Skift Take
Sometimes, being bigger really can be better. Or at least that's what Marriott is telling itself.
If Expedia and Priceline thought Marriott was tough the last time they met to negotiate rates, just wait until the next time they meet.
This was mentioned by Laura Paugh, Marriott International's senior vice president of investor relations, on Dec. 6 at the Barclays Eat, Sleep Play – It's Not All Discretionary conference in New York.
"One of the things we've discovered after the closing of the transaction was that the Marriott contracts for the OTAs [online travel agencies] were better than the Starwood contracts," she said. "When you think about it, we negotiated those contracts from a strength of 4,000 hotels and Starwood negotiated their contracts with the strength of a thousand hotels, and the difference was our contracts are already better and we haven't even renegotiated yet with the 6,000."
Paugh was describing some of the biggest benefits of Marriott's massive $13.3-billion acquisition of Starwood Hotels and Resorts, which closed on Sept. 23, nearly a year after the deal was first announced. With Starwood, Marriott became the world's largest hotel company with 30 different brands and more than 1.1 million rooms around the world.
What Paugh said about OTA contracts was just one of a few takeaways she gave at the annual conference for investors. Here are the rest:
Don't Expect Any Major Changes in the Loyalty Program Credit Cards Until Late 2017
Right after closing its purchase of Starwood, Marriott took the unprecedented step of immediately linking its two programs — Marriott Rewards and Ritz-Carlton Rewards — to Starwood Preferred Guest. But as Marriott executives have noted before, it's going to take much longer for Marriott to fully integrate all three programs, and their respective credit card programs.
"Marriott last year did about $120 million of branding fees associated with our credit cards," Paugh said. "Starwood did roughly $30 million or so associated with their credit cards, as you know, in 2015. Marri
