Here are the key takeaways from the article above, which is a synopsis of a research paper Skift conducted;
In the analysis, we assumed Sheraton properties receiving the transformation could see RevPAR Index gains in a similar range — we used a range of 5 percent to 10 percent. This implied, based on numerous assumptions, cumulative incremental room revenue of $75 million to $150 million for all properties being renovated. This incremental room revenue would be 0.8 percent to 1.6 percent of Sheraton’s current annual property revenue, which management indicated is around $9.2 billion.
While we recognize brand transformations do take time, CEO Arne Sorenson seemed positive, indicating on the Q2 2018 earnings call that the company is “making great progress on Sheraton … RevPAR [Revenue per Available Room] index for the brand is now above fair share, … we feel really good about the momentum.
Now, as much as I hammer (deservedly so IMO) Marriott about their communication, I seldom if ever, question their ability to successfully optimize profit (sadly, sometimes at our expense). Marriott had to be drooling over the upside, not only of Sheraton, but the entire Starwood organization (how else can you up your bid by more than a billion in a financial blink of an eye?). Arne's army has already capture enormous economies of scale on financial deals, recapitalization, travel agent fees, development deals, enhanced performance, etc etc. And whereas Marriott can get away with hyping the integration process (more of a qualitative assessment) they are watched very closely with financial forecasts, so when Arne's pleased, he actually has a reason to be.
The good news for us, is that given Marriott's operating track record, there are excellent odds that Marriott will turn many of the Sheratons into nice places to stay (like the many Grand Sheratons currently).
So Insiders, our gameplan; survive the integration (go elsewhere short term if you must), don't threaten to leave even en masse it has an insignificant impact compared to the macro projects Marriott succeeds at, (and besides, in many cases after working so hard to earn status you'd be biting your nose to spite your face), continue sharing tactical ideas for optimizing stays, and that's right... keep on keepin' on, we're going to have more worthwhile product to choose from .