Sternlicht Puts Focus On Starwood Brands

HONOLULU? Global brand development, innovative technology and a clean balance sheet? that?s what you can expect from Starwood Hotels & Resorts this year. At least that?s what Barry Sternlicht, CEO of Starwood, told the more than 1,500 attendees at the company?s annual conference held here last month. After noting that there are still some hurdles to be overcome, stemming from the integration of Starwood?s brands, lodging companies and cultures, Sternlicht brought the focus of the conference to each of Starwood?s six brands and their differing growth strategies. In doing so, he made an effort to downplay the corporate Starwood name, in a move to instead highlight its lodging components rather than the potent corporate umbrella which is already known worldwide. Confident that the pruning of its portfolio, which has resulted in more than $7 billion in hotel assets sold, is working for the company, Sternlicht said that he expects Starwood to be ?positioned for an investment grade rating by the third quarter of 2000? and that he will ?keep cash in our business? to aggressively develop each brand. Case in point, the week of the conference, Starwood sold the San Francisco Westin St. Francis for $243 million to BRE/St. Francis LLC, a unit of the New York-based Blackstone Group. A few days later, Sternlicht told HOTEL BUSINESS? that Starwood would develop another W Hotel in New York, this time in Union Square. This project is expected to be a conversion of New York?s landmark Guardian Life building, an historic 20-story structure that will be transformed into a 270-room property. It will be set at the corner of Union Square Park and will be the first hotel in that area. The W brand garnered its fair share of attention at the conference and in a way was representative of the type of growth Starwood anticipates companywide. The chic brand already has 10 hotels open, with two more slated to open this month in New Orleans. A strong pipeline of development has been established for W, said Sternlicht, who noted markets for future W Hotels as: San Diego; Newark, NJ; Sidney, Australia; Tokyo, Japan; and South Beach in Miami. The Westin brand, meanwhile is quietly making its own strides, with a launch in Europe that will include the conversion of nine properties by March. Investments in the brand such as renovations and new additions are expected to pay off in a higher ADR. The goal systemwide is to increase Westin?s ADR from $138 to $175, said Sternlicht. Although St. Regis is not expected to have as large a distribution as its sister brands, the high-end chain is being revived and revamped with the addition of several first-class properties. Its first two international hotels were recently flagged in Beijing and Rome. Others are slated for Hong Kong, Taipei, Vienna, Shanghai and Los Angeles. Many of the new St. Regis properties will consist of a residential and hotel component, said Sternlicht. A deal for such a project is currently in the works in Boston, he said. Starwood is also working on a more international growth line for Four Points. The company is currently creating a design prototype that will suit worldwide expansion. One of the biggest accomplishments at Starwood in 1999, said Sternlicht, was filling more than just a handful of executive slots. ?We have a melting pot of executives that are the best of the best,? he told franchisees. ?It truly is a remarkable achievement.? Some of the new positions filled had to do with the newly-created brand structure in the United States, announced late last year. Executive vice presidents were named for Westin and Sheraton in the United States and in Asia. In addition, an international division was created with Bob Cotter serving as president in the U.S. and Roland Vos as European president. The presence of Brenda Barnes as acting president of Starwood, indicated that no replacement has yet been found for that slot. However, Sternlicht made a point of telling attendees that he is aggressi