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英国留学生essay

时间:2021-08-14 来源:未知 编辑:梦想论文 阅读:
Table of Contents
Introduction 3
1.0 Background Information 3
2.0 Benefits of the merger 3
3.0 Research project plan 6
3.1 Introduction 6
3.2 Literature Review 6
3.3 Research Methodology 7
3.4 Data analysis 8
3.5 Recommendations 8
4.0. Conclusion 9
5.0. References 10
 
Introduction
 
1.0 Background Information
At the start of May 2016, Starwood Hotel and Marriott Hotel agreed to a merger that was the most anticipated deal in the hospitality industry. This was agreed after Starwood started considering offers from other rivals such as intercontinental hotels and it was a threat to Marriott Hotel. Both hotels have many international hotel chains. Starwood was named as the seventh-largest hotel in the world while Marriott was named as 3rd largest hotel in the market in 2014. Despite many hospitality companies showing interest to purchase or merge with Starwood, Marriott was the hotel that secured the deal.
 
2.0 Benefits of the merger
To begin with, merging enabled the companies to enjoy economies of scale. After merging Starwood and Marriot can enjoy cost benefits such as technical, bulky-buying, financial and organizational economies (Guarav, 2012). Starwood and Marriot incur a fixed technical cost because their operations were similar instead of each company doing its technical activities hence reducing the overall cost. They were able to buy raw products for their production in bulky and prices for bulky products are generally lower compared to normal market prices. The two companies enjoyed financial economies because they have higher bargaining power for better interest rates from financial institutions. Also, they are enjoying organizational economies based on the proper unit of command which is led by one management. 
Secondly, the mergerresults into tax benefits for the joint company.  Starwood and Marriottenjoy large tax benefits because if they pay taxes as two organizations the benefit ishigher than when they pay as individual companies. Merging helps the two companies enjoy a subsidized tax rate. For instance, Starwood’snet worth in the year 2016 was $12.4 billion and Marriott was more than that, meaning their taxes would have been calculated separately but when they merge their taxes will be calculated as one organization hence reducing the overall tax paid. 
Thirdly, the merger creates superior financial capacity because it combines the financial resources of the two companies. For instance, Starwood Hotel Group has an approximate of 1,200 properties and over 180,400 employees worldwide whiles Marriott Hotel Group has approximate of 4,087 properties and over 697,000 employees worldwide (Starwood, 2016: Marriott, 2016). A combination of these properties together and employees makes the merger enjoy financial resources. The company enjoys creditworthiness in the financial markets and higher negotiation power when they want loans at subsidized interest rates. 
Additionally, the merger increasesits share of the market. Starwood is the seventh-largest hotel in the world while Marriott is the third-largest hotel in the world meaning each has a very big share of the market in the hospitality industry. Due to a fall in the hospitality industry market by 12% in 2016 followed by another fall of 2.7% and another of 5.3% resulted in major players in the industry to take a deliberate action of securing growth and market position. Therefore, the merger between Starwood and Marriott became the largest hotel chain in the world and perhaps it is regarded as the biggest expression of this trend. 
Merge helps Starwood and Marriott to enjoy the miscellaneous advantage and research development (Guarav, 2012). Starwood and Marriott can generate value by accessing funds' assets that enable them to grow and develop further. The cost of overall production is reduced since the company uses one means of production saving the cost of energy, manpower, and technology. Also, it helps to reduce the fund used for research because they are focused on similar products instead of funding research for different products.  
Besides, the merger helps the two firms to be more competitive in the market. Starwood and Marriott are both international hospitality hotels hence they have a wide range of markets worldwide. When they merge both retained their customers or gain more customers in case products and services offered are better than before. This means that they are more competitive than other organizations because they can fund advertisements widely and recruit the best product and service promoters.    
Finally, the merger extends the credit card reach of Marriott. This means that Marriot can include new cards from Chase and American Express which had originally partnered with SPG. SPG is offering brand new credit cards to Starwood preferred guests and American Express credit cards are accompanied by a myriad of great benefits (Geoff, 2018). Besides, SPG and SPG cardholders’ benefits from this merge because they are getting more credit card customers from the merger. All Marriot new customers were awarded 100,000 points as a bonus through agreement Chase that rewards premier plus credit card.      
 
3.0 Research project plan
3.1 Introduction
 The merger is between Starwood Hotel Group and Marriott International Inc. and both are international large hotel chains with some similarities in terms of their focus on luxury and mid to high tier hotels. Although they have different approaches to how they reward their customers, they focus on different international locations and a different approach to ownership and management of the hotels and real estate. Starwood is located in more than 32 countriesinternationally with both hotels and real estate. The major Starwood segments include; Westin, Sheraton, The luxury collection, Four points by Sheraton, W Hotels and Le Meridien. On the other hand, Marriott is located in over 80 countries with both hotels and real estate. The major Marriott segments include; Luxury, Signature brand, Lifestyle/collections, and Destination entertainment.  
3.2 Literature Review
 According to (Kavya, 2014), the Christmas holiday is spent either in London, New York City or Sidney. When a tourist or adventurer goes to another country they are required to book luxury heaven or hotels because they don't live in these cities. While compiling a list of hotels you need for your stay you can't afford to exclude the following hotels on the list, they are called the top ten best hotels in the world. These 10 hotel chains are; The Carlson Rezidor Hotel Group, Home Inns, Best Western, Starwood Hotels and Resorts, Accor, Choice Hotels International, Wyndham Hotel Group, Marriott International, Hilton Worldwide and IHG-Intercontinental Hotels Group.
Merging of hotels is not a new thing in the international hospitality industry but for the past three years, it has increased. Hotel group chains have continued to grow with new brands tucked under one umbrella and some brands being transformed into other brands. There are many stories and propaganda behind the consolidation of these hotel chains. These consolidations didn't impact the hotel industry until Marriot and Starwood merged in 2016. Another mega merged announced in the hospitality industry is that of HNA Tourism Group acquiring Carlson Hotels. According to (CWT SOLUTIONS GROUP, 2016), Chinese Conglomerates have continued to look for new opportunities in the hospitality industry through further merging of hotel chains. The Starwood and Marriott merge affects global implication while others are focused on specific growth opportunities. 
 
 
3.3 Research Methodology
Quantification models and empirical design were developed, experimented and tested through an event research study analysis to determine the Starwood-Marriott merge. Also, it was designed to test activities related to their merging and observe the abnormal stock patterns (Dogru et al, 2018). Data was collected through employing of Factiva street wall newspapers, CRSP merge files and valuable line research. Additionally, the researcher used online questionnaires to collect the data about the merger. The short-term event study was used to examine the acquisition of stock returns. 
3.4 Data analysis
The outcomes were provided based on financial insights and outcomes before, during and after Marriot-Starwood merged. In 2014 Starwood Hotels and Resort had a total of 1161 properties and 339,243 guest rooms worldwide. The average price for each room was $300. They have man-king catering services in their nine brand hotels. Marriott International has a total number of 3787 properties and 653,719 rooms. With these equity returns of which most of them are flats that have resulted in a further increase in profit and acquisition of new property after the merger. However, the initial Marriot shareholders have continued to gain superior returns following an acquisition in the long run. The findings showed that there is an overreaction on short-term stock returns based on corrections with an improvement in returns and sales performance of Marriot. In 2015, Marriott and Starwood top as the world's largest hotels with many room counts. However, it was revealed that the hospitality industry has experienced many changes such as merging and sales of real estate.  
 
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