Hotels

A star is shining

Miguel Ko President - Asia Pacific, Starwood Hotels and Resorts Worldwide Inc

After tasting success in India with their flagship brand 'Sheraton' through an alliance with the ITC Hotels, US-based Starwood Hotels and Resorts is aiming to bring its entire set of brands into the country over the next couple of years. Miguel Ko, president - Asia Pacific, Starwood Hotels and Resorts Worldwide Inc, elaborates on the strategy

Starwood is one of the world's largest hotel and leisure companies. The brand names include St. Regis, The Luxury Collection, Sheraton, Westin, W and Four Points by Sheraton. "Through these brands, we are well represented in most major markets around the world. Our operations are grouped into two business segments, hotels and vacation ownership operations," expresses Ko.

The hotel business emphasises on global operation of hotels and resorts primarily in the luxury and upscale segment of the industry. "We seek to acquire interests in management or franchise rights with respect to properties in this segment." says Ko.

The game plan

Starwood has assumed a leadership position in markets worldwide, based on its superior global distribution, coupled with strong brands and brand recognition. Its upscale and luxury brands continue to capture market share from competitors by cultivating new customers and maintaining loyalty among the world's active travelers.

The brand’s loyalty program, Starwood Preferred Guest (SPG) has over 22 million members since its inception in 1999. SPG, which was the first loyalty program in the hotel industry with a policy of no blackout dates and no capacity controls, and enables members to redeem stays when and where they want. SPG yields repeat guest business due its reward plan for frequent stays and purchasers of VOIs with points towards free hotel stays and other rewards, or airline miles with any of the participating 32 airline programs.

"Our luxury and upscale hotel and resort assets are well positioned throughout the world. These assets are primarily located in major cities and resort areas that management believes have historically demonstrated a strong breadth, depth and growing demand for luxury and upscale hotels and resorts, in which the supply of sites suitable for hotel development has been limited and which are relatively expensive," says Ko.

Ko believes that the diversity of its brands limits the exposure to any particular lodging or vacation ownership asset, brand or geographic region. For example, the St. Regis hotels cater to high-end hotel and resort clientele while Four Points by Sheraton hotels deliver extensive amenities and services at more affordable rates. Ko remarks, "We intend to explore opportunities to expand and diversify our hotel portfolio through internal development, minority investments and selective acquisitions of properties domestically and internationally."

On the horizon

Starwood has identified several growth opportunities with a goal of enhancing its operating performance and profitability. "We are continuing to expand our role as a third-party manager of hotels and resorts, which will allow us to expand our lodging brands. We plan to franchise the Sheraton, Westin, Four Points by Sheraton and Luxury Collection brands to selected third-party operators and licensing the Westin, W and St. Regis brand names to parties in connection with luxury residential condominiums. We are also expanding our Internet presence and sales capabilities to increase revenue and improve customer service,” avers Ko.

To further strengthen its brand identity, the group will continue to build the ‘W’ hotel brand to upscale business travellers. “By placing things like Bliss Spa and Bliss branded amenities in ‘W’ hotels and expanding the brand to resorts in non-urban areas, we can offer a whole package to customers. Innovations such as the Heavenly Bed and Heavenly Bath, the Sheraton Sweet Sleeper Bed, the Sheraton Service Promise, and the Four Points by Sheraton Four Comfort Bed will also facilitate growth,” explains Ko.

Starwood plans to increase its frequent guest program, thereby increasing occupancy rates, while providing customers with benefits based upon loyalty. "We will enhance our marketing efforts by integrating our proprietary customer databases, so as to sell additional products and services to existing customers, improve occupancy rates and create additional marketing opportunities. We will also optimise the use of our real estate assets to improve ancillary revenue, such as condominium sales and restaurant, beverage and parking revenue from our hotels and resorts," says Ko.

On an India specific note, first on its cards is a 300-room Westin at Gurgaon, scheduled to open next year, and the group will further expand the Westin brand to Bangalore and Mumbai. The group is also keen to introduce the 'W' brand in key metro cities like Delhi, Mumbai and Bangalore, the 'Four Points' in Pune, Ahmedabad and Hyderabad, and 'St Regis' brand in Goa. The group also plans to bring its newly announced but yet to be introduced budget brand 'aloft' in the Indian market shortly. However, all projects are at a negotiation stage and expected to be finalised soon. "We are presently exploring the possibility of opening a development office in the country. We are also opening a sales and marketing office in India," says Ko.

Ko believes…

India and China are markets of the future. "With tourism and hospitality booming, and arrivals rising exponentially, the demand for rooms will increase and therein lies the opportunity for hotel companies vying for a share of the Indian hospitality market. We would like to seize the opportunity," explains Ko.

In its initial foray along with ITC Hotels, Starwood opted for the franchise route, now however, its looking at increasing presence in India through the management route with a maximum of 26 per cent equity participation depending on the viability of the projects, as that will be route most international companies will opt for in their foray into the Indian market.