Revealed: “#1 hospitality partner for Expo 2020”

September 25, 2016 2:45 pm

Signage for the New York Marriott Marquis is seen in Manhattan, New York. (Image: Reuters)

American multinational hospitality group Marriott International has completed a $13 billion acquisition of Starwood Hotels & Resorts Worldwide on Friday, making it the largest hotel chain in the world.

Marriott operates internationally recognised hotel brands such as The Ritz-Carlton, St. Regis, Bvlgari Hotels and W Hotels. Meanwhile, Starwood offered a popular range of properties, including Sheraton, Westin and Le Meridien.

Now, all of Starwood’s brands have been added to those of Marriott International. In total, 30 hotel brands now fall under the combined umbrella, comprising 5,700 properties and roughly 1.1 million rooms in more than 110 countries worldwide, eclipsing other major hospitality giants like InterContinental Hotels Group and Hilton Worldwide.

“The marriage of these two leading hotel companies means Marriott will deliver an unparalleled guest experience with more hotels in more global destinations, an unrivalled range of comprehensive accommodations to suit every traveller and the industry’s best loyalty programmes,” said Arne Sorenson, president and CEO of Marriott International, in a statement announcing the acquisition.

“Providing such a wide selection reinforces our enduring commitment to offering guests an even greater world to explore with Marriott at their side,” he added.

The outcome of the deal, the largest in the history of hospitality, will have noticeable impacts globally and in the Middle East and North Africa region, as most of the hotels brands that are operated by both Marriott International and Starwood have a presence here.

Today, there are “350,000 rooms under construction and, by 2020, we’ll be at approximately 1.5m rooms globally,” Alex Kyriakidis, president and managing director – Middle East & Africa for Marriott International, said at a press conference in Dubai on Sunday.

“We are going into an era where we are, by far and away, the largest operator in Middle East and Africa. Today we have 52,000 operating rooms in 30 countries in the Middle East and Africa. Our pipeline will take us, in the next three years, to 90,000 operating rooms in 38 countries [in the region,” Kyriakidis said, in comments about the impact of the acquisition on the group position in the MEA region.

In the MEA region, the UAE will be Marriott International’s largest market by 2020, as it will be home to 80 properties and some 23,300 rooms, according to Marriott International forecasts.

“When you have that kind of muscle, you can look at maximising your partnership with the tour operators and travel agents out there and our other partners. We can look at our existing relationships and agreements with booking.com and the Expedias of this world and, because of the scale and muscle we now have, make sure we’re getting the best win-win outcome we can for ourselves and the owners and partners,” Kyriakidis said.

Within the UAE, of the 80 hotels, Dubai will have 58 properties and 17,000 rooms. “This makes us the number one hospitality partner for Expo 2020,” Kyriakidis explained, noting that there are many detailed initiatives Marriott International has set in place in partnering with Dubai for the Expo 2020.

Marriot’s top five markets in the region, after the UAE, are Saudi Arabia – which will have 53 hotels by 2020, followed by South Africa, Egypt and then Qatar.

“These five markets will account for 70 per cent of our rooms in the MEA region,” Kyriakidis said.

With the figures, Marriott International claims it will be “by far the largest operator in the Middle East and Africa. At 89,000 rooms by 2020, we are 33 per cent ahead of the next-largest operator,” said Kyriakidis, who did not mention who the second-largest hotel operator for the region was.

“The journey has just begun and we’ve only come together last Friday. Before that, we were two separate companies competing in the marketplace, but now we’re able to sit down together, look at how we do business and, together, begin to tackle some of the opportunities – which will take a little bit of time to achieve,” the executive said.

He noted that, so far, no previously planned Starwood properties will be cancelled.

“The way we do our management and franchise agreements is remarkably consistent. These generally provide the owner or franchisee with a restriction, which we call an ‘area of exclusivity’ or a ‘territorial restriction’ that is geography-led. Occasionally, an agreement might have what we call a ‘poison pill’ [i.e., when an acquisition takes place, the holder of that acquisition has the option to cancel a hotel because another property of the same group is in proximity].”

“At this juncture, we’re not aware of such instances, but we’re just starting detailed work and if there is [such an incident], it would not be very significant,” Kyriakidis told AMEinfo.

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AMEinfo Staff
By AMEinfo Staff
AMEinfo staff members report business news and views from across the Middle East and North Africa region, and analyse global events impacting the region today.

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