Hoa Sen University

Vatel Program – Hotel & Tourism Business School

FINAL ASSIGNMENT
FOREIGN LANGUAGE II
LAN 201

Student: Nguyen Anh Tuan

Class MA2-2019
Date:14/10/2021
1. M&A activities are indispensable in the hotel industry. Please analyze one
specific case and discuss its advantages and disadvantages. Also, please make a
research-based prediction about the possiblity of M&A activities in the hotel industry in
Vietnam under the impact of Covid-19 in 5 years from now.
Mergers and Acquisitions (M&A) are a common opportunity to broaden business across
fields in a short amount of time (acquiring/merging previously existing business possibilities)
as opposed to organic development (using one's efforts and resources to create a new
business opportunity). M&A benefits companies in terms of size, cost reductions, cheap
taxation, product enhancement, and low cost of financing, among other things. However,
firms may suffer as a result of overpayments, delayed integration, and bad strategy, among
other things. This assignment will discuss more details about mergers and acquisitions
(M&A), some M&A cases and the future trend of hotel industry in Vietnam due to the
pandemic.
The most recent is the merger project of the two largest hospitality companies in the world
that occurred in 2015 between Mariott and Starwood Hotel. Marriott International has
become the world's largest hotel chain as a result of its $12 billion acquisition of Starwood
International. The combination will result in a global hotel company with over a million
rooms. According to Marriott executives, the transaction was undertaken in order to appeal to
younger generations and create new technology marketing methods. After the transaction,
Marriott will be leading the new company, and the newly united company's performance will
be enhanced by capitalizing on the combined capabilities of both influential chains. Because,
The deal ensures that the combined enterprise would have more than 5,500 hotels around the
world. It would enable Marriott a broader position in Asia, Europe, and Latin America,
allowing it to compete with companies like Airbnb, TripsAdvisor, Agoda, etc. which
provides apartment-sharing options.
While the merger provides many benefits to Marriott, it also introduces some new problems.
When Marriott first introduced the arrangement, it did not provide as liberally as Starwood
properties in terms of complimentary breakfast for elite members. That was definitely off-
putting. To top it all off, it didn’t even guarantee late checkouts for the guests which further
disappointed the loyal SPG members. This is certainly an issue for Marriott, since things
haven't gone well for Starwood devotees who have become accustomed to these services.
Starwood provided its customers with Platinum status, as well as premium amenities and
extravagant room & suite upgrades. Marriott, on the other side, has always been anchored on
the system of providing credits or points to customers that can be used for future visits. It's
not doing anything to satisfy the club's top members. Marriott must use extreme caution in
this area. Even though the purchase is successful, Marriott will have the mathematical
challenges in maintaining balance between the two sets of status levels. Achieving such
concord will necessitate exchange rate on both sides. In this regard, it will be required to
handle the information of about 110 million clients without missing their data. Unless done
carefully with trained personnel and the appropriate software, this truly is a Herculean effort.
The next stage would be to use big data analytics to go into and learn about client history,
interests, stay patterns, meal preferences, and etc. Other major difficulty that Marriott faced
following the acquisition was quality difficulties. The Starwood acquisition has added a huge
number of iconic properties to Marriott's property that should have been eliminated long
before the combination. In terms of creativity and cool atmosphere, the hotel giant Marriott is
facing yet another challenge from Airbnb. It competes with Marriott by attracting travelers
with unique and intriguing local values and traditions. Again, it is business-friendly and cost-
effective.
In Vietnam, thousands of hotels for sale have been noticed in Vietnam's large cities in recent
months, as the current wave of the Covid-19 continues to damage the country's hospitality
industry. In that circumstance, some entrepreneurs have taken advantage of possibilities to
acquire properties for purchase in Vietnam at discounted rates, particularly as a result of an
expanding movement of foreign investors into Vietnam's hospitality industry through Merger
and acquisition. The Vietnamese hospitality sector is similar to all other international market
which have suffered greatly in recent years. There are two major categories: city hotel for
business passengers and resort and leisure hotels. Due to air immigration restrictions and
border bans, foreign visitor interest is now practically nonexistent. Nevertheless, occupancy
of hotels located in both Hanoi and Ho Chi Minh City has increased by about 6% annual
growth, along with an increase in room prices, since hotels are increasingly used as isolation
centers. Many resorts have also profited from this minor support at a difficult time.
While numerous significant hotel deals are happening, the hotel chains beneath international
management contracts and with strong property owners remain steady without dramatic
discounting. In these situations, the investors and operators have a long - term investment
plan, can survive the pandemic with solid cash resources, and look forward to reopening of
the hotels. However, in the micro hotel market, as Vietnam has a large number of, operators
who rely on hotel income for operating cash are hurting and may be looking for exits. These
small enterprises with a strong domestic orientation are the ones who are at risk. There are
undoubtedly reasonably priced properties in tourist attractions. Prior to the pandemic,
Vietnamese tourism was slowly growing, so we suddenly witness worldwide M & A that
would have been in the works for a long time.
To summarize, I predict that there will undoubtedly be 'revenge tourism' which will return
Vietnamese hospitality to its former glory. Because the general public now has financial
reserves ready to be spent and strong desires to go everywhere, hospitality will grow once
again. Whiplash healing is widely established in the United States and Europe. In certain
areas, hotel room prices are five times more than before the epidemic. The problem is that
with a five-star hotel pricing, travelers anticipate exceptional treatment, especially post-
containment. However, in the United States, many hospitality workers are simply refusing to
return to work. This causes major issues with the delivery of high-quality services. The
domestic tourism orientation is an advantage of Vietnam hotel industry. Vietnamese visitors
are typically more tolerant, and they will be able to accept minor adjustments as the hotel
industry expands. There seems to be no question that the future of Vietnam tourism is bright.
Global companies keep making significant investments in Vietnam, and there is a frenzy of
construction across the region, with the coastline being nearly completely occupied. Well-
informed local businesses, such as Wink Hotels, continue to set a goal of 20 new openings
within next five years. Tourism may continue to be underwritten by the wealth impact
flowing through to the greater Locals, with very high growth predicted from foreign tourists.
It's only a matter of how much further we have to wait, like with all areas of the hotel.