NEW YORK (TheStreet) --Marriott (MAR) - Get Report announced the acquisition of Starwood Hotels & Resorts (HOT) for $13 billion Friday morning, making it the world's largest hotel operator. The deal gives Marriot 1.1 million rooms at 5,700 hotels in 110 countries.
Marriott CEO Arne Sorenson joined this morning's "Squawk Box" on CNBC to discuss the acquisition of Starwood Hotels & Resorts and the company's updated loyalty program.
Marriott has updated its loyalty rewards program to allow for a more seamless transition for customers previously under the Starwood Preferred Guest (SPG) program.
Some of the features of the program are that it will include both members of the Ritz-Carlton Rewards and SPG. The accounts will be linked at Marriott.com. Customers will have immediate match status across the programs. Customers will be able to transfer points between the programs, and will be eligible for free Wi-Fi when booking direct.
"The loyalty program strength depends on knowing our customers, delivering value to the customers, but a lot of that value is about the range of choice. If we can offer them a place to stay no matter where they're going physically, no matter what level of luxury they want, we make that program that much stronger," Sorenson said.
By strengthening the loyalty program, it allows the company to create a vast ecosystem of a direct relationship with customers, he noted
When describing how the program will work, Sorenson says there's a high level of functionality already.
"Last night we announced that customers can go online and link their accounts. If their elite in either program, we'll match that highest elite level in the other program. They can transfer points from one program to the other so that they can redeem those at any one of the 5,700 plus hotels," he explained.
He added that it would take more time to get to a place where the loyalty programs are rolled into a single offering. This is because of technology issues, external partners, and customers who want to have a say in how these programs evolve.
Shares of Starwood ceased trading this morning on the New York Stock Exchange.
Shares of Marriott were lower during early morning trading on Friday.
Separately, TheStreet Ratings objectively rated Marriott stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
TheStreet Ratings rated this stock as a "buy" with a ratings score of B-.
The company's strengths can be seen in multiple areas, such as its growth in earnings per share, revenue growth and increase in net income. We feel its strengths outweigh the fact that the company shows weak operating cash flow.
You can view the full analysis from the report here: MAR