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Cost of Marriott's acquisition of Starwood results in 67% fall in profit

08 November 2016 by
Cost of Marriott's acquisition of Starwood results in 67% fall in profit

The cost of Marriott International's acquisition of Starwood Hotels & Resorts to create the world's largest hotel group amounted to $228m (£183.8), according to the company's third quarter figures for 2016.

As a result, Marriott's profit plunged 67% to $70m (£56.4m) from $210m (£169.3m) during the third quarter of 2016.

Meanwhile, the company‘s total revenue increased by 8.3% from $3.6b (£2.9b) to $3.9b (£3.1b). Revenues for July to September 2016 include $168m (£135.2m) related to the eight days of Starwood's results following the takeover on 23 September.

While comparable dollar revpar worldwide for the combined group increased 2.2%, the forecast for the 2016 fourth quarter is that this figure will decline to less than 1%.

Arne Sorenson, president and chief executive of Marriott International, said that the company is now working to integrate Starwood employees in order to realise "revenue and cost synergies" as quickly as possible.

"The day the acquisition closed, we offered status match to our more than 85 million combined loyalty members, along with the ability to transfer and redeem points between Marriott Rewards, which includes the Ritz-Carlton Rewards, and Starwood Preferred Guest, the industry's leading loyalty programmes," he said.

The new look Marriott International totals nearly 6,000 hotels across 30 brands, including Ritz-Carlton, Edition and Autograph Collection from Marriott and St Regis, W and Sheraton from Starwood.

Marriott International now has a development pipeline comprising 2,454 hotels with nearly 420,000 bedrooms.

Marriott completes acquisition of Starwood >>

China delays Marriott-Starwood merger >>

Marriott International buys Starwood Hotels in £8b deal >>

TagsHotels
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