With the acquisition of Le Méridien brand and the launch of several new brands in the upper midscale segment and the extended stay market, Starwood Hotels & Resorts is one of the most dynamic hotel companies of the 21st century. Roeland Vos is expressing the will to pursue development with a new aggressive position in the select midrange market.
{{HTR Magazine: You have almost completed your 5-billion$ programme of assets disposal. Do you firmly believe that a worldwide hotel group should not be at the same time owner and operator of hotel properties? If so, what are the major reasons for this separation? Or is it more a tactical decision based on the high level the real estate market with the opportunity to make major capital gains by selling these assets?Starwood Hotels & Resorts unveiled its new extended-stay hotel brand: Element, formerly known by its working title Project ESW. This new concept will redefine extended-stay hospitality, incorporating smart design, modern style and a social environment into a category often associated with look-alike brands and generic features. “With Westin, we recreated the upper-upscale segment in the hotel industry,” explained Starwood’s Chief Executive Officer Steven J. Heyer. “We know that Starwood’s guests are hungry for a new kind of extended-stay experience, and Element fills this white space in our portfolio perfectly. The name really gets at what we are aspiring to : a new approach that will offer guests a brand experience, not just a hotel.” A dramatic multi-story window-wall will flood Element’s lobbies with natural light. Public spaces will also include a tranquil water feature and design touches inspired by nature. It will also incorporate an outdoor haven, with a courtyard and patio where guests are invited to socialize and relax by an outdoor fire pit and barbeque. According to Starwood, Element has been attracting significant developer interest. The brand will be introduced in major destinations throughout the world. Starwood anticipates that there will be 500 Element hotels worldwide. Furthermore, besides the development of Aloft, a more affordable version of the W concept, Starwood is said to work on a new midscale brand to face the franchise development of competitive brand such as Fairfield or Hampton www.elementhotels.comRoeland Vos :}} We are actively pursuing our “asset right” strategy. We do not want to be asset light but get the right balance between ownership and management or franchise in order to better develop our brands in all key market. In this way, the asset right approach enables us to unlock capital to pursue other transformational projects for our company – for instance, acquiring other strategic assets, investing part of the proceeds in transformational capital projects for other owned assets we have retained, or acquire hotel groups like Le Meridien. Secondly, the disposal of assets has been crucial to our brand strategy. We have retained long term management agreements in all cases and, in addition, the sale to a new owner means that these assets will now get the investment needed to bring them in line with our brand standards.{{HTR: Will your new developments be based mostly on management contracts and franchising, or do you consider that you should still invest in new constructions and/or acquisitions of existing buildings to secure strong position in certain areas?R.V. :}} We review all opportunities and look for the correct fit. Obviously we cannot invest in every project and grow at a pace we aspire, but we certainly will continue to invest if the deal makes strategic and financial sense. On the other hand, management and franchise contracts enable us to grow in many different regions with many different partners.{{HTR : Alone or in association with a financial institution, could you be interested in acquiring other hotel operators, as Starwood did with Le Méridien? Have you identified such companies in Europe or worldwide that could complement your portfolio of brands?R.V. :}} We are always on the look-out for the right opportunity with the right fit. You will understand that I keep a discreet approach on the matter.{{ HTR : If you had not acquired Le Méridien, your hotel supply would have been steady. Is it difficult for Sheraton, Four Points, Westin, W and the Luxury Collection to find new opportunities for development, specially in EMEA where the competition is fierce in the upscale segment?R.V. : }} Not at all, actually there is growth in hotel room supply, and quite a lot of it. Our pipeline of deals is bigger than ever before indicating the tremendous demand for our brands. We compete in a very specific segment of the hotel industry (namely, the upper tier) and we get more than our fair share of signings in the market space where we play. We will continue to grow our team in size in order to meet the growing demand.{{HTR : The majority of your hotels are under lease or management contracts with approximately one third of the total supply managed by franchisees. Is it a balance you intend to keep, at least in your territorial area?R.V. :}} We are open to franchising and remain interested in developing this with the right partners. We have very aggressive plans to play in the select service segment of the industry with our new brands: Extended Stay by Westin* and Aloft. Much of the growth of these select service brands will likely come in the way of franchising.{{HTR : Through its various brands Starwood Hotels & Resorts is strongly present on the various segments of the upscale market, from first class to luxury. Would you be interested in developing a mid-market brand, with limited services, to balance your portfolio?R.V. :}} We have recently announced Aloft, a new brand based on the W concept that is going to operate in the midmarket and we are very actively developing it in all areas of the world. We want to position our brands clearly to our customers and we feel we have ample margins of growth in all market segments{{ HTR : Could the new brand Aloft have room for development in Europe and the Middle East, or is it a typical American concept?R.V. :}} Aloft has a huge potential for growth in every region of the world as it capitalises on strengths of W. W has now many deals announced this year, including not only the W Barcelona, but also the W Istanbul, W Athens, W Dubai and W Doha, with a strong pipeline. It has taken us a moment to grow the pipeline in this part of the world as we are looking for the right deals to materialize, but now it is really pumping. We expect this to continue.{{HTR : Do you think that the European image of Le Méridien could help Starwood to broaden the scope of its clientele who appears to be very American?R.V. : }} We are an international group and already Starwood’s clientele is global. In fact, in EAME, our clientele is predominantly European. With the acquisition of Le Meridien, we find a great complement to our base of clientele because, apart from LM’s European heritage, the brand’s footprint has limited overlap with the heritage-Starwood footprint.{{HTR : Do you have plans to increase your presence in the emerging countries of the former Eastern block and in the Gulf states?R.V. :}} Yes indeed. As a matter of fact, we have redeployed our Development team to focus on these areas specifically. We now have dedicated development support for the Gulf based in Dubai, and 5 developers covering Eastern Europe.Element Hotels, a brand extension of Westin Starwood Hotels & Resorts unveiled its new extended-stay hotel brand: Element, formerly known by its working title Project ESW. This new concept will redefine extended-stay hospitality, incorporating smart design, modern style and a social environment into a category often associated with look-alike brands and generic features. “With Westin, we recreated the upper-upscale segment in the hotel industry,” explained Starwood’s Chief Executive Officer Steven J. Heyer. “We know that Starwood’s guests are hungry for a new kind of extended-stay experience, and Element fills this white space in our portfolio perfectly. The name really gets at what we are aspiring to : a new approach that will offer guests a brand experience, not just a hotel.” A dramatic multi-story window-wall will flood Element’s lobbies with natural light. Public spaces will also include a tranquil water feature and design touches inspired by nature. It will also incorporate an outdoor haven, with a courtyard and patio where guests are invited to socialize and relax by an outdoor fire pit and barbeque. According to Starwood, Element has been attracting significant developer interest. The brand will be introduced in major destinations throughout the world. Starwood anticipates that there will be 500 Element hotels worldwide. Furthermore, besides the development of Aloft, a more affordable version of the W concept, Starwood is said to work on a new midscale brand to face the franchise development of competitive brand such as Fairfield or Hampton www.elementhotels.com
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