The Marriott-Starwood merger will create the largest hotel chain in the world—and potentially in India too. Forbes India speaks to both players about the ramifications of the deal and their plans in India
‘For Every Hotel We Have, There’s Another One Coming Up’
By Angad Singh Thakur
On April 8, shareholders of both Marriott International Inc and Starwood Hotels & Resorts Worldwide Inc voted in favour of a merger between the two groups, which will create the largest hotel chain in the world. This was preceded by a dramatic few days that saw the surprise entry of China’s Anbang Insurance Group into the bidding fray for Starwood, and its equally abrupt exit. On the eve of the shareholder meetings in early April, Craig S Smith, president and managing director, Asia Pacific, Marriott International, spoke to Forbes India about the impact the merger is set to have on the Indian hospitality sector. Edited excerpts:
Q. Assuming that the Marriott-Starwood merger goes through, what will its impact be on the Indian market?
I think it would be positive for the market. Obviously, you’re going to have a much stronger hotel company in Asia. Think of the results from fusing these two sales groups into one. Not just to sell hotels to Indians in India, but even outside India. Even the power of advertising, which I think is a big advantage. Today, we (Starwood and Marriott) share a lot of owners [of the hotel properties]. Their life becomes easier because now they just need to speak to one group. Being the largest company also gives you an advantage in negotiations. Imagine something as simple as chicken. One hundred hotels negotiating chicken with a vendor are going to be able to negotiate much better. For the people of India, it means a much bigger international company creating jobs. It’s going to be exciting.
Q. It’s nearly a year since you took over as Asia Pacific head for Marriott International. What have been your areas of focus?
Growth continues to be one of our focus areas. Growth means more incentives, more opportunities for people who work for us. That has also helped us retain talent. We’ve been able to allow people to grow within the organisation. Another focus along the same lines has been talent. We spend a lot more time grooming and building plans for our best foreign talent. Then there’s also a lot of focus on digital. In the case of our company, we have these two big generations that fill up our hotels: Baby boomers and millennials. Millennials are going to be the guests of the future. They’re different in the way they act and how they book. But even the baby boomers are adopting digital. Marriott does over $10 billion a year in direct sales through marriott.com. A lot of people don’t realise this, but that makes us one of the largest retail sites in the world. And that doesn’t include bookings from Expedia, Booking.com, etc. So the focus is on how we make that more actionable in countries like India, China and Japan. In the old days, the general manager would stand in the lobby and talk to guests to find out what they like or didn’t like about the hotel. These days, guests are telling you what they think of the hotel even before they check out.
Q. What does growth entail for the Indian market, and what does your pipeline look like?
Growth in India would be double. The hot question everybody’s asking is about the Marriott-Starwood merger. In India, we will be 100 hotels strong by the end of the year. This is Marriott and Starwood together. That alone makes us the biggest hotel company in India. That’s larger than Taj, which is a very respectable competitor. Besides that, we have an equivalent number of hotels in the pipeline under construction. It’s safe to say, for India and China, that for every hotel we have, there’s another one coming up. In India it takes a little longer than most places because of the licensing and other factors.
‘We don’t need an aggregator to bring value to our guests’
(This story appears in the 13 May, 2016 issue of Forbes India. To visit our Archives, click here.)