STAMFORD, Connecticut—Hindered by the economic slowdown just months after its launch, Starwood Hotels & Resorts Worldwide is eager to see if developer interest ramps up for its eco-friendly Element brand as construction financing loosens.
The Element brand, which launched in 2008 as a new-build-only concept focused on sustainable living and requires each hotel to seek LEED certification, just opened its 10th property in February in Miami. Initial plans called for 20 hotels to open by 2009.
Since its launch, Starwood has tweaked the brand’s growth plans, now saying it would consider conversions if the developer still meets brand standards, including LEED certification. And, like many other brands, Starwood’s focus has turned global, with the first Element outside North America expected to open in 2013 in Vaughan Mills, Ontario. The next three properties, including the Ontario hotel, in Element’s pipeline are outside of the U.S., with openings expected in Vancouver, B.C. in 2015 and Oman in 2016, according to the brand’s website.
“We have a number of (hotels) in the pipeline,” said Paige Francis, VP of global marketing for Starwood’s Aloft, Element and Four Points by Sheraton brands for Starwood. “We continue to see growth throughout the world, and we have a lot of different developments in the hopper across all divisions. More announcements are coming.”
Francis said, since its inception, the Element brand has resonated globally. Outside of the economic factors, she said the brand’s slower-than-expected growth could be attributed to the fact that sustainable development was a concept that Starwood wanted to perfect before it made a splash in the market.
Starwood financed, built and continues to own the first Element in Lexington, Massachusetts. Francis said that property serves as an “innovation lab” for testing sustainable initiatives across Element’s portfolio and even for the other Starwood brands as well.
“We wanted to get it right. We built the first Element so we understood how to operate these correctly,” she said. “As we’ve added to the Element portfolio, we continue to learn.”
On the operating front
Some of the sustainable initiatives that differentiate Element from other hotel brands are: low-flow water fixtures—from the shower head to the faucets—are estimated to save approximately 1 million gallons of potable water a year; each room is equipped with a small kitchen that features all Energy Star-rated appliances; toiletries are housed in dispensers rather than the typical plastic bottles; all light fixtures use compact fluorescent light bulbs; the hotels offer filtered water instead of bottled water; and each hotel room features recycling bins for paper, plastic and glass.
On the development side, Element’s standards require eco-friendly flooring and low-VOC paints on the walls. Oversized windows are installed to take advantage of extra light and the brand requires sustainable roofing materials.
“It has changed how we have to operate the hotels,” Francis said. “It has even changed the structural design environments.”
There are electric car-charging stations at each of the properties and bikes—key to the hotel’s programming—are available for guests to borrow, both as part of the fitness programming and for transportation options.
The sustainable initiatives “provide good cost savings and are phenomenal for the environment,” Francis said.
However, because the environmentally friendly amenities are designed to not compromise the guest experience at all, they aren’t necessarily marketable, Francis said. Rather than targeting an environmentally conscious consumer, Element hopes to attract travelers for other benefits and then ‘wow’ them with the sustainability initiatives as a bonus.
“I’m not sure people are looking for a green hotel and making it the primary reason for choosing a hotel,” she said. “Certainly there are a few that are seeking that green experience. But most choose Element for other reasons and find it was a great experience. It makes them that much more loyal.”
Moving forward, Francis said there are opportunities to develop Element hotels in primary, secondary and tertiary markets, which is evidenced by the brand’s current portfolio, with hotels in Times Square in New York and Arundel Mills, Maryland. Developing sustainable hotels comes with a slightly higher premium, and in the case of Element the premium is about 1% to 2% higher than traditional construction, Francis said.
However, Starwood has prepared for that by formulating a green development roadmap that walks developers through how to build an Element hotel appropriately and cost-effectively.
“We’ve done things to make it easier to achieve LEED certification. The prototype has been certified as a volume build,” she said. “Hotels are realizing (return on investment) on that premium in two to three years.”
Depending on local laws, Francis said there are tax credits and incentives that further entice green development.
The hotels that are open today that are performing very well, Francis said; consumer feedback is very strong and, once customers stay, they become “brand evangelists.”
“Green is not a fad by any stretch of the imagination,” she said.