Marriot International has closed its acquisition of Starwood Hotels & Resorts Worldwide, creating the world’s largest hotel company.
The merge sees a franchise of more than 5,700 properties in over 110 countries. These include Starwood’s Fiji properties; the Sheraton Fiji Resort & Spa, Sheraton Resort & Spa Tokoriki Island, Westin Denarau Island Resort & Spa and the Sheraton Denarau Villas- Fiji’s first strata-title development, as well as the Fiji Marriot Resort under construction at Momi Bay.
According to Marriot, the acquisition would allow it to expand the scope of its distribution and portfolio while arranging its larger scale to realize cost efficiencies in its corporate and property operations.
“As previously stated, Marriott is confident the company can achieve $250 million in annual corporate cost synergies,” the hotel company outlined in its official announcement.
“Additional synergies at the property level should come in the form of leveraging scale in operations and sharing best practices. Combined sales expertise and improved account coverage are expected to provide both enhanced efficiencies and increased revenue opportunities for managed and franchised properties.”
It says one-time transaction costs for the merge are expected to total approximately USD $140 million, and it intends to take necessary steps for both Starwood and the Marriot’s public debts to be on equal footing.
“Marriott remains committed to maintaining an investment grade credit rating and to continue managing the balance sheet prudently after the merger.”
Marriot International President & CEO, Arne Sorenson said the enhanced efficiencies and revenue opportunities are expected to drive improved property-level profitability, as well as greater owner and franchise preference for the combined company’s brands, which would encourage new hotel developments.