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September, 30, 2016

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Marriott becomes world's largest hotel chain

NEW YORK -- Several of the best-known names in travel are now united in one hotel company.

Marriott International closed Friday morning on its US$13 billion acquisition of Starwood Hotels & Resorts Worldwide, bringing together its Marriott, Courtyard and Ritz Carlton brands with Starwood's Sheraton, Westin, W and St. Regis properties.

In total, 30 hotel brands now fall under the Marriott umbrella to create the largest hotel chain in the world with more than 5,800 properties and 1.1 million rooms in more than 110 countries. That's more than 1 out of every 15 hotel rooms around the globe.

Marriott now eclipses Hilton Worldwide's 773,000 rooms and the 766,000 that are part of the Intercontinental Hotels Group family, according to STR, a firm that tracks hotel data.

"We've got an ability to offer just that much more choice. A choice in locations, a choice in the kind of hotel, a choice in the amount a customer needs to spend," Marriott CEO Arne Sorenson told The Associated Press in an interview Thursday.

Starwood's guest loyalty program — Starwood Preferred Guest — was also a "central, strategic rationale for the transaction," Sorenson said. The program's members are deeply loyal to it, have generally higher incomes and tend to spend many nights on the road. Starting Friday, members of Starwood and Marriott's two loyalty programs will be able to link their accounts together. Gold elite members in one program will get gold status in the other. Platinum elite members will get platinum in the other. Marriott silver members will see Starwood's lowest category, Preferred Plus.

Each Starwood point will be worth three Marriott Rewards points.

Starwood put itself up for sale in April 2015. The Stamford, Connecticut, company had struggled to grow as fast as its rivals, particularly in "limited service hotels," which are smaller properties which don't have restaurants or banquet halls. They are often located on the side of the highway, near airports or in suburban office parks.

To get Starwood, Marriott had to outbid China's Anbang Insurance Group. U.S. and European anti-trust regulators were quick to approve the sale but the Chinese government hesitated, delaying the sale by months.

"We may have been a little too optimistic about how fast we could get this thing closed," Sorenson said Thursday.

Marriott and Starwood — like other hotel chains — own very few individual hotels. Instead they manage or franchise their brands to hundreds of individual owners, often real estate development companies. Those individual hotel owners are responsible for setting nightly room rates. It isn't uncommon for a developer to own a Marriott, Hilton, Hyatt and Sheraton in the same city.

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