Starwood Hotels & Resorts

Definition

Starwood Hotels & Resorts was a major American hotel and leisure company that operated a portfolio of renowned brands, including Sheraton, Westin, and St. Regis. The company was well-known for its innovative loyalty programs and strong emphasis on customer service, which made it a significant player in the hospitality industry. Starwood's strategic growth was largely driven by mergers and acquisitions, expanding its market presence and enhancing brand value.

5 Must Know Facts For Your Next Test

1. Starwood Hotels & Resorts was founded in 1960 and became a significant player in the hotel industry through aggressive expansion via acquisitions.
2. In 2016, Starwood was acquired by Marriott International for $13.6 billion, which significantly increased Marriott's market share and brand portfolio.
3. The SPG loyalty program offered members exclusive benefits like free nights, upgrades, and special promotions, contributing to customer retention and brand loyalty.
4. Starwood's emphasis on customer service and unique brand offerings allowed it to distinguish itself from competitors and create a strong market presence.
5. The company's asset-light strategy enabled it to focus on brand management and marketing while minimizing risks associated with property ownership.

Review Questions

• How did Starwood Hotels & Resorts use mergers and acquisitions to grow its portfolio within the hospitality industry?
  • Starwood Hotels & Resorts strategically expanded its portfolio through a series of mergers and acquisitions, allowing it to add well-known brands like Sheraton, Westin, and W Hotels. This approach not only diversified its offerings but also strengthened its position in various market segments. By acquiring established hotels and leveraging their existing customer bases, Starwood increased its market presence and enhanced brand recognition across different regions.
• Discuss the impact of the acquisition of Starwood Hotels & Resorts by Marriott International on the hospitality industry.
  • The acquisition of Starwood Hotels & Resorts by Marriott International created the largest hotel chain in the world, significantly altering the landscape of the hospitality industry. This merger combined over 5,700 hotels under Marriott's management, increasing its global footprint. The integration of loyalty programs also enabled Marriott to consolidate customer bases and enhance competitive advantages against other hotel chains, further shaping industry dynamics.
• Evaluate how Starwood's SPG loyalty program contributed to its overall business strategy and customer engagement before its acquisition.
  • Starwood's SPG loyalty program played a crucial role in its overall business strategy by fostering customer loyalty and encouraging repeat business. Through various rewards and personalized experiences, SPG effectively engaged guests and created a sense of belonging among its members. This focus on loyalty not only improved customer retention but also differentiated Starwood from its competitors, allowing it to build a strong brand reputation within the hospitality sector before its acquisition.

Related terms

Marriott International: A global lodging company that acquired Starwood Hotels & Resorts in 2016, creating the largest hotel chain in the world.

Loyalty Program: A marketing strategy used by hotels to reward repeat customers, with Starwood's SPG (Starwood Preferred Guest) program being one of the most recognized in the industry.

Asset-Light Strategy: A business model adopted by many hotel companies, including Starwood, focusing on managing properties rather than owning them to reduce capital expenditure and increase flexibility.