Starwood Hotels and Resorts today said that it would put 15 to 18 properties up for sale with a plan toward generating $500 million to $1 billion in return. Liquefying some of the company's assets is an attempt by Starwood CEO Steven Heyer to reduce Starwood's dependence on real estate, while still maintaining a mixed portfolio, or what he dubbed becoming "asset right." Starwood had previously closed on the sale of 28 properties to Host Hotels in April, properties Heyer characterized as having less value than the ones that remain under Starwood ownership.
Yesterday, Starwood unveiled its new multi-brand strategies and formally announced Project ESW, the development name for its new extended stay brand, which it will detail plans for later this year.
Heyer, who noted that Starwood was poised to grow even more due to strong demand and group business that is being booked at an attractive pace, said the company was focused on cultivating brand loyalty. Starwood's new strategy focuses on triggering emotional connections with guests that leave lasting memories, something it deemed more important to travelers than price.
The former president and COO of Coca-Cola said that for the past 18 months, Starwood had been working to unleash its brands' potential by implementing a concise strategy, which he said already was paying dividends. Still, Heyer said currently there is more loyalty in a bottle of ketchup than in hotels.
Javier Benito, executive vice president and chief marketing officer of Starwood, said that the company now is measuring revenue on a per occupied room basis instead of using RevPAR, the long-standing, industry-recognized growth metric. Whereas RevPAR only accounts for rate, RevPOR considers rate and additional expenditures by travelers such as food and dry cleaning, which he said could often exceed room rate.
Even so, Starwood announced today that it expects annual RevPAR growth of 9 percent to 11 percent and 5 percent to 7 percent annual unit growth through 2009.
Also key to Starwood's growth plans is expanding its global footprint. Eva Ziegler, Le Meridien's senior vice president, said that Starwood's footprint grew 45 percent after the Le Meridien acquisition last year
(BTN, Dec. 5, 2005).
The St. Regis brand on June 1 will launch its e-butler service, enabling guests to notify a butler via e-mail with any needs they might have while they are away from the hotel.