Search Travel Market Report

mainlogo
www.travelmarketreport.com
  • News
  • Tours & Packages
  • Cruise
  • Hotels & Resorts
  • Destinations
  • Retail Strategies
  • Niche & Luxury
  • Well-Being Travel
  • Training & Events
  • Who We Are
    • Anne Marie Moebes
    • Brian Israel
    • Dan McCarthy
    • Denise Caiazzo
    • Dori Saltzman
    • Kelly Fontenelle

A Peek At The Fine China: The Industry Mulls Anbang’s Bid For Starwood

by Cheryl Rosen

Photo courtesy: Hennem

It’s been two years since the Anbang Insurance Group came out of nowhere (well, out of China, actually), $1.95 billion in hand, to buy the Waldorf Astoria.

That was obviously just a first step for Anbang into the U.S. hotel market. Step two was its agreement to acquire Strategic Hotels and Resorts from the Blackstone Group in a deal valued at $6.5 billion. That will give Anbang ownership of 17 of the most noted hotels in the United States, including the Hotel del Coronado in San Diego; several Ritz-Carltons in California; the Fairmont Scottsdale in Arizona; the Four Seasons Resort in Jackson Hole; the Fairmont and Intercontinental hotels in Chicago; and the JW Marriott Essex House in Manhattan.

For step three, it’s elbowed its way into what seemed like a done deal between Marriott International and Starwood Hotels & Resorts—with an unsolicited bid of $12.8 billion, $2 billion more than Marriott offered—to acquire the Westin, W, and Sheraton brands. It also bought a U.S. insurance company, Fidelity & Guaranty Life Insurance, for nearly $1.6 billion, and a controlling stake in a South Korean life insurer.

The industry reacts
“It’s going to be very interesting to see what the shareholders decide—do they take the big money from the Chinese or take the long-term return with Marriott?” mused meeting professional Joan Eisenstodt, owner of Eisenstodt & Associates in Washington DC and a frequent expert witness in cases involving the hospitality industry. But she also expressed privacy concerns over having so many five-star properties, which host so many high-level internal meetings, owned by the Chinese.

Still, she acknowledged, “most people don’t care; 99% of the hotel contracts I see don’t even mention who the owner of the property is. People don’t even know enough to ask. If they go to a Hilton they assume it’s owned by Hilton.”

But should they care? Will it make a difference for travel agents if they are dealing with a Chinese insurance company rather Blackstone?

Chandre Casey, owner of I WANT TO TRAVEL in Wading River, NY, is unfazed. “It’s something we don’t have any control over,” she said. “As long as they keep the commission structure and do the right thing in supporting agents—as long as agents don’t suffer in the change—it doesn’t matter to me.”

“I don’t think it will affect my business,” agreed Colleen Gillette, owner of New Paltz Travel in New Paltz, NY—but she also mentioned concerns over security. “One thing people, especially political people, have to think about I think is security,” she said. “Will they sweep the rooms now? And what are the national security implications?”

On a personal level, having a Chinese insurance company as an owner might be a good thing. “The company itself does not have a lot of hotel experience, so I think they’ll want to keep [Starwood’s] people in place,” she noted. “It’s a big money deal, so we have to think about the long-term view, from an economic standpoint. But, is it going to change how we do business? No.”

Indeed, Eisenstodt said, the industry has concerns about Marriott buying Starwood, as well. “First, there is a concern about monopolies in many cities. Then, those who work on commission have concerns, because evidently Marriott is a stickler for IATA numbers and Starwood hasn't been. And finally, there is concern about our sales and services colleagues, for their jobs (will GSOs be consolidated even more?), their responsibilities, and their culture.”

But Paul Ruden, who recently retired from the position of legal counsel for ASTA, had fewer qualms about a Chinese takeover. “The Chinese already own a lot of hotels, and liability and contracts are controlled by state and city laws that govern lodging establishments,” he said. In the global travel industry “all kinds of global ownership go on, and I don’t see any big issues.”

Indeed, he said, “what’s really interesting to me is the fact that the Chinese are so interested in our tourism business. They’re not buying a string of properties that has a cool brand name; this is a very big acquitision. They must believe Starwood is going to be a very successful player going forward. Or perhaps it’s a defensive move, to keep Marriott from becoming any bigger.”

“The fact is this is a new wrinkle in the industry,” Eisenstodt acknowledged. “We really just don’t know what it will mean.”

On the horizon
Starwood said on Monday that it has received a waiver from Marriott to engage in discussions with Anbang, and that it will carefully consider which course of action is in the “best interest of Starwood and its stockholders.”

