Originally Posted by venk
I am very confused with the business model here and what it means to loyalty programs. Any one have clearer picture?
As far as I can understand, there are property owners (such as Host Marriott) that cherry pick and own properties across multiple brands (Westin, Hilton. Hyatt, etc.). Does it make sense for them to let these properties compete with each other?
Then there are brand owners such as Starwood maintaining the Sheraton, Westin, et al brands by either managing such branded hotels for the property owners or franchising the brand to others who will own and manage it. Presumably these brand owners maintain the brand consistency and loyalty programs that go with it.
It would seem to me that the above two entities would be forced to either collude to reduce competition or be at odds with each other in competitive strategies.
If I am not mistaken, brands such as Starwood and Hilton have been reducing actual ownership of real estate in favor of simply operating and maintaining the properties. Host Marriott buys the properties to actually own them for investment purposes.
I suppose this not only helps raise cash for the hotel chains, but also helps keep the cash liquid instead of having it tied up in real estate and capital improvements to properties.