Posted Jan 21
Consider This: Marriott's Acquisition of Starwood
In November of 2015, Marriott announced its acquisition of Starwood Hotels - a move that creates the world's largest hotel company. Marriott, which is known for its stable of hotels catering to business travelers, appears to be buying its way into access of Starwood's suite of lifestyle focused - and higher spending - consumers. Not surprisingly, Marriott's plan creates some change in the hotel industry, but it also impacts some ancillary ones that could be used to help craft your stories in the boardroom. A few considerations about the impacts of this acquisition:
- The Hotel Industry :: As the world's largest hotel company, Marriott will now have the ability to use its 5,500 properties to drive efficiencies across a number of business segments. Any savings could potentially be used to upgrade hotels, market to highly-profitable consumers, and otherwise allow for growth pilots. In your interviews, you could discuss how the acquisition might spur additional consolidation in the industry as competitors look to buffer themselves against what will likely be an aggressive move by Marriott to use the attention of the merger to steal share.
- The Credit Card Industry :: Loyalty credit cards are among the most highly lucrative products for card issues like JPMorgan and American Express. And, the Marriott merger probably causes significant anxiety for AmEx - it puts the company's Starwood co-branded card at risk. In your interview, use news about recent acquisitions (in this case hotels) to discuss the impact of the move in an ancillary market (credit cards) and, more importantly, to show that you would bring a strategic perspective to connect the dots across industries if offered the opportunity.
- The Loyal Traveler :: Both Marriott and Starwood have loyalty programs that allow frequent travelers to accumulate points for hotel stays - and airline tickets, and concert tickets, and a bunch of other stuff. Starwood's program -the SPG Program - has often been held as the gold-standard for hotel loyalty programs given how rich its benefits have typically been. Thinking strategically, Marriott's acquisition gives it an opportunity to win or lose Starwood's most loyal - and most profitable - consumers. In your interviews you could highlight the importance of thinking through the impact business decisions have on the people who actually use the products or services your company offers. And, more interestingly, talk a little bit about what you see as the risks and opportunities of the deal from the consumer lens.
In full transparency, our team is made up of Starwood evangelists. We'll be watching this move carefully - if only to serve our selfish interests. Sleep tight!