COMPANY FOCUS: Stellar Starwood
Starwood Hotels & Resorts has been continually gaining momentum and with extensive growth planned, the company could be about to go into orbit.
Starwood Hotels & Resorts Worldwide looks intent on becoming synonymous with the word growth. The company opened 74 new hotels in 2013, representing around 16,200 rooms in 22 countries, and signed a further 152 new hotel agreements in the same year — it’s fourth consecutive year of increased signings and the highest number of new hotel deals since 2007. Starwood also signed 75 contract renewals, up nearly 34% from the previous year.
In its fourth quarter 2013 Earnings Summary, the company revealed a 4.9% increase in worldwide systemwide RevPAR for same store hotels and exceeded profit expectations. And with another strong year predicted across all of its nine brands, it is little wonder president and CEO Frits van Paasschen is ebullient.
“There is a global travel revolution underway, and the secular trends of rising wealth, rapid urbanisation and increasing digital interconnectivity make us as confident as ever about demand for high-end travel,” he says.
“As the largest high-end hotel company in the world, with a penchant for innovation, an unmatched portfolio of design-led brands, global properties and a valuable pipeline, Starwood is well positioned to benefit disproportionately from these seemingly unstoppable growth trends.”
Of the financials. Van Paasschen adds: “We ended 2013 with a balance sheet in the best shape it’s ever been and during the year we returned over half a billion in capital to shareholders through share repurchases and our dividend. From what we are seeing, the year 2014 looks to be a better version of 2013”.
President of global development Simon Turner says growth opportunities lie in the group’s “highly sought after brands, backed by the collective strength of our global platform and experienced, local teams”, which set Starwood apart from the competition, “allowing us to deliver unmatched value to our hotel owners”.
Going forward, his focus remains on finding “the right partners, creating the right properties, in the right places”.
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MIDdle EAST 2014
The “right properties” for the Middle East in 2014 are eclectic and there will be nine new hotels and nearly 3000 rooms across the region by the end of the year.
Starwood made its debut in Ajman, the smallest of the emirates with the opening of Ajman Saray, A Luxury Collection Resort. It is increasing its presence in the Holy City of Medina with Sheraton Medina and Four Points by Sheraton Medina.
Dubai will see the 660-room Sheraton Dubai Tower Sheikh Zayed Road open its doors, while in Lebanon, Grand Hills, A Luxury Collection Resort, a conversion signed last year will undergo a refurbishment.
The Aloft brand will make its debut in Saudi Arabia next year with the 238-room Aloft Riyadh and the company will open its first properties in Iraq (Sheraton Dohuk), Tajikistan (Sheraton Dushanbe) and Kazakhstan (Sheraton Aktobe).
“Along with new openings, we are undergoing renovations in nearly 25% of our properties in the region, mainly across the Sheraton and Le Méridien brands,” Guido de Wilde, senior vice president, regional director, Starwood Hotels & Resorts Middle East tells Hotelier.
Starwood will also be adding another 200 rooms to the renamed Le Méridien Dubai Hotel & Conference Centre by Q2, 2014, and 238 rooms to Four Points by Sheraton Kuwait.
However as the market loosens its belt with the amount of product coming online, there is a real need to diversify.
“Starwood is setting its sights on expanding mid-market brands in secondary and tertiary markets in the region where there are opportunities to grow reliable and affordable hospitality,” Wilde explains.
“Our mid-market brands represent 30% of our development pipeline in the Middle East.”
Part of this can be seen in signings of Aloft Erbil and Aloft Sharjah, both of which will open in 2015, and mark the debut of the brand in Iraq and Sharjah. Scheduled to debut in 2016, Aloft Al Ain will be the first Starwood property to open in Al Ain and the second Aloft hotel in the UAE joining Aloft Abu Dhabi, which opened in 2009.
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DELIVERING DIGITAL
While expanding into tertiary markets provides its own challenges, Starwood’s “next big bet” is digital innovation, which is not to say the company hasn’t already invested heavily in the sector.
Starwood lauds itself on being the first in the industry to launch unedited ratings and reviews, and the first to build an iPad App on Apple’s new iOS7 — all within the last 12 months.
In June 2013, 42% of Starwood’s site visits were through mobile and by 2015, the company expects interaction with guests via mobile to surpass that via desktop.
“There are now more bookings through our digital channels than through any other non-property direct channel,” says de Wilde.
Looking ahead, Starwood is focused on leveraging technology on-property — mobile and emerging tech will impact virtually every aspect of business, from guest experience to the way hotels are operated, and internal communication.
This will allow the company to attract the ‘mega traveller’.
“Mega travellers spend 50-100 days a year in hotels and their spending has tripled in the last five years and is set to increase,” explains de Wilde.”
This combination of strong market dynamics and innovation has put Starwood in a phenomenal position for continued growth.