Marriott Plans to Keep All 30 Hotel Brands From Starwood Merger

After closing on its $13 billion acquisition of Starwood Hotels & Resorts Worldwide on Sept. 23, Marriott Int.'l (MAR) remained mute on how it planned to merge the two companies' hotel brands, until now.

The companies' merger formed the largest hotel chain in the world, with 30 brands under one umbrella. Marriott global brand officer Tina Edmundson told Bloomberg News that the company plans to keep all 30, including its own Marriott, Courtyard and Ritz Carlton hotels and Starwood's Sheraton, Westin, W and St. Regis properties.

"We thought long and hard about how you serve up 30 brands in a meaningful way - one that helps consumers infer both price and experience," Edmundson told Bloomberg.

Evercore ISI Analyst Richard Hightower, who covers Marrott, told TheStreet that contractual issues with current hotel owners and franchisees "stands out immediately" as a problem that could arise from not keeping all 30 brands.

"You can't have two identical MAR-branded within a certain competitive radius, assuming MAR were to collapse multiple brands within the same chain scale into one, for instance," Hightower said.

As for consumers, Hightower said he does not think they will "care really" what brand the hotels are operated under.

A Marriott spokeswoman said no one from the company could be immediately reached for comment.

Among other branding plans, Marriott will categorize eight of its 30 brands into two luxury platforms, "classic luxury" and "distinctive luxury." The Ritz-Carlton, St. Regis and JW Marriott will be deemed "classic," according to Bloomberg.

Nightly room rates in New York City for the Ritz Carlton range between $725 to $1,541, the St. Regis between $726 and $1,469 and the JW Marriott between $440 and $1,479.

Marriott is still figuring out how to combine the two companies' luxury and rewards programs. The company has until 2018, when the programs are expected to stop operating independently, to fine tune the terms, Edmundson told Bloomberg.

On Monday morning, Evercore downgraded its rating on Marriott stock to "hold" from "buy," stating there could be a "noticeable lag between macro improvement and underlying lodging demand" under presumptive presidential nominee Republican Donald Trump's administration.

"Lodging stocks have reacted strongly to the initial euphoria surrounding the potential for tax reform, infrastructure investments and regulation rollbacks - all of which are associated with a 'Pragmatic Trump' governance scenario," Evercore analysts said in this morning's research note.

The firm said its analysts "certainly agree" that Trump's platform, which aims to cut the corporate tax rate to 15% from 35%, "seems to portend much good for the economy and business sentiment in general," but "the timing and magnitude thereof remain in question."

Shares of Marriott fell 45 cents to $78.07 on Monday.

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