Starwood & IHG Reportedly in Early Talks to Form World’s Largest Hotel Group
Erica Berardi July 30, 2015
After opening its doors to sale earlier this year, fresh rumors suggest Starwood is in early talks with IHG.
Rumors that Starwood Hotels & Resorts Worldwide is considering sale have been swirling since April 29, when Chairman of the Board Bruce W. Duncan announced the company was exploring “strategic and financial alternatives” to increase shareholder value and “no option is off the table.” On Thursday, The Financial Times reported Starwood is in early-stage talks with InterContinental Hotels Group.
According to sources “familiar” with the talks, the two hoteliers are informally discussing a tentative union, which, if realized, would form the world’s largest hotel group. Starwood is also reportedly courting Wyndham Worldwide.
Starwood told FlyerTalk it does not comment on market rumors.
In an email statement, an IHG spokesperson told FlyerTalk: “Following recent market speculation, the Board of Directors of IHG states that it is not in talks with Starwood with a view to a combination of the businesses.”
Starwood, headquartered in Stamford, Conn., owns and operates 1,200 properties in 100 countries with 180,000 employees. The company’s brands include St. Regis, The Luxury Collection, W, Westin, Le Méridien, Sheraton, Four Points by Sheraton, Aloft, Element and Tribute Portfolio.
[Photo: Starwood]
You’re Reading
Most of the IHG high end properties are out side of the US and Starwood would give them a much stronger portfolio in north america. I'm sure they get decent business travel in the US through Holiday Inn but adding Westin and W should improve it.
Must strenuously disagree with sdsearch above. Holiday Inn is about as about as midscale if and budget as you can get and they are, by far, the biggest part of the IHG portfolio. All in all, the overlap is very minimal and in many ways complementary. For example, Sheraton and Intercontinental may be considered "on the same level" but I don't and don't know anyone who cross-shops between those two brands. I think a merger between IHG and Starwood would be a very good match.
Wyndham Worldwide would be seem to be a much better fit. Wyndham Worldwide has largely budget and midscale brands, the very types of properties that Starwood lacks. And it currently has a program (WyndhamRewards) with no real elite status levels, which Starwood would I'm sure fix. IHG has no budget brands, and its midscale brands are only a portion of its portolio, and the rest of the portfolio overlaps with Starwood's existing brands too much.