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Hotel Update: Starwood Hotels & Resorts

May 2, 2015
2015 / April 2015

The past two years brought steady growth for Starwood Hotels & Resorts, opening 74 new hotels across the globe in 2013 followed by another 74 in 2014. The company is expanding its footprint in developing markets such as China, Colombia and Turkey while also renovating some of its most iconic properties in countries like Austria and Italy. As its mid-market brands — such as the stylish Aloft and eco-friendly Element — gain momentum, Starwood continues to debut its upscale and luxury brands in new markets around the world.

AFTER OPENING 33 new hotels in North America in 2013, the most since the global economic crisis began, Starwood enjoyed another strong year in 2014. The United States and Canada — together one of the brand’s most important markets, boasting more than 600 hotels — comprised one-third of the company’s new hotel openings last year.

“Starwood remains extremely bullish about its growth prospects in North America, which is still our largest market, comprising over 50 percent of our existing global portfolio,” said Simon Turner, president of global development, Starwood. “We expect record low supply and growing demand to continue driving growth.”

Four Points by Sheraton San José – Silicon Valley

Four Points by Sheraton San José – Silicon Valley © Four Points by Sheraton

The company’s Specialty Select brands — Four Points by Sheraton, Aloft and Element — lead Starwood’s growth in the region, accounting for about 75 percent of its new hotel openings in North America last year. Four Points by Sheraton opened several new hotels in North America in 2014, including two in San José and one in Nashville.

Aloft opened hotels in new American markets including Detroit, Oklahoma City and Manhattan’s Financial District, while the growing eco-wise brand Element plans to open its 15th hotel in North America this year. Starwood’s upscale brands Westin and Le Méridien entered half a dozen new markets in the United States, and Westin hopes to reach its 125th hotel milestone in North America this year with debuts in cities such as Denver, Austin and San José.

The company’s W Hotels brand continued renovations of several of its North American properties last year, including the W Chicago – Lakeshore and the W Los Angeles – Westwood. Meanwhile, a $24 million renovation will reopen the historic St. Anthony Hotel in downtown San Antonio as a Luxury Collection Hotel this year.

STARWOOD REMAINS THE largest high-end hotel operator in Latin America and increased its momentum last year with expansion in Mexico and Colombia. The opening of Aloft Guadalajara last April marked the 80th Starwood hotel in Latin America, and plans are underway to debut 17 additional properties in the region by 2016.

Mexico leads the region in terms of expansion, with 26 Starwood hotels currently in operation and another eight under development. The company plans to drive growth particularly with the expansion of its Specialty Select brands, increasing the number of its Four Points by Sheraton and Aloft properties by 60 percent over the next three years. In addition to the hotel in Guadalajara, Aloft properties are planned for Mérida, Mexico; Montevideo, Uruguay; and Asunción, Paraguay, by 2016.

In response to growing demand for business and leisure travel in Colombia, Starwood will double its offerings in the country from four to eight hotels by 2016, including a beachfront Sheraton hotel in Cartagena. In 2014, the W Hotel brand debuted in the country with the 168-room W Bogota. Adjacent to the city’s fashionable Usaquén district, the hotel’s distinct style is inspired by the ancient rafts of Colombia’s Lake Guatavita.

Additionally, Starwood recently announced it will return to Bolivia after a 30-year hiatus with the opening of the Sheraton Santa Cruz Hotel, a 150-room property in Bolivia’s largest city.

THROUGHOUT ASIA, STARWOOD is expanding its luxury footprint, particularly in China, where an increasingly affluent market of domestic travelers is creating the demand for luxury brands. Between 2011 and 2014, the company doubled its luxury offerings in China and expects to double them again by the end of 2015.

W Guangzhou wet bar

W Guangzhou wet bar © W Guangzhou

The W Hotel brand debuted in China with the W Guangzhou in 2013, followed by the W Beijing – Chang’an in 2014. The 353-room Beijing hotel serves as the brand’s flagship China property and features 7,545 square feet of meeting space, including a 1,700-square-foot ballroom. Further plans to expand the W brand include hotels in Shanghai, Suzhou, Chengdu, Changsha and Macau.

Starwood also added the 279-room St. Regis Chengdu; the 205-room Azure Qiantang, A Luxury Collection Hotel in Hangzhou; and the 292-room Castle Hotel, A Luxury Collection Hotel in Dalian, to its luxury portfolio in China last year. In 2016, Starwood plans to bring its Luxury Collection brand to Korea for the first time with The Parnas, A Luxury Collection Hotel in the Gangnam District of Seoul.

“While there is increasing demand for luxury hospitality in South Korea, there are limited new opportunities at the highest level,” said Starwood’s Matthew Fry, senior vice president of acquisition and development, Asia Pacific. “The captivating brand proposition of The Luxury Collection coupled with the most sought-after address in Gangnam creates an incredible opportunity to showcase the strength of Starwood’s luxury brands and grow in the upper tier of this market.”

This year, Starwood will introduce its first Luxury Collection property in Japan with Suiran, a traditional ryokan-style inn that will feature 39 guestrooms and occupy part of the Tenryū-ji Temple grounds in Kyoto.

