BT: The news of the Starwood acquisition came as something of a surprise. What is the timeline for the deal and when might customers notice changes?
SORENSEN: The transaction will form an even stronger, more efficient global company to compete in the rapidly evolving global travel industry. It combines Starwood’s leading lifestyle brands and international footprint with Marriott’s strong presence in luxury and resort, convention, and select service segments.
Following the merger, which we would expect to close by mid-year 2016 – assuming no delay in receiving regulatory approvals – Marriott International, Inc., will operate or franchise more than 5,500 properties with 1.1 million rooms open worldwide and more than 370,000 rooms in the development pipeline. Our integration plan will develop as we approach closing but at this point it’s simply too early to provide details.
BT: How will the move affect customers of Marriott Rewards and Starwood Preferred Guest programs?
SORENSEN: The SPG program was one of the most attractive aspects of our acquisition of Starwood. Devaluing points or member benefits is not the way to preserve and strengthen these programs. We will create an opportunity for travel thought leaders and members to provide input to help us to deliver the most rewarding experiences. We plan to take the best of both loyalty programs to build a better, combined program …and then some.
BT: One of the most popular Marriott brands is the extended stay Residence Inn. Starwood does not have anything quite like it – is this a space where you’re looking for a lot of synergies?
MAYER: Residence Inn is the juggernaut in the extended stay hotel space and is popular with both guests and hoteliers. For hotel owners, it has the highest profit margins of any of Marriott’s family of brands.
BT: Recently Marriott opened the 700th and largest hotel in the Residence Inn portfolio located in a historic building in Chicago’s financial district. Is this new property giving us a glance at where the brand is going in the future?
MAYER: This hotel is a bit unique because of its size and location. The building dates back to 1915 and offers unusual features for a Residence Inn, including a full-service restaurant and modern bar and lounge open to the public. From day one, it has proven a marked success. However, large-scale Residence Inn properties are an exception to the rule for the brand, not the norm.
BT: This property opened with 60 percent occupancy in the first month, rare for a new hotel. Does that speak more to the brand or to the destination?
MAYER: Chicago is a dense market, and just one mile can make a difference. We feel that this full-service operation suits the needs of the city’s long-stay clientele. This brand makes sense in a lot of markets around the world, but Chicago is especially unique in that it welcomes a mix of business and leisure travelers.
BT: Residence Inn has big growth plans for international markets. Are people familiar with the brand overseas?
MAYER: It is not as well-known overseas as in the domestic market, which means we have to educate consumers on our product offering.
BT: What regions are of particular interest?
MAYER: The global future of Residence Inn is going to be very interesting because it is a brand that makes sense in a lot of markets. We see strong growth prospects in the Middle East and Africa where extended stay options are limited. Hotels already exist in Bahrain, Munich and Edinburgh with plans for a strong pipeline in the coming years.