ABTN speaks to Roeland Vos, Starwood Hotels and Resorts’ president of the EMEA region, about future growth across all the hotel group’s brands.
Vos’ role includes directly overseeing the operation of more than 250 hotels and resorts in 60 countries.
Starwood seems to be going through a period of growth, not just in Asia, but also in Europe…
We are growing, and across all of the brands. One of our biggest growth stories is W Hotel. It was a New York phenomena and then it expanded across North America very quickly, and now it has expanded across the world. It took us a while to find the right locations, but now it has built up its momentum. We opened in Istanbul, then Doha, then the W in Barcelona, and London, and in the process W has gone through a lifecycle change about how people think about luxury. These things sometimes start as a real estate game in order to get low end real estate to get high end gains, but now it has morphed into a top end lifestyle brand focussing on luxury and fashion. It’s also such a specific type of luxury that once people get hooked on it they will have difficulty staying with our competitors. So for us it’s very important to get distribution to where these people travel. So we need Barcelona, Milan, Paris and London and once that network has been built up we see it coming to life and people are waiting for it. London was running from 90 per cent occupancy from day one. The place is buzzing all day and night.
Why not convert some Sheratons into W Hotels if they do so well?
You have to be careful making sure you get the right brand, for the right location, for the right property, for the right fit. We’ve put a lot of effort getting the W to be as special as it is so you have to be careful not to spoil that just to get the growth. The next step was opening St Petersburg in April and then after that is Paris at the Opera at the end of the year, and then Milan.
We are also growing the St Regis brand and the Luxury Collection brand. We have five St Regis openings in Europe, Middle East and Africa – one in Florence, two in Abu Dhabi, one in Mauritius and one in Doha. The hotels in the Luxury Collection often have a strong brand name in their own right – The Gritti Palace, for instance. I think one thing that is little known is that between our Luxury Collection Group and the St Regis Group we have more luxury hotels than any other operator in the world – more than Four Seasons, Shangri-la or Ritz-Carlton, for example.
The opportunity for Luxury Collection lies in the fact that coming out of the cycle there are a lot of individual owners who have had those hotels in their family for two or three generations who realise that on their own it will be difficult to compete with all the distribution channels you have now. Some are doing well depending on how they are financed, but they could do better, and when they join, they see the uplift. Think how many hotels in Europe are unbranded. It’s a good opportunity for us. If I think about Westin or Sheraton, we compete with a lot of people, but in this place, we’re quite unique.
What about Sheratons then?
It’s our biggest brand and it continues to grow at an incredible pace, especially in new destinations and emerging markets – lots of places in Africa, the Middle East and Russia. It’s our core brand, our bread and butter in a way. One of the things we have been doing is making sure the inconsistencies in the brand experience around the world were reduced or taken out altogether. If we believe that we are a lifestyle brand which works in the hospitality space, then we need to have consistent brands. So people want similar levels of experience without losing the sense of the local.
We have been pruning our portfolio, taking out a number of hotels where the ownership did not want to bring it up to the standards we were expecting, and we and our owners are putting in $6 billion dollars worldwide into revamping just Sheraton. In the US, 60% are either new, renovated, or in good shape. In our region – Europe, Middle East and Africa – alone across all the brands we have 24 hotels under construction or complete renovation. The same story applies to Le Meridien. Most of the new builds are in new territories, but in February we opened a spectacular Sheraton in Malpensa airport.
And what about Four Points?
We have been extremely successful in secondary destinations with Four Points, but we also have the Aloft brand. We’ve brought Aloft to Abu Dhabi in this region, and then the second one in Brussels which opened in 2010. The next one is in London at the Excel centre, which will open towards the end of 2011. There you have a brand that revamps the three and a half star space with some of the learnings we have taken out of W. Our expectation is that we will sign some region specific deals with developers where we can expand the brand quickly. The build cost and particularly the operating cost is much lower than a Four Points by Sheraton. It has a good room product, good shower, good bed, nice high open windows, and downstairs there is a lively arena. A pool table, table football, music, but no restaurant. Food can be picked from the cafeteria. We can run it with very little staff.
And what about Element, your long stay product?
Element has taken a bit longer. As a long stay product, it’s less of a concept in Europe than in the US. The interesting part of Element is the green component of the brand.
Why not call it Sheraton apartments? Isn’t it confusing calling it Element and it means both green and long stay?
Well it was a spin-off of Westin, which is all about treating yourself and the environment well, and positioned at the five star level. Element from a supposedly design point of view came from that. So it was related to the Westin experience. But we use these new brands as laboratories for new ideas so the green ideas will be used in the other brands.