MUMBAI: The Competition Commission of India (CCI) has given its nod for acquisition of Starwood Hotels and Resorts by Marriott International, setting the stage for the Marriott and Starwood combine to create a hospitality behemoth in India.
Marriott International's acquisition of Starwood Hotels & Resorts Worldwide for $12.2 billion would enable the combined entity to not only create the world's largest hotel chain but also the biggest hotel chain in India by rooms, displacing Tata Sons-promoted Taj group of Hotels.
In a tweet, the Competition Commission of India (CCI) said it has approved the acquisition of Starwood Hotels & Resorts Worldwide by Marriott International.
CCI considered the hotels and hospitality industry in different Indian cities as the relevant market while looking into the deal.
"The hotel market in India is well established and presents innumerable choices to its customers. New entrants like branded hotel aggregators ZO, OYO rooms etc offer quality, standardised services at economical prices. Additionally, these aggregators offer an online reservation platform that allows access to consumers across the world. Similarly, several hotels, across price points and star categories are listed on online travel portals like Yatra, Makemytrip etc. Resultantly, there are several options available to the consumer in the Indian market and consumers enjoy a countervailing bargaining power," CCI said.
A narrower market definition of 4-star and 5-star category hotels in different cities in India was also considered. Due to the presence of well established players and choices available in the 4-star and 5-star category, CCI noted, each player is subject to competitive constraints from its competitors.
The deal is expected to be completed by mid-2016. Post the deal, the Marriott-Starwood combined entity would have more than 5,500 hotels spread across 100 countries. Both the hotel chains operate upscale hotel accommodation and related services under different brand names in India. Neither Marriott nor Starwood own or lease any hotels in India.
The luxury market in India will turn much more competitive as a result of the merger as both Marriott and Starwood have a very strong presence not only through their marketing and reservations networks but also their customer loyalty programmes. Both the companies are working out on integrating all aspects of the business - development teams, brands, loyalty program and distribution network.
Industry experts said this deal is a precursor to more mergers and acquisitions to come as hotel chains focus on size and scale to compete with each other as well as online travel agents and aggregator models that have disrupted the industry. Recently, French hotel major AccorHotels acquired the owner of the Fairmont, Raffles and Swissotel hotel chains for $2.9bn, in the second major hotel takeover last year.
Marriott International's acquisition of Starwood Hotels & Resorts Worldwide for $12.2 billion would enable the combined entity to not only create the world's largest hotel chain but also the biggest hotel chain in India by rooms, displacing Tata Sons-promoted Taj group of Hotels.
In a tweet, the Competition Commission of India (CCI) said it has approved the acquisition of Starwood Hotels & Resorts Worldwide by Marriott International.
CCI considered the hotels and hospitality industry in different Indian cities as the relevant market while looking into the deal.
"The hotel market in India is well established and presents innumerable choices to its customers. New entrants like branded hotel aggregators ZO, OYO rooms etc offer quality, standardised services at economical prices. Additionally, these aggregators offer an online reservation platform that allows access to consumers across the world. Similarly, several hotels, across price points and star categories are listed on online travel portals like Yatra, Makemytrip etc. Resultantly, there are several options available to the consumer in the Indian market and consumers enjoy a countervailing bargaining power," CCI said.
A narrower market definition of 4-star and 5-star category hotels in different cities in India was also considered. Due to the presence of well established players and choices available in the 4-star and 5-star category, CCI noted, each player is subject to competitive constraints from its competitors.
The deal is expected to be completed by mid-2016. Post the deal, the Marriott-Starwood combined entity would have more than 5,500 hotels spread across 100 countries. Both the hotel chains operate upscale hotel accommodation and related services under different brand names in India. Neither Marriott nor Starwood own or lease any hotels in India.
The luxury market in India will turn much more competitive as a result of the merger as both Marriott and Starwood have a very strong presence not only through their marketing and reservations networks but also their customer loyalty programmes. Both the companies are working out on integrating all aspects of the business - development teams, brands, loyalty program and distribution network.
Industry experts said this deal is a precursor to more mergers and acquisitions to come as hotel chains focus on size and scale to compete with each other as well as online travel agents and aggregator models that have disrupted the industry. Recently, French hotel major AccorHotels acquired the owner of the Fairmont, Raffles and Swissotel hotel chains for $2.9bn, in the second major hotel takeover last year.
Hello, my name is Godwin Brain. I'm an ICT Analyst, blogger, web-designer and a writer. 
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