Starwood Hotels and Resorts CEO Thomas B. Mangas pointed to “the most powerful loyalty program in the travel industry” in a letter to Starwood employees on March 31 amid furious discussions about a possible acquisition by Anbang Insurance Group and Starwood’s impending merger with Marriott International.
Below is the letter from Mangas to Starwood employees:
Dear Associates:
There is no question that the last few weeks have felt like a rollercoaster ride for our company and our people. Like any ride, it could not go on forever, and I’d like to share with you that the Consortium led by Anbang just informed us that they have withdrawn their bid for Starwood. Many of you have told me that this journey has been both exciting and tiresome, and I agree, which is why I am pleased that we have reached resolution and can continue our important work with Marriott to bring together these two great companies.
Although this has been a trying process, it did lead to a 15.4% increase in the value of our company, underscoring the success of Starwood and the talent of our people. I can tell you that after having a closer look at what we have to offer, Marriott is only more excited to join forces with Starwood. They greatly admire our approach to brands, the intense loyalty of our SPG members and our global footprint, infrastructure and teams. Throughout the back and forth, our Board of Directors remained committed to our merger with Marriott, and the strategic advantages of our combination which will offer our guests and customers 1.1 million rooms across 30 brands, deliver the most powerful loyalty program in the travel industry and create countless opportunities for our associates around the globe.
Our integration teams continue to work closely with their counterparts at Marriott, and we remain on track to close midyear. Next week is our shareholder vote which will be an important milestone, after which point we can really amp up our work to integrate the best of Starwood and the best of Marriott to create the world’s leading hotel company.
It is interesting times to be sure, but it is not lost on me that for some, depending on where you sit, the potential of going in another direction had different professional implications. Clearly a merger of this magnitude can take a personal toll. However, we should all feel very proud of the sought after, innovative company we have created together. Let’s continue to take great care of our guests every day and win in the marketplace, which is the very best way to ensure that Starwood’s unique take on hospitality endures.
On behalf of our Senior Leadership Team and Board of Directors, I would like to thank you for your resilience, patience and hard work during this unprecedented time.
Regards,
Tom Mangas
Just one day after the Mangas letter, Starwood’s corporate leaders sent another letter to Starwood employees, supporting the merger with Marriott.
Here is that April 1 letter, framed in several bullet points:
● Net-net, this process, arduous as it was, was a positive – increasing the value of our company by 15.4%. As you witnessed firsthand in the press, Marriott is even more excited about the potential of our combined companies after spending the last few months learning more about Starwood and our strengths during the integration planning process.
● Arne Sorenson and the Marriott team have been effusive in their praise for what they see as Starwood’s advantages – our culture of brands, the immense loyalty of our high value SPG members, our global footprint and the worldwide infrastructure we have developed over time as a truly global company.
● As we said when we first announced the merger, Marriott was attracted to Starwood, in large part, because of the strength of our people. Marriott will need to retain Starwood talent to respond to the volume, scale and complexities of a much larger business, and will also rely on Starwood talent for some time post close to successfully integrate our companies.
● Together with Marriott, we continue to make progress on the process for talent selection and retention as well as identifying transitional/lift and shift roles.
● As of now, we do not anticipate any changes to the timeline around the talent process we laid last month. We will push hard to ensure that the process remains on track, understanding that uncertainty will continue to prevail until our people have a clear sense of their future opportunities with the new company and timelines.
● During the entire process over the last few weeks our Board remained committed to the Marriott merger and the merits of our strategic combination which you know well — all-important scale, much greater presence in the upscale segment, a long runway to grow, the power of our combined best-in-class loyalty programs, and unrivaled choice for our guests and customers with 30 brands across all key market segments.
● No company handles change as well as Starwood and there is no team as resilient. Over the next few months as an independent company the focus of our leaders is clear: to win in the marketplace and to advocate for our people and the special capabilities we’ve built together.
● We realize this was a tough time of ups and downs and, depending on where you sit in the organization, each option had real professional and personal implications. This added one more layer of uncertainty on top of the uncertainty we’ve been living with for some time. A merger of this magnitude has real consequences for many of our people and we recognize that. We’ve been dealt a tough hand over the last year, but through it all we have showed resilience, drive and a huge desire to win.
● Our leadership is needed now more than ever as we bring our associates through this period of great change. The best way we ensure the continued success of our brands, programs like SPG and, most importantly, our people is for us to delight our guests every day, exceed our owner’s expectations, grow our RevPAR faster than our peers, and develop our talent for the future better than anyone else.
● Our integration work continued over the last couple of weeks and will really amp up after the shareholder vote next week. Our integration teams have been working tirelessly with their counterparts at Marriott and there is a lot of work ahead as we focus first and foremost on critical Day One must-dos.
● Needless to say, we all have a lot of questions about the market considerations that led the Anbang Consortium to withdraw its bid. However, there’s not a lot of value in speculating at this point.