jaymar01

Bloomberg Business: Could the Starwood Hotel Group be sold?

http://www.bloomberg.com/news/videos...e-value-bhalla

Land-of-Miles

I would be delighted if IHG took over Starwood and made most of the high end properties IC's. That would address my biggest problem with IHG (IC footprint) at a stroke.

Let's face it it is highly unlikely that Starwood will be doing the acquiring given that it is on the back foot here. It looks very much like it is being prepped for sale in whole or in parts. IHG is a logical buyer as the higher end Starwood properties complement the predominately low end IHG properties.

sfozrhfco

I just hope the focus on cost cutting does not go too far. In the short term management probably feels that Starwood's reputation carries enogh weight that it would take time for people to realize the consequences of all the cost cutting. This makes the company look more attractive financially to the acquiring company but may have longer term consequences which impact the customers.

Wall Street has been in love with Spirit on the airline side. There is a constant pressure from Wall Street to increase seat density, charge more fees, etc. Turns out now Sprit is finding its stock falling rapidly as their future forecasts look pretty bad compared to other airlines. Spirit got a big boost initially by testing out various ways to charge more for less service and perhaps now the consequences of those decisions will finally catch up to them. JetBlue is actually now doing very well by increasing revenue and profitability by offering a product like Mint along with free wifi that actually works.

Starwood does many things well and some things not so well but the question for me is will the company just be focused on cutting costs to make the balance sheet look better to a potential buyer and how that will start to impact the customer experience.

iflyjetz

Marriott's CEO, Arne Sorenson, was on CNBC in the last hour. He stated that Starwood's EBITDA numbers weren't high enough for him to be interested in Starwood. Good thing; I wouldn't want to see Starwood merged with Marriott.

JK

Hilton have expressed no interest too, so list is beginning to get shorter!

jaymar01

Marriott? Yipes!!

I'd zero out my SPG Starpoints inventory immediately if that ever happened.

Marriott has forgotten more about points devaluation than everybody on Flyertalk will ever know.

iflyjetz

Yes, you can thank Arne Sorenson for that and other Marriott program 'enhancements'. That program went downhill the day he joined the Marriott team.

I didn't look at this year's category changes, but it's my understanding that Marriott's was a fairly brutal devaluation this year. The bad thing is that I've got ~350K 'orphaned' MR points that I haven't been able to use, as I'm just barely able to keep my Hyatt + SPG top status this year so I've got no 'spare' hotel nights to burn the points.

Hilton's not much better on the points burn thing; their HHonors points are like Delta Skypesos.

A merge of SPG and IHG would be interesting, but I'm hoping that SPG simply acquires one or two smaller chains. SPG has concentrated on expanding in Asia the last few years; I hope that they increase North and South American presence.

TTT

Anyone changing booking habits until this merger speculation becomes more clear? I would hate to be sitting on SPG points that suddenly become something else.

JK

Nope. This will take a long time to play out, and the time between agreeing on a deal, and closing the deal will be pretty long too.

nongsom

No but I research for another chain for my travel as backup plan if the bad things comes.
Worst case is go to OTA loyalty program and aim for pure cash back.

Land-of-Miles

Not really planning changes but I certainly won't be pushing for LTP this year as I was previously planning to.

lcpteck

Hope the SPG loyalty program will continue or everything is down the drain...

Dieuwer

Drury is VERY good IMHO. Stayed there a couple of times and it is definitely not a Motel 6. More like a Hilton Garden Inn/Hampton Inn or Marriott Courtyard.

https://www.druryhotels.com/PropertyList.aspx

How about Hyatt?

TTT

That's my concern. If Starwood is sold I think we should expect a reduction in the program overall. SPG is arguably the most valuable hotel loyalty program of the large chains - only can go down from there with a purchase.

^ The Drury Inn's I have stayed in have been very nice. I see more and more of them around too - they must be expanding.

bhrubin

I think you are being misled by the reports you are reading; there is no consensus that IHG would acquire Starwood. Just consider the report below which suggests that IHG shareholders are open to an acquisition BY Starwood (which has the better balance sheet to purchase, FWIW, despite the other reports):

http://skift.com/2015/04/29/intercon...d-acquisition/

There is going to be plenty of speculation about what Starwood will or will not do, and whether Starwood will acquire, be acquired, etc. No one knows for sure. IHG had the chance to be acquired by Wyndham last year, and that didn't happen. But it's still more likely that Starwood acquires IHG thanha the other way around for the time being. Things can change, of course...which is why all this rampant speculation is worth little.

Personally, I'd love to see a merger between IHG and Starwood for all the reasons outlined in the above article post. I'd love to see a merger between Starwood and Hyatt, too--but that doesn't seem to resolve the Starwood issues that are causing this action in the first place. Hyatt is not big enough and is too costly for the potential revenue gain to imagine that any Hyatt-Starwood merger would be in the works--but I'd love to be wrong and see that happen.