Marriott takes over Design Hotels: what to expect?

Marriott plans to take control of 100% of the capital of Design Hotels, of which it is already a 95% shareholder. We would like this to mean a significant improvement for customers but nothing is less certain.

Design Hotels : not a real hotel group

Design Hotels is a German group of independent hotels, each with its own personality. The word group is very important. Indeed, Design Hotels is not the owner of these hotels, nor does it operate them.

For an independent hotel it is sometimes difficult to exist in front of the big chains, even if it offers a service of equivalent quality.

Indeed, many travelers, especially premium customers who travel a lot, have a brand or loyalty program reflex. They go to the chains they know and/or where they are members of a loyalty program that gives them interesting advantages.

It is difficult for an independent to fight against the Hilton, the Meridien or the Sheraton which is opposite when it will offer a faithful customer an upgrade, a lounge access etc.

And yet, understandably, many independents do not want to join a chain in order to preserve their DNA. They refuse to have codes imposed on them that are not their own, and that is perfectly respectable. So even if we have seen in recent years the large hotel groups develop umbrella brands for this type of property (Autograph Collection, Tribute Portfolio at Marriott for example), allowing them to keep their identity, it is understandable that many independents do not want to be obey to a parent company.

This is the purpose of Design Hotels, which is more a group of hotels on a voluntary basis than a hotel group. By the way, the hotels are “members of Design Hotels” which says a lot about what it means.

Design Hotels allows these hotels to enjoy a common visibility, marketing and booking center. This way someone who liked one Design Hotel might like to go to another on another stay and the central reservation system gives the customer more choice than if each independent lived on its own, which gives more visibility to each member.

In short, Design Hotels is more of a hotel marketing business that brings together hotels with similar values than a hotelier like Accor, Marriott or Hilton.

Today, Design Hotels has more than 300 hotels in about 50 countries.

Marriott’s gradual takeover

In 2011 Starwood took 72% of Design Hotels and integrated these hotels into its inventory which gave even greater exposure to its members. After buying Starwood, Marriott increased its stake to 95% and now wants to increase it to 100%.

What does it change? A priori nothing for Marriott because at 72 or 95% one can already consider having total control over a business. And for the customers? We don’t believe this either and we explain why.

A very inconsistent experience at Design Hotels

Once integrated into the Starwood and Marriott inventory, Design Hotels members are visible to loyal customers of the world’s largest hotel chain. An important asset.

Yes, but this does not come without a quid pro quo. One of the most important is to honor the Starwood and Marriott loyalty program because this is what determines the customer’s choice. We saw this with Accor, which bought brands at will, and also tried deals with independents, but without integrating them into its loyalty program. A strategy doomed to failure because no member of its loyalty program would have chosen a hotel that would not give him any benefit, even if it was referenced in the Accor reservation system. As for the hotels bought by Accor that took years to integrate the loyalty program…same punishment.

But the gap between the promise and the reality was sometimes important. Some Design Hotels were given the option of not fully implementing the loyalty program (which was mentioned on the website). Others said nothing but did nothing less and blithely forgot some of the benefits due to loyal customers, including upgrades.

In fact, at TravelGuys, as (very) loyal customers of Starwood and then Marriott, we have had a wide range of experiences at Design Hotels, from the worst to the best. An irregularity that made us gradually avoid Design Hotels.

Among the best is my stay at the Altis Belem in Lisbon. A year later, Olivier had a totally opposite, catastrophic experience (about which he has not yet written, as he was very angry). The worst was Klaus K from Helsinki (who has since left Design Hotels) with an average first stay and a catastrophic second. You will find here all our reviews of Design Hotels.

Design Hotels: an illegible brand at Marriott

In addition to a very erratic quality of service and execution of the loyalty program, the Design Hotels brand was very unreadable.

Design Hotels came under the control of Starwood and then Marriott, but as the very fact of being Design Hotels is on a voluntary basis and without major specifications, some hotels, as we have seen, have played with the rules of the loyalty program and others members of Design Hotels, preferred not to join the group’s inventory and not be offered to its customers so as not to have to respect its guidelines, especially with regard to loyal customers.

In addition, we saw some hotels joining Design Hotels, others leaving without notice. From the customer’s point of view, it became incomprehensible: here a limited application of the loyalty program, there a Design Hotel that does not even recognize the members of the loyalty program and only sells its rooms directly, and elsewhere a hotel to which one was accustomed that suddenly disappeared from the inventory while remaining Design Hotel.

In short, a beautiful mess.

And now that Marriott will own 100% of Design Hotels?

As a customer, should we be happy about Marriott’s total takeover? To tell the truth, we don’t know what to think.

Marriott as well as Starwood before are known for not bantering with the application of their loyalty program and it was always hard to understand the Design Hotels exception. We’ve always been in favor, if we were Marriott, of developing Autograph Collection or Tribute Porfolio and totally dropping Design Hotels. That’s not the way it was done.

We don’t think that owning only 72 or 95% of Design Hotels prevented Marriott from bringing hoteliers to heel and we don’t see what owning 100% will change. At this level it is a question of will, not shareholding.

Perhaps the total takeover will allow Marriott to remove the free rides and force hoteliers to respect the rules of its loyalty program? Yes, but in this case, as the hotels are not owned by Design Hotels, we can expect a wave of defections from the hoteliers.

In short, as customers we remain vigilant and this announcement does not reassure us especially because there were already ways to do better before and we do not see why it would be better after.

In short, let’s wait, beyond the announcements, to see if Design Hotels finally comes into line and deserves the visit of Marriott customers.

Photo : Altis Belem Lisbon Spa , a member of Design Hotels, (c) Travelguys