Starwood’s Sternlicht Eyes Limited Service Sector

NEW YORK— Starwood Hotels & Resorts’ CEO Barry Sternlicht revealed last week during the company’s annual meeting in Dana Point, CA that he is interested in getting involved in the limited service hotel business and is revisiting a slightly modified Sheraton concept geared toward the suburban market. Starwood currently lacks a presence in the limited service arena— a segment that has proven to be highly profitable for its competitors such as Marriott International and Hilton Hotels Corp.— and is seeking an opportunity to gain entry. However, Sternlicht noted that he will be looking to limit the company’s financial commitment to such a move, perhaps taking on a partner or forming a joint venture. But the announcement is a positive sign for the company and the industry. Like most lodging groups, Starwood has been hesitant to spend money on new initiatives in recent months due to a sharp industry downturn following the events of Sept. 11. Recent weeks have shown a steady increase in business, however. Also on the boards at Starwood, said Sternlicht, is a new Sheraton concept. The new Sheratons, which will carry the same name of the more familiar urban hotels, will feature 150-300 rooms and will be placed in suburban locations. Starwood has selected a site for the first prototype, and would like to have about a dozen in various stages of development over the next year, Sternlicht said. News of the concept first broke late last year, but the company had announced no further plans for it until now. In addition, Sternlicht said he would like to double the number of W Hotels out there in the marketplace. “We would like to be at about 50 [W Hotels] in five years. I think we can do that,” he said at the annual meeting. The company is also working on about a dozen new St. Regis projects to complement the chains existing nine hotels. Starwood, whose other brands include Westin and Sheraton, has built both St. Regis and W from the ground up, starting St. Regis from a single luxury hotel of the same name in New York and W from scratch. “Were seeing a lot of (new) St. Regis projects,” Sternlicht said, adding the company is working on one such project in London.