Starwood Plans New Midprice Brand

Starwood Hotels & Resorts today announced plans to launch a new midprice brand as another competitor to Marriott International's Courtyard and Hilton Hotels Corp.'s Hilton Garden Inn brands. Starwood officials anticipate the first "Project XYZ" properties to open in early 2007, potentially in Cambridge, Mass., Minneapolis, Raleigh-Durham, N.C., Palo Alto, Calif., and Tampa, Fla.

Chain officials positioned XYZ as a midprice version of its upper upscale W brand, with more emphasis on amenities and design than other midprice brands, including its own Four Points. Starwood senior vice president of development Chuck Tomb said the company plans to compete head-to-head with established midprice brands as it looks to develop in markets where Courtyard by Marriott and Hilton Garden Inn have established a presence. The new brand also would compete on price, with an introductory average daily rate between $100 and $125. Tomb said the company later this summer or in early fall will announce a name for the brand.

"With the DNA of W, XYZ will democratize design, and offer guests an environment that is extraordinarily social, striking a chord with travelers who crave style and fun on the road, even beyond the boutique trifecta of New York, Miami and Los Angeles," said Starwood CEO Steven Heyer in a company release.

Heyer, during the 27th Annual International Hospitality Industry Investment Conference in New York, this morning said Starwood also is exploring the development of an extended stay brand, but would not give details.

Starwood officials said the introduction of XYZ was sparked by "developers looking to build a W-inspired product at a lower price point," according to a company release. Starwood claimed it has received letters of interest from more than one dozen developers to build more than 100 properties, including a joint venture between Canyon Capital Realty Advisors and Earvin "Magic" Johnson to build XYZ properties in urban sections of Chicago, Los Angeles, Miami, New York and San Diego.

Each planned XYZ property would offer full wireless capability, flexible meeting space and what Starwood called "private business booths" for color printing, presentation design and Internet access. Each hotel is expected to include between 90 and 180 guest rooms, each resembling a loft and featuring oversized windows, storage space and large bathrooms with walk-in showers. XYZ properties also will feature extensive public space.