Marriott-Starwood Merger Ripples Into American Express
by Richard D'AmbrosioPhoto: José Carlos Cortizo Pérez
Beyond what it means for travel agents and for frequent flyers, another big question being bandied about as Marriott International Inc. and Starwood Hotels & Resorts Worldwide lock up their merger agreement is what will happen to their co-brand credit cards. Many suggest it may well mean another big credit-card loss for American Express.
American Express issues the Starwood Preferred Guest credit card, while JP Morgan Chase & Co. issues the Marriott Rewards VISA card. Both cards encourage direct bookings with different travel suppliers by offering double points; Starwood and American Express offer double points per dollar when a cardholder books directly with Starwood while Marriott and VISA offer double points when a cardholder books directly with an airline.
Last week, Starwood and Marriott shareholders voted to approve the companies’ revised merger agreement, putting the companies on track to become the world’s biggest hotel chain, with 5,500 hotels and resorts in more than 100 countries.
On its website, Starwood said its loyalty program won’t be combined with Marriott’s until 2018, but did not mention its co-branded credit card program. “This means SPG will continue to run separately until then. In the meantime, we’re actively exploring ways to build bridges between the two programs to further enhance your experience,” Starwood said.
Marriott CEO Arne Sorenson said something very similar on his April 8 blog. Both Marriott and Starwood have stated they will ask both issuers to work with them on the merger of their co-brand cards.
RBC Capital Markets analyst Jason Arnold has been quoted in the financial press saying it’s virtually certain Amex will lose the account. Amex has lost a string of high profile co-brands in the past few years, including Costco Wholesale Corp., JetBlue Airways Corp., and Fidelity Investments.
Marriott’s card carries an annual fee of $85, while Starwood’s card has a $95 annual fee after a first year free.
