UAE to become Marriott’s largest MENA market after Starwood deal

The UAE will be newly enlarged Marriott International’s largest MENA market by 2020 following the merger with Starwood Hotels & Resorts.

Speaking at a conference in the JW Marriott Marquis Hotel Dubai, Alex Kyriakidis, president, Marriott International Middle East and Africa, said its combined portfolio of 52 hotels will grow to 80 with 23,300 rooms within the next four years.

“We will be the number one hospitality operator for Expo 2020 and that’s a huge opportunity for us and DTCM and their stakeholders,” he said.

The deal, ratified on Friday after a protracted buying process following counter bids from China’s Anbang Insurance Group, creates the largest hotel operator globally with 1.1 million rooms across 5,700 properties. Kyriakidis said the merger had cost $140m but provides synergies at an annual rate of $250m.

The tricky integration of the two loyalty programmes is likely to take two years but Marriott Rewards, Ritz-Carlton Rewards and Starwood SPG can now earn-and-burn points and have the ability to status match.

Together they now comprise 85 million members and Marriott is offering Starwood SPG members the chance to transfer points at a rate of three Marriott Rewards points for one SPG Starpoint until one loyalty programme is created.

Around 160,000 Marriott Rewards and Starwood SPG members have linked their accounts – enabling earn-and-burn opportunities across 30 brands – and 500 million points have been traded across both portfolios.

Analysis

For years, I’ve seen Guido De Wilde at numerable Starwood functions – but today he handed me a pristine gold-coloured Marriott business card.

So when Kyriakidis talked about starting out on a new journey, it is accurate. Together with De Wilde, who is appointed Chief Operating Officer Middle East, management executives will be learning plenty about each other’s corporate cultures and ways of working.

Some may wonder why relatively little has happened since the deal was hatched last November, but the two companies were unable to share information until this weekend and Kyriakidis acknowledged it’s been “a long and winding road”.

Now emails can ping back and forth and business strategies devised and information shared, even if there is plenty of tech work ahead to integrate the two operators’ platforms.

The commercial analysis will focus on the 30 brands. Officially, all are being retained but there will now be greater scrutiny of those operating in the luxury, premium and select service spheres, and a “detailed pipeline review” will be undertaken.

Kyriakidis said existing management contracts “cannot be changed, nor will they be”, while conceding it’s often down to owners which name they put over their doors.

The Marriott-Starwood union has been described as “the executor meets the innovator” and it will be interesting to see how the two different corporate cultures get on now that the hard work of integration starts.