be inspiring, and inspiration is exactly what you’ll find at Renaissance Hotels worldwide. Select from historic hotels, chic boutiques or luxurious resorts. Discover the local scene with the help of on-site Navigators. Plus, enjoy active lobby lounges, bars and restaurants with RLife LIVE events.”

Marriott Hotels – 598 properties
“Today, Marriott Hotels celebrate the travelers of the world. Our mission is to host you brilliantly… to make your every event and stay with us unforgettable and effortless. From next gen meeting spaces to tech-enhanced guest service and beyond, we offer 500 locations worldwide to help you connect, relax and recharge — wherever it is your travels take you.”

Delta Hotels and Resorts – 37 properties
“One of North America’s leading four-star brands, Delta Hotels and Resorts offers precisely what you need in places you want to go, from gateway cities to spectacular resort destinations. Whether you’re traveling for business or play, comfortably familiar rooms, free Wi-Fi and convenient dining are always included.”

Marriott Executive Apartments – properties
“For global travelers on stays of weeks, months or more. Located in cosmopolitan city centers, Marriott Executive Apartments surround you with familiar comforts even when you’re far away. Studio to three-bedroom floor plans with luxury amenities like gourmet kitchens, dedicated work and living areas and trust in the Marriott name when you are far from home.”

Marriott Vacation Club – properties
“Family-friendly resorts designed specifically for unforgettable vacations. Spacious, condominium-style villas offer fully equipped kitchens, living/dining areas, separate bedrooms and all the comforts of home. Available for rental or as part of a vacation ownership program that provides deeded real estate ownership with flexible access to thousands of exciting vacation options including resorts, hotels, cruises, guided tours, experience packages and more.”

Gaylord Hotels – 5 properties
“Offering ‘everything in one place,’ each resort blends grand settings, luxurious rooms and world-class entertainment to delight you with a truly enchanting getaway. Gaylord Hotels can be found on the scenic banks of the Potomac in Washington, D.C.; in the lively Music City of Nashville; deep in the heart of Texas and in the family vacation oasis of Kissimmee, Florida.”

AC Hotels by Marriott – 82 properties
“This is an upper-moderate tier lifestyle hotel brand for the design conscious traveler. Each offers a convenient city location and a stylish, cosmopolitan feel. Urban in the best sense of the word, these hotels are ideal for both business and leisure travelers who want to really experience all the options of a city.”

Courtyard by Marriott – 1,020 properties
“Courtyard delivers options that are designed around the way you travel. Options that can help you have a successful trip at over 900 hotels worldwide. Like dining choices that meet your needs. Completely connected environments featuring free Wi-Fi (North and Central America only.) And local information on our GoBoard.”

Residence Inn by Marriott – 689 properties
“Designed to provide everything you need to thrive on long stays, the all-suite Residence Inn features upscale, spacious suites with full kitchens and room to eat, work and dream. Plus you can enjoy a complimentary hot breakfast, Wi-Fi, evening socials and grocery delivery service.”

SpringHill Suites by Marriott – 333 properties
“Discover an all-suite hotel offering stylish space and inspiring design, all at an affordable price. Connect, work or relax with free Wi-Fi and refreshing spaces that are open and bright. Meet and mingle in inviting lobbies and jump-start your day with a complimentary hot and healthy breakfast. Enjoy over 300 locations across North America. Style and space. Beautifully priced.”

Fairfield Inn & Suites by Marriott – 753 properties
“Over 700 locations across the US, Canada and Mexico offer everything you need for a comfortable and productive stay at a great value. Modern rooms and suites, ample workspaces, and friendly and responsive staff. LET’S GET IT DONE.”

TownePlace Suites by Marriott – 264 properties
“These suites are built for the extended stay traveler who appreciates independence and the space for a relaxed and productive stay. Guests have come to know us by our modern spacious suites with full kitchens, free Wi-Fi, free breakfast and friendly staff who deliver a warm “hello” when you walk through the door.”

Protea Hotels – 102 properties
“Protea Hotels spans the sub-Saharan with its collection of seaside resorts, city center hotels, private game lodges and mountain retreats. Whether in Cape Town or Johannesburg, each property offers a unique local experience, a welcoming room and expected amenities.”

Moxy Hotels – 1 properties
“Moxy is all the style and soul you’ll find at a boutique hotel, but way more affordable. Because if you have the guts to go out and explore the world – and we know you do – at least look good doing it. It’s just like home, but with a bartender.”

Starwood Hotels and Resorts Worldwide

Four Points by Sheraton – 204 properties
“Four Points by Sheraton Get everything you’re looking for with style and service you want, all at a great price. We have what matters most to you like stylish rooms, comfortable beds, delicious breakfast and fresh coffee. Plus you’ll find free Internet and free bottled water in your room, great local beer with Best Brews and other extras that you’ll love. Everything you need to travel the way you like.”

