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Starwood: North American Growth Driven by Conversions

January 24, 2011 By: George Dooley

Starwood Hotels & Resorts Worldwide, Inc. reported it expects to open more than 20 high quality new-build and conversion hotels in North America this year. Growth in North America, Starwood’s largest division with more than 530 hotels, is being fueled by an influx of high quality conversions and the strength of Starwood’s nine industry-leading brands, the company said. In 2011, Starwood will celebrate several key milestones in North America including the opening of its 60th hotel in Canada and 40th hotel in Florida.

“The hotel real estate market in the United States is in a very different situation than other types of real estate. Despite economic woes, and even with unemployment above nine percent, hotel occupancies are back at pre-crisis highs and we’re facing record low new supply here,” said Frits van Paasschen, president and CEO of Starwood. “While we expect new build activity to remain low, we are watching the transaction markets which will fuel conversion opportunities and ultimately new hotel construction. We have shovel ready projects in metro markets like Chicago, Austin and San Francisco that are ready to move forward as financing becomes more available.”

In 2010, Starwood signed more than 15 conversion deals in North America, four of which were signed and opened in the same year including Le Méridien Chambers and Sheraton Orlando Downtown Hotel. Conversion momentum continues to build with six conversion deals signed in the fourth quarter alone. In 2011, more than 50 percent of Starwood’s North America openings will be conversions.

“Conversions continue to represent the largest growth opportunity for Starwood in mature markets like North America,” said Paul Sacco, senior vice president of franchise development for Starwood North America. “Our distinct and compelling brands are conversion-friendly, giving us the flexibility to match the right brand, with the right development opportunity, in the right market to drive results for our owners and shareholders.”

The award-winning Starwood Preferred Guest (SPG) program is playing an increasingly important role in attracting both new hotel development and conversion opportunities across all of Starwood’s brands. SPG membership is up 25 percent over the past four years, and now accounts for one of every two hotel guests.

• In the past two years, Starwood opened 52 select-service hotels across its Aloft, Element and Four Points by Sheraton brands, resulting in nearly 40 percent footprint growth in North America. In the year ahead, Starwood will open an additional 16 select-service hotels, including the 50th Aloft hotel since the brand launched in 2008. Select-service hotels will open in Florida, Indiana, Kentucky, Michigan, New York, Tennessee, Texas and Washington.

• The success of the Sheraton brand’s $6 billion investment in its properties, which included removing 35 brand detractors, renovating 93 hotels and opening 37 new hotels, has resulted in massive improvements in quality and consistency. Today, Guest Satisfaction – including intent to return, meeting planner satisfaction and associate engagement scores are at an all-time high. In 2011, Starwood will open three new Sheraton hotels in North America including two in Canada.

• More than half of all Westin hotels are in North America. The long-time developer favorite will continue to grow in North America with the high profile openings of the Westin Phoenix Downtown and the Westin Houston Memorial City in 2011.

• Celebrating five years under Starwood, Le Méridien has over 100 properties, in 50 countries spanning five continents – and 85 percent of them are outside North America. This presents a strong growth opportunity for the French-born brand in North America. Le Méridien continues to focus on North American expansion with the recent opening of Le Méridien Philadelphia and the conversion of Le Méridien Chambers, Minneapolis.

W Hotels will celebrate the opening of its 40th hotel worldwide in 2011. Last year, W opened four new hotels in North America: W Hollywood, W New York Downtown, W Austin and W Vieques Retreat & Spa.

• Starwood is widening its lead as the largest operator of luxury hotels in the world with the opening of the St. Regis Bahia Beach, the 21st St. Regis hotel, and the newest addition to The Luxury Collection, the Liberty Hotel in Boston. The conversion of the Liberty Hotel also marked the opening of the 100th hotel under the St. Regis and The Luxury Collection brands.


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By George Dooley | January 24, 2011
Starwood plans to open more than 20 high quality new-build and conversion hotels in North America this year.
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