Post-Merger, Marriott to Control Over 50% of Market Share in 17 of the Top 20 Meeting Destinations

When Marriott announced in November, 2015, that it was merging with Starwood to create the world’s largest hotel company, it met with mixed reaction from meeting planners. Some worried about diminished competition for their business, while others brushed it aside as having little impact on them.

I initially fell into the latter camp. My view is that supply and demand drive market pricing, and that since the merger wasn’t going to affect the supply of hotel meeting space, it wouldn’t have much impact on pricing to planners. When demand is strong, like it is in the current seller’s market, hotels are able to drive tough deals. When demand weakens, it’s the planners calling the shots.

Plus, I’ve always been a Marriott fan. When I owned my event management firm and we were sourcing venues for clients, all things being equal we preferred Marriott Hotels. The rooms and properties were on par with Hyatt, Hilton and Sheraton, but we found Marriott’s service was more consistently planner-friendly.

From Big Player to Market Dominance

However a recent conversation with The Capitol Forum, a Washington policy group that analyzes mergers for possible anti-competitive outcomes, turned me around somewhat. They reached out to get my opinion on how the merger would impact meeting planners, and I gave them my reasoning above.

Yet some analysis they sent me was a little unnerving. It turns out that after the merger, Marriott will control more than 50% of the market share in 17 of the top 20 meeting destinations. Think that’s a lot? Wait it gets worse. In a half dozen of those markets, Marriott’s share will be 65-75%, as shown below.

If you’re thinking of hosting a meeting in Scottsdale, does the fact that Marriott will control 73% of the hotels with significant meeting space in the area concern you? How about Marriott controlling 63% of the market in a city the size of Washington, DC? Those are some pretty sobering numbers.

I’m not suggesting Marriott will use this market dominance for collusion, to the planners’ disadvantage, but they’d certainly have the numbers to do so. Planners hoping to negotiate against several local properties for their meeting will now have one less major player in the mix.

On the Flip Side . . .

Before we start labeling Marriott as the next ‘evil empire’ of hospitality, let’s bear a few things in mind.

  • Smart planners already benefit by bundling as much of their business as possible when negotiating, and Marriott’s expanded inventory will enable them to accommodate even larger portfolios of planner business.
  • The merger should not affect meeting hotel inventory, so planners’ choices are not really being limited. If Verizon were to merge with AT&T, for example, suddenly there would be one less mobile company to compete for your business. With the Marriott-Starwood merger, however, all of the individual hotels will still be there with their meeting rooms. So the supply side of the equation won’t change.
  • Marriott already had pretty sizable numbers in many of these markets already, as shown in the table above, and there hasn’t been much said or written about this adversely affecting planners in any way. When Starwood acquired Sheraton in 1998, we didn’t hear much about planner problems either.
  • Actual collusion on the local level is not so easy to execute. For one thing, Marriott (like many chains) doesn’t actually own the vast majority of their hotels. They’re paid to manage them, and have to report to individual owners of each property, all of whom have their own unique P&L situations, with their own sales goals, locations, renovation status, and lots of other criteria that would make it difficult to present a unified pricing front with other properties in the same market.

The Airbnb Factor

From Marriott’s perspective, they’re facing a new challenge in the rise of sharing platforms, like Airbnb, opening up vast inventories of lodging options for travelers who might otherwise stay at hotels. Surely this is one of the reasons driving the merger, to enable Marriott to be better positioned to respond to this new threat. Though Airbnb doesn’t actually own any properties in it’s database, as a whole the platform itself becomes a tremendous potential competitor.

From a meeting planner’s perspective, AirBnB has not had a significant impact. Yet. But it’s only a matter of time.


The economics of supply and demand will continue to be the primary driver of hotel pricing and competitiveness in the meetings industry, and a bigger Marriott is unlikely to affect the supply end, from an inventory standpoint.

Still, planners with the ability to choose not just the individual property, but the destination itself, would be wise to look at how much of a given market is dominated by the new Marriott. All things being equal, from a negotiating standpoint planners will want to have several viable properties to compete for their business. If too many of those are Marriotts, it’s not unreasonable to think you may not get the same level of aggressive bidding as if they were all separate brands. Once the merger is completed, that will be the case in many of the top meeting destinations.

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