Ritz-Carlton, St. Regis Expand in Asia, Contemplate Merger Structure

Photo: Tim Wang

When Marriott’s acquisition of Starwood is completed this summer, the combined group will significantly increase its luxury footprint in Asia, said executives speaking at two separate press events during ILTM Asia, being held now in Shanghai. 

Ritz-Carlton currently has 25 properties open across the region, including two Reserves and one Bulgari, while St. Regis has 15 properties online, and another 14 in the pipeline. Jim Petrus, global brand leader for the latter, noted a Maldives property will open later this year, Shanghai at the end of this year or Q1 2017, and Changsha in the same period.

As a result of the deal, there will be hotels from both brands in Langkawi, where St. Regis just opened and a Ritz-Carlton is in the works. Based on current properties and projects the brands list as under development on their websites, there could be 50 properties in Asia by 2022.

One unanswered question is how the combined luxury and lifestyle brands of the two behemoths will be structured. Currently Starwood has clustered St. Regis, Luxury Collection, and W Hotels as its luxury offering, while Marriott International operates Ritz-Carlton, Reserve, and Bulgari under a separate structure from Autograph Collection, JW Marriott, Renaissance, Edition, and AC. 

One possible scenario would be to group St. Regis, Ritz-Carlton, Reserve, and Bulgari together as a ultra-high-level luxury offering, with Luxury Collection, Tribute Portfolio, and Autograph Collection clustered together as four-and-five star independent hotels, and some Luxury Collection properties flagged to Ritz-Carlton. W with Le Meridien might fit alongside Renaissance, which Marriott has been pushing into the lifestyle category, and maybe Edition and AC, a European brand Marriott has been expanding into the United States.

One industry executive noted that while St. Regis, W, and Luxury Collection are fully integrated into the SPG Rewards program and affinity card, Ritz-Carlton has a separate loyalty program and its own affinity credit card. Separating out Bulgari, Reserve, St. Regis, and Ritz-Carlton from the other flags might enable Marriott to operate a luxury cluster streamlined from the rest of the bigger company.

The executive noted, “Today’s luxury consumers are more demanding. It’s gone beyond providing just a great hard and soft product, to where hotels now are expected to create on-demand, personalized luxury experiences for their guests outside of the hotel. To do it right and in time with the market is very difficult when you are part of the large bureaucracy you need to operate mass brands.”