LAST YEAR, STARWOOD announced plans to increase its European hotel portfolio by 40 percent over the next five years, opening more than 60 new hotels and resorts in fast-growing markets such as Turkey, Russia and the Commonwealth of Independent States.

The company is poised to triple its portfolio over the next three years in Russia and the CIS countries with 12 new hotels, including the company’s debuts in Kazakhstan and Tajikistan, as well as seven additional hotels in Russia.

“The surge in infrastructure development in markets such as Turkey and Russia and the success of our mid-market brands across the continent have created favorable conditions for the expansion of all of our brands across Europe over the next several years,” said Turner.

The company’s vigorous expansion in Turkey includes three new hotels that opened in 2013 plus four additional properties slated to open by the end of this year: The St. Regis Istanbul, Four Points by Sheraton Istanbul and two new Sheraton hotels in Samsun and İstanbul. The 160-room Sheraton Istanbul Atasehir will feature scenic views of the Sea of Marmara and a Sheraton Shine Spa with five treatment rooms and an outdoor swimming pool.

The company continued to grow its mid-market portfolio in Europe with the European debut of the Element brand at Frankfurt Airport last year. The Aloft brand will see marked growth by 2016, with plans to enter new markets such as Liverpool, Munich, St. Petersburg and Amsterdam.

In addition, Starwood announced plans last year to invest more than €300 million to continue restorations of some of its most iconic European hotels within the Luxury Collection brand, including the Hotel Imperial in Vienna, Excelsior Hotel Gallia in Milan and Santa Marina Resort in Mykonos.

WITH MORE THAN 15 NEW hotels slated to open over the next five years, Starwood is on track to increase its African portfolio by 30 percent. The Sheraton Kigali, scheduled to open in 2018, will be the company’s first hotel in Rwanda and 50th hotel in Africa. The 136-room hotel, situated in the prestigious Gasabo District, will offer easy access to the city center and key government offices as well as picturesque Lake Nyarutarama.

“The hospitality sector is one of the main industries driving infrastructure development in Rwanda and is also a key foreign exchange earner for the country. We seek to tap into Rwanda’s rapidly growing real estate and hospitality markets, which growth has been spurred on by a rising demand for hotel accommodation resulting mainly from a conducive business environment,” said Billy Cheung Yiu Tung, chairman, partnering company Century Park Hotel & Residences Ltd.

In the Middle East, Starwood plans to grow its portfolio by a whopping 75 percent by 2017 with the opening of 35 new hotels in fast-growing markets such as the United Arab Emirates, Iraq and Bahrain. The company’s second-largest hotel market behind New York City is currently Dubai, where it operates 15 hotels.

Last year, Starwood added 460 rooms to its portfolio in Bahrain with the debut of The Westin Bahrain City Centre and Le Méridien Bahrain City Centre. After nearly two decades, the company will re-enter Iraq with the opening of Sheraton Dohuk, followed by three hotels in Erbil under its Sheraton, Aloft and Four Points by Sheraton brands by 2017.

Aloft
Demographic: Individuals looking for a customizable travel adventure
Offerings: Modern, fresh and fun hotels popping up around the globe
Highlight: Described as “the hub of hip,” the w xyz bars are the perfect spot to meet and mingle in each hotel.

Element by Westin
Demographic: Guests seeking a relaxing, eco-conscious hotel stay
Offerings: 43 eco-friendly hotels opening or coming soon
Highlight: Nature-inspired, eco-conscious hotels with smart, functional layouts and perks like complimentary breakfast

Four Points by Sheraton
Demographic: Travelers in search of style and service at a reasonable price
Offerings: More than $1 billion has been invested to add to the portfolio of 150 hotels in almost 30 countries.
Highlight: In-room extras include complimentary bottled water and Internet access.

Le Méridien
Demographic: Guests seeking modern accommodations with a touch of European elegance from their home away from home
Offerings: More than 100 luxury hotels in more than 50 countries around the globe
Highlight: Le Méridien Hub is the brand’s innovative, re-imagined twist on the traditional hotel lobby.

Luxury Collection
Demographic: Individuals looking for unique experiences; the global explorer
Offerings: A selection of hotels and resorts in more than 30 countries
Highlight: The 75 hotels in the collection are known for their history, architecture, art, furnishings and amenities.

Sheraton Hotels & Resorts
Demographic: Guests looking for a social travel experience
Offerings: More than 500 hotels and resorts around the globe
Highlight: Link@SheratonSM, in every lobby, includes workstations, WiFi, TVs and seating areas; a dedicated fitness program

St. Regis
Demographic: “Modern connoisseurs who desire the finest experiences imaginable”
Offerings: More than 30 St. Regis properties at some of the most global addresses
Highlight: The St. Regis New York opened more than 100 years ago.

W Hotels
Demographic: Guests looking for a balance between independent hotels and the service of major business properties
Offerings: More than 70 cutting-edge hotels around the globe
Highlight: The Wants + Needs program allows guests to give or get whatever they want, when they want.

Westin Hotels & Resorts
Demographic: Travelers focused on well-being, modern design and top-notch service
Offerings: More than 200 hotels and resorts worldwide
Highlight: Rejuvenate with nutrient-rich, healthy menu options and the WestinWORKOUT fitness studios.

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