Sheraton Hotels & Resorts – 441 properties
“Sheraton welcomes guests across the globe. From city center locations to relaxing resorts, Sheraton Hotels & Resorts are the perfect platform from which to explore, create and experience the possibilities of travel.”

Aloft – 100 properties
“A new destination sensation. A world that’s lively, not lonely. Aloft delivers a fresh, fun and fulfilling reinvention of the travel experience.”

W Hotels – 46 properties
“Well, hello there. Experience the perfect balance of both style and soul with W Hotels. While you’re with us you’ll delight in signature restaurants, iconic design, select spa treatment with Bliss , our exclusive Whatever/Whenever service and more. W Hotels is the place to eat, drink, flirt and play all within one prime location.”

Le Méridien – 102 properties
“Embark on a voyage of discovery and enrichment with Le Méridien. Authentic locations and inspiring cultures create the backdrop to an exclusive selection of hotels and resorts across the globe.”

The Luxury Collection – 100 properties
“All hotels within The Luxury Collection®, some centuries old, are recognized as being among the world’s finest. In renowned cities and resort destinations, The Luxury Collection provides an exceptional experience.”

element – 19 properties
“A renewing haven for the road-weary traveler, element transforms the extended stay experience by providing guests with a space to live their lives as they wish, at their own pace.”

Westin Hotels & Resorts – 204 properties
“Inspiring yet never overwhelming, Westin Hotels & Resorts are designed to engage the senses in a soothing atmosphere. Recharge in energizing cities and refresh at resorts worldwide.”

St. Regis Hotels & Resorts – 35 properties
“An impeccable staff, offering flawless and discreet service, ensures an extraordinary stay at St. Regis Hotels & Resorts. From New York to Beijing, each St. Regis captures the distinctive personality of its location.”

Tribute Portfolio – 2 properties
“There’s a power in independence. Tribute Portfolio gives you access to exceptional independent hotels around the world with all of the rewards of Starwood Preferred Guest. From boutique resorts to exciting hotels in choice urban locations, each Tribute Portfolio hotel offers inspired style and superior service. It’s our celebration of individuality.”

Design Hotels – 5 of 287 total properties
“Design Hotels enables you to discover thought-provoking design, cultural authenticity and a community of likeminded travelers who embrace creativity and genuine hospitality around the globe.”

It should be noted that Design Hotels is a marketing relationship, with only few properties currently participating in SPG. Prior to the merger announcement, it was projectd that 40 Design Hotels would be working with SPG in 2016.

Starwood has a similar relationship with sixteen Caesar’s Entertainment casinos is Las Vegas, Lake Tahoe, Reno, New Orleans and Atlantic City. Given that Marriott has The Cosmopolitan, Las Vegas as a member of its Autograph Collection, there may be some announcements forthcoming.

Rewarding Loyalty or Math Skills?

Perhaps most importantly, the merger will enable Marriott to strategize how the next generation of the Marriott Rewards program should perform from both a hotelier and consumer perspective. With competitors baiting both SPG and Rewards members with offers recognizing their current program tiers, Marriott does not want to do anything to jeopardize the patronage of the 54 million Rewards and 21 million SPG members. Although those figures include duplicated and inactive accounts, there certainly tens of millions of high value hotel guest relationships at stake.

One issue that most hoteliers fail to acknowledge is that the point/reward programs have very little to do with true loyalty – these are largely transactional relationships. True loyalty is best expressed by consumers willing to spend more than necessary because of a strong emotional connection with the brand. Think Apple, Disney, Starbucks, Whole Foods. For most hotel groups, that unique dynamic is missing.

The vast majority of frequent guest points are accumulated from stays that are paid by a third party – normally an employer. Frequent guests, especially the serious road warriors, make a conscious strategic decision to prioritize stays with programs that offer the greatest personal benefit. Many frequent guests consider themselves locked into favored programs, but changes create opportunities for disruption. Those changes spawn a comparison of program benefits – not generally considered a good thing for the incumbent program.

Hotel loyalty program comparisons are much more nuanced than airline program evaluations. The jury is decidedly out on which group offers the best program. Point accrual and redemption rates vary wildly, as well as the composition of the brand portfolios.

J.D. Power’s 2015 Hotel Loyalty/Rewards Program Satisfaction Report rates Marriott Rewards 717 score slightly above average and Starwood Preferred Guest’s 661, near the bottom of its industry comparison. Both were ranked behind Hilton HHonors’ 727 score, tied with Delta (now a Marriott brand) as the top ranked programs in the report.

