Could Marriott Buy Rosewood? I’m Skeptical Of The Rumors, But…

This seems somewhat unlikely to me, but I think it’s at least worth addressing the rumors, as I’ve now had several people forward this to me…

Rumors of Marriott acquiring Rosewood Hotels

A FlyerTalk user shares what’s allegedly a leaked screenshot of a document for the legal team, which suggests that Marriott may be looking to acquire luxury hotel group Rosewood. While it’s only a partial screenshot, the text states that it “pertains to a critical strategic acquisition initiative” named “Project Pegasus” that’s “currently under development by Marriott International.”

The note continues that “the purpose of this communication is to formally task our team with the preparation and submission of all required legal documents to the U.S. Federal Trade Commission (FTC) and Department of Justice (DOJ) to secure their approval prior to the deadline of February 28.”

Let me emphasize that I can’t personally vouch for the accuracy of this. The language is definitely strange, but then again, this is an international transaction, so who knows exactly which legal time is working on this.

For those not familiar, Rosewood is a fast growing ultra-luxury hotel group, which currently has around 40 properties, and a similar number of hotels and resorts in the pipeline. The brand has some spectacular properties, and is probably most directly a competitor to Four Seasons (with properties generally having a little more sense of place, on average).

Rosewood is owned by Hong Kong-based New World Development (NWD), a real estate conglomerate led by the Cheng family. Rosewood is actually largely an investor in its properties, so it’s not simply a hotel group with an asset light strategy (unlike most of the major global hotel groups).

NWD has reportedly been dealing with liquidity issues in recent times, and a few weeks back there was talk of how Rosewood may be looking to unload some assets, but not sell the Rosewood brand overall. Of course when you’re a real estate giant, the situation can evolve pretty quickly, and I imagine if the price is right, it’s at least going to be considered.

One thing worth mentioning is that Rosewood CEO Sonia Cheng is incredibly passionate about the hotel group, and I can’t imagine she’d be very happy about this, because she has dedicated years to making Rosewood to what it has become. For her, it’s clearly a company she loves. Who knows, maybe part of the deal is that she stays on and runs the brand under Marriott (though I can’t imagine she’d find it as fulfilling).

This would be a major development for both brands

Marriott has an asset light strategy, so presumably if Marriott were to acquire Rosewood, it would almost immediately try to unload the properties, as this deal would be about adding Rosewood properties to Marriott’s portfolio. This isn’t that different than Hyatt’s recent acquisition of Playa, which also owned many properties, as Hyatt bought the company, and then turned around and sold the properties.

There’s no denying that adding an ultra-luxury hotel collection to one of the major global hotel groups would be a major win for that hotel group, and would help with loyalty revenue. It’s anyone’s guess if the properties would participate in Marriott Bonvoy, and if so, to what extent.

While I generally love the idea of more opportunities to earn and redeem points for luxury hotels, Marriott is simply so bad at actually caring about guest experience, and I can’t help but be sad at the prospect of this, as it would almost certainly lead to a great reduction in quality of Rosewood’s portfolio.

Rosewood has done a fantastic job actually investing in guest experience, and there’s no denying that there would be a Ritz-Carlton effect if Marriott had control (and that’s not a good thing).

So I guess if Rosewood were to be acquired, can I humbly suggest that Hyatt at least make an offer as well, as I think that would do more to preserve the quality of these hotels? Hyatt has been going so heavy on all-inclusives, and I’d love to see some more focus on true luxury properties.

Bottom line

A rumor suggests that Marriott may be looking to acquire luxury hotel group Rosewood. This is based on an alleged leaked document that suggests the legal team is preparing for this. On top of that, we know that Rosewood’s owners have been dealing with some liquidity issues.

It’s anyone’s guess if this is all true, and if so, if this will actually go through. Rosewood’s owners insisted several weeks back that they were looking to possibly unload some properties, but not sell the brand overall.

Rosewood has done an incredible job growing with some special properties, and as much as I like the idea of being able to earn and redeem points at these hotels, I can’t imagine they would be anywhere close to as good if they were managed by Marriott. So we’ll mark this as “developing” for now…

What do you make of this Marriott & Rosewood rumor?