Shareholders of Starwood and Marriott are set to vote on whether to approve their merger on March 28. That would create the world’s largest hotel company, with more than 5,500 owned or franchised hotels and 1.1 million rooms around the world.

If Starwood backs out of that deal, it will owe Marriott a termination fee of $400 million.

With additional reporting by Jessica Montevago

  0
  0
Riviera
Related Articles
Here Are the Five Best Hotels in the U.S. for 2023
Marriott Will Continue to ‘Soft-Land’ Bonvoy Members in 2023
Five New EDITION Hotels Are Coming in 2023
Marriott International Bets Big on ‘Bleisure’ with Apartments by Marriott Bonvoy
Marriott Is Bringing a W All-Inclusive to Punta Cana
New Opening: Tuscaloosa’s Alamite Hotel, Partially Owned by Nick Saban
New Opening: Marriott’s Debut in Barranquilla, “Golden Gate of Colombia”
Marriott Signs Deal to Add Eight Hotels in Vietnam
New Opening: The Westin Yokohama, Marriott's Newest Japan Hotel
Marriott Is Bringing the First Ritz-Carlton Reserve to the Middle East

MOST VIEWED

  1. All U.S. Flights Grounded Due to FAA Computer Outage
  2. FAA Closes Three U.S. Airports Over National Security Risk
  3. Norwegian Cruise Line Brings Back COVID-19 Requirements
  4. Forbes Says ‘You Need a Travel Advisor in 2023’
  5. What’s New in Travel Agent FAM Trips
  6. U.S. Embassy Issues Security Alert for Mexico After Cancun Taxi Protests

MOST EMAILED

  1. Forbes Says ‘You Need a Travel Advisor in 2023’
  2. All U.S. Flights Grounded Due to FAA Computer Outage
  3. Visitors to the U.K. Will Soon Need to Pay an Application Fee Prior to Travel
  4. Here Are the Automatic & Suggested Gratuity Policies for Each Major Cruise Line
  5. Beverage Carry-On & Corkage Fee Policies by Cruise Line
  6. Tour Operators & Advisors Forced to Cancel Trips as Peru Shuts Down Machu Picchu
Riviera Box
TMR Subscription

Subscribe today to receive daily in-depth coverage, analysis of industry news, trends and issues that affect how you do business. Subscribe now for free.

Subscribe to TMR

Top Stories
Intrepid Travel Launches Turkey and Syria Earthquake Appeal
Intrepid Travel Launches Turkey and Syria Earthquake Appeal

The death toll from the earthquakes on Monday is already over 11,000 and is expected to rise further. 

Read...
TTC Brands Launches Unified Loyalty Program
TTC Brands Launches Unified Loyalty Program

TTC's six tour brands will now share one loyalty program. 

Read...
ALG Vacations Wants Consumers to ‘Plan with a Pro’ in 2023
ALG Vacations Wants Consumers to ‘Plan with a Pro’ in 2023

Following "Year of the Travel Advisor" in 2021 and "Ask a Travel Advisor" in 2022, ALGV is back with a brand-new campaign for 2023. 

Read...
Journeysmiths Expands LATAM Offerings
Journeysmiths Expands LATAM Offerings

The new-to-the-U.S.-FIT operator will expand into five countries by the end of the year. 

Read...
Return to Japan: Intrepid Travel Leads Surge of New Tours
Return to Japan: Intrepid Travel Leads Surge of New Tours

Also, what visitors should know about travel to Japan. 

Read...
Audley Travel Names New President
Audley Travel Names New President

The new hire will take over as president and managing director of its U.S. business starting this May.

Read...
TMR OUTLOOKS & WHITE PAPERS
river cruise 2022
group outlook 2022
lux cruise outlook
CP White Paper
Multi-Gen Outlook
River Cruise Outlook 2019
View All
Advertiser's Voice
Celebrate National Don’t Plan for Vacation Day with Delta Vacations
About Travel Market Report Mission Staff Advisory Board Advertise
TMR Resources Webinars Calendar of Events Outlook/Whitepapers Previous Sponsored Articles Previous This Week Articles
Subscribe to TMR
Select Language
Do You Have an Idea Email
editor@travelmarketreport.com
Give Us a Call
1-(516) 730-3097
Drop Us a Note
Travel Market Report
71 Audrey Ave, Oyster Bay, NY 11771
News |Tours & Packages |Cruise |Hotels & Resorts |Destinations |Retail Strategies |Niche & Luxury |Well-Being Travel |Training & Events |Who We Are
© 2005 - 2023 Travel Market Report, an American Marketing Group Inc. Company All Rights Reserved | 243 South Street, Oyster Bay, NY, 11771 USA | Telephone (516) 730-3097| Terms and Conditions
Cookie Policy Privacy Policy