Ideaworks evaluated the programs using a sampling methodology to calculate the relative values of points and their redeemed values. The resulting payback analysis concluded Marriott produced 9.4% in value for every $100 spent, as opposed to Starwood’s 6.1%. Hilton HHonors came in at 8.9%.

A third group, Wanderbat, uses an expanded multivariate approach, including hotel ratings and lifetime membership to user ratings and point values, to arrive at it’s Smart Rating. SPG ranks first, with a Smart Rating of 100, largely due to the comparative superiority of its average product rating (as Starwood lacks lower tier brands.) Marriott Rewards tied with Hilton HHonors with a score of 88.

According to Wanderbat, Marriott Rewards members need to spend an average $2,167 to earn a free night, as opposed to $6,972 for a SPG member. However, if that higher spend allows for a booking at a W compared to a Fairfield Inn, one sees why an empirical comparison becomes so difficult.

A Simple Merger? Never.

That is only on the demand side – which might wind up being easier to manage than the issues facing the supply side of the programs. In major destinations like New York City, where Marriott would want to optimize its market coverage, Marriott already has 65 properties and Starwood 28 (including hotels in the pipeline) if the three area airports represent regional boundaries. As a point of reference, Hilton only has seven properties in the area.

These three maps offer a vivid example of the complexities involving a large number of properties and the potential for brand overlap in a very important strategic market.

Marriott International – New York City Hotel Portfolio

Starwood Hotels & Resorts – New York City Hotel Portfolio

Hilton Worldwide – New York City Hotel Portfolio

If the sheer numbers and myriad owners were not daunting enough, within Marriott Rewards, anomalies already exist. Ritz-Carlton is the exclusive luxury partner of Marriott Rewards. That means Marriott’s new Bvlgari brand is currently barred from participating in the program. One may assume those terms would also apply to St. Regis. While there are only three Bvlgari properties worldwide, St. Regis has over 30 properties – many of which would be highly desirable additions to Marriott’s luxury portfolio.

With two Ritz-Carltons in New York City and one St. Regis, which lies only six blocks from one of the Ritz’s, Marriott could conceivably be forced to decide between the unattractive alternatives of making St. Regis ineligible for Marriott Rewards, or discarding the property. Having two Ritz-Carltons in such close proximity is highly unlikely. Might Marriott be so bold as to sack the 259-room Ritz-Carlton Central Park and reflag the 229 room St. Regis as a Ritz-Carton? Also doubtful, considering the top twelve floors of the current Ritz-Carlton house eleven massive condominiums; that’s a tough sell to the condo owners. Odds are Marriott will try to work out some sort of arrangement where both properties may be retained, ideally with the ability to add a Bvlgari property as well, if the opportunity arises.

Interesting property/market-specific discussions like these are undoubtedly already beginning to take place. Assume other hotel developemnt teams are already engaging in discussions with both Marriott and Starwood property owners as well – sewing fear that any contractual concessions benefiting the greater good are grounds for claiming breach of contract.

A major question for SPG members in particular, is how fast will the frequent guest programs be merged? They should not hold their breath for a quick announcement. Marriott acquired the 100+ property Protea brand in Africa two years ago, and it is still not yet integrated into Marriott Rewards. Delta Hotels was acquired 11 months ago and is also in the Rewards implementation queue.

Potentially slowing everything down will be how the Starwood American Express and Marriott Chase MasterCard/Visa card programs will be worked out. Starwood renewed its agreement with AmEx within the past year, but expectations are that the larger Chase/Marriott relationship will ultimately triumph, with the SPG AmEx relationship being sunset at some point.

Dealing with that many people, properties, points and major credit card relationships is not to be taken lightly. Expect Marriott to create a plan and execute it on their own timeline – resisting the impatient protestations of Wall Street, owners and guests to move quickly. In many ways, it is easier for Marriott to run the companies separately than the ordeal they will face when they are eventually combined.

Marrwood is not a Thing

A few individuals have had some fun calling the new entity Marrwood, but to be clear, this is not a pairing of equals. Starwood is on the business end of an acquisition; the same way a wounded water buffalo is on the receiving end of an acquisition by a lion. When the dust settles, there may be some scattered bones and fur left over, but nothing that could be easily recognized as its original form.

Marriott will eventually devour Starwood in a similar manner. Anything that may be difficult to digest will get discarded, but all the delicious parts will be savored and completely ingested.

As a senior executive at a major global hotel group told me prior to the announcement, they had not perceived Starwood as a viable competitor for well over 18 months. While many, if not most, former Starwood brands will survive, the parent will be mercifully euthanized. Somewhat ironically, the organization itself created largely through acquisitions (Westin – 1994; Sheraton, Four Points & The Luxury Collection – 1998, Le Méridien – 2005) will ultimately be unwound through an acquisition.

Regardless of the outcome, its going to be fun – except for those brands and properties finding themselves in the deadpool…