Starwood Puts Foot Down On Noncomplying Properties

<B> Starwood Puts Foot Down On Noncomplying Properties</B>

By Cheryl Rosen

Entering a new millennium expected to bring a weakening hotel market, Starwood Hotels & Resorts Worldwide plans to put some teeth in its national corporate accounts program next year by cracking down on properties that do not fully comply. The focus will be twofold: to gain the allegiance of all properties to corporate programs that may not directly benefit their bottom lines, and to ensure that all rates listed in the global distribution systems are in fact the guaranteed lowest available, said Starwood vice president of global corporate sales Paul Gottwald.

For years, corporate travel buyers have decried the inability of national and global sales offices to get all their properties--particularly their franchised properties--to go along with the details of contracts signed at the national level. While a number of travel managers cited Starwood's ability to bring most of its properties to heel, Gottwald said the company now will get even tougher on the side dealing that leads to mistrust.

"Some of these properties do make side deals, where they give the global team a rate of $100 and then negotiate a separate little deal with the local office of a company, saying that if they call the hotel direct, they'll give them a $90 rate," Gottwald said. "Now we're saying the point is to get one rate in the GDS. The whole premise of the Global Preferred program is to have rate integrity, so the client feels secure about getting the lowest rate. We're saying either you maintain our standards, be they on corporate rate or on physical condition of the property, or we'll take our name off your hotel. Going into a soft market, the better condition the product is in, the better able we will be to weather it."

Corporations, too, will be expected to live up to their promises, Gottwald added. Starwood now is pulling together its review of the performance of corporate accounts during the first half of 1999. To do that, it combines data from the GDS and from internal hotel property management systems to ascertain how many nights each customer actually delivered. Where he now does these reviews every six months, he hopes to begin holding them quarterly.

"Revenue management is how we make our profit, and corporate programs limit our ability to maximize those profits," he said. "If we don't manage this segment very carefully, we can leave a lot of money on the table.