Starwood's High-End Midprice Plan Follows W With XYZ

Starwood Hotels & Resorts this month 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. Tentatively called "Project XYZ," Starwood officials anticipate the first properties to open in late 2006 or 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.

"When you're competing with established brands in this space, if you're going to do it, you have to do it differently," said Starwood CEO Steven Heyer.

Starwood senior vice president of development Chuck Tomb said the company plans to compete head-to-head in markets where Courtyard by Marriott and Hilton Garden Inn have established a presence. The company will focus on roadside locations and XYZ projects will comprise new builds only, Tomb said. 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.

Although the company seeks to take a bite out of its competition, a spokesperson said XYZ and its already-established Four Points brand can coexist in the midprice market.

"XYZ and Four Points will comfortably share the same space in the select service arena as W and Westin do in upper upscale," a Starwood spokesperson said. "Starwood has clearly demonstrated that lifestyle brands targeting different customers can live in the same market. While XYZ will provide energy and nightlife and a bit of an urban edge, Four Points has a more relaxed, comfortable and uncomplicated feel. We think XYZ will likely skew a bit younger and probably more urban."

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 an initial 130 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.

In targeting a younger and more tech-savvy clientele, the company is foregoing front desks at the properties in favor of checkin kiosks. However, Starwood said it would include a small desk in each lobby for customer service.

Each planned XYZ property also 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.

Although the company is not including an onsite restaurant in its 136-room prototype, Tomb said Starwood is leaving that as an option.

Meanwhile, Heyer, during the 27th Annual International Hospitality Industry Investment Conference in New York, this month said Starwood also is exploring the development of an extended stay brand, but would not give details. "An extended stay brand would further round out the portfolio," he said.