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Marriott to link its Rewards loyalty programme to Starwood’s Preferred Guest

Marriott International, operator of the world’s largest hotel group after its US$13 billion takeover of Starwood Hotels Resorts Worldwide Inc, said it will give reciprocal benefits to the 85 million members of each other’s loyalty programmes.

The combined company, operating more than 1.1 million rooms under 30 brands in over 110 countries, will link Marriott Rewards and Starwood Preferred Guest programmes, said Craig S. Smith, president and managing director of Marriott International in Asia-Pacific, at a press conference in Hong Kong.

“Consumers want much more diversity, they want unique experiences,” Smith said. “Having 30 brands allows us to do that.”

Marriott is looking to expand in the Asia-Pacific region, where Smith hopes growth will double in the next four to five years.

In China, Marriott is now the largest hotel operator, with 4.1 per cent of the market, according to research firm Euromonitor International.

“Our second largest source market globally is China, and I’m fairly sure that in a few years, it’ll be number one,” Smith said. While Hong Kong has seen “a little bit of a softening,” Smith believes the city is still a strong market.

Marriott has worked over the years to win over Chinese customers, including a “Li Yu” programme in 2012 that connects individuals to Mandarin-speaking servers and via popular Chinese messaging app WeChat.

The hotel offered customers the option last year to pay via Alipay, an online payment platform by Alibaba Group, which owns the South China Morning Post. Alipay is available in about 90 per cent of Marriott hotels in China, according to Marriott’s Asia-Pacific chief sales and marketing officer Peggy Fang Roe.

“Chinese travellers want the international brand, but they also want localised experience,” she said.

While consultancy company CWT Solutions Group said the merger could bring prices up in certain markets, calling it a “game changer” for the industry, Marriott does not see prices changing in the Asia-Pacific.

“We can leverage our channels, but I don’t see that there’s a direct opportunity in pricing,” Marriott’s chief financial officer Ken Rehmann said.

One way Marriott can leverage itself is with online travel agencies such as Ctrip, Alitrip, Booking.com, and Expedia.

Last year, these agencies year captured about 15 per cent of total room nights in the US, where hotel spending reached almost $150 billion, according to hotel data platform Kalibri Labs.

“Our first priority is to be on the shelf where are customers want to buy,” Roe said. “Our goal is to keep a balanced relationship” with these providers, she said.

Marriott beat China’s Anbang Insurance Group Co in a bidding battle last year for Starwood, adding The Ritz-Carlton, St Regis, W Hotels to its portfolio of hotel brands. While no decisions have been made about brand consolidation or integration between Marriott and Starwood, Asia will likely see more brands, Roe said.