WHITE PLAINS, New York—Whoever said “luxury is dead” didn’t pass the message along to the global development team at Starwood Hotels & Resorts Worldwide. Amid the worst financial downturn in decades, W churned out nine openings during 2009 throughout the world.
W development is kicking into high gear as recovery approaches. The company has plans to add 17 new properties by 2012, according to Simon Turner, Starwood’s president of global development.
One particular regional hot spot is Europe, where Starwood has more luxury hotels in development than any other hotel company. There are seven W Hotels in construction, which account for 18.9% of all luxury hotels under construction in the region, according to STR Global.
HotelNewsNow.com caught up with Turner to gauge the brand’s progress in Europe and the world abroad:
HotelNewsNow.com: What was the thinking behind this development push?
Simon Turner: It has been just over 10 years since Starwood opened its first W in New York City. Today, W has 35 hotels around the world and is the clear leader in the contemporary lifestyle hotel space with a defined positioning and strong performance. The brand has the strongest growth momentum of any luxury brand and is on track to add 17 new hotels by 2012.
In Europe and the Middle East, we have three outstanding properties with the W Istanbul (Turkey), W Doha (Qatar) and W Barcelona (Spain) with eight more in development: London; Paris; Milan; Athens, Greece; St. Petersburg, Russia; Verbier, Switzerland; Abu Dhabi, UAE; and Amman, Jordan.
As we looked at the W brand, it was clear that W’s positioning based on cutting-edge contemporary design, signature programming and “whatever/whenever service” appeals to guests all over the world. In addition, W is backed by the power of Starwood, including its state-of-the-art booking systems and industry-leading Starwood Preferred Guest loyalty program. With so many untapped global markets, we saw a real opportunity to expand the brand to international cities and exotic getaways and our development partners agreed.
HNN: What areas/markets in Europe are you targeting for development and why?
Turner: As we evaluate markets for expansion, we look at market data, competitive footprint and where our guests want to travel. W is well-suited for international “it” locations, and Europe has plenty of them. We’re opening the W Leicester Square in London later this year, W Paris and W St. Petersburg in 2011. There are over 20 hotels in active development throughout the world. We think W would be a great addition to markets such as Buenos Aires, Argentina; Rio de Janeiro; Shanghai; Beijing; Tokyo; Sydney; Berlin; Rome; Cairo; and Amsterdam, to name a few.
HNN: What is the ownership structure? (i.e. Will Starwood own and/or manage each property?)
Turner: Several years ago, Starwood made the decision to transform from a large owner of hotels to an asset-light company. We are focused on growing our business through working with the right partners on the right properties in the right places to grow our footprint. For W Hotels, our preference is to work with an owner under a management agreement.
HNN: How did you overcome development challenges during the downturn to get these projects in the ground?
Turner: The last two years have been challenging for development, especially for the luxury segment with limited financing compounded by a weak residential and mixed-use development market. We worked closely with owners to help navigate the challenges by being flexible and providing development support as needed. We did see some projects stall; however, given the strength of the W brand and our ability to be flexible, the majority of projects signed pre-crisis opened or are in the pre-construction or construction phases.
HNN: Development has slowed for much of the global hotel industry. How does this benefit/hurt the W expansion plan in Europe?
Turner: Even in the downturn, W has expanded its presence globally with 16 hotel openings including W Hong Kong, W Santiago (Chile), W Doha (Qatar), W Vieques (Puerto Rico) and W South Beach (Florida, United States) in the past three years. We also opened our first two hotels in Europe with the W Istanbul and W Barcelona. While the downturn slowed hotel development, if you look at the other competitors in this segment, W is growing faster and in key high-barrier-to-entry markets. It is a brand owners and lenders have confidence in with a proven track record.
HNN: What is the long-term development plan for W in Europe?
Turner: Our goal for W Hotels regardless of the geography is to be in international “it” locations where the market dynamics and economics work and our guests want to travel. Europe is no exception, with some of the most sought-after destinations in the world—major city centers such as Berlin, Munich, Amsterdam, Moscow and Rome, as well as resort destinations. We think there are tremendous opportunities for W as it is a brand that works for new-build projects as well as conversions and adaptive reuse projects.
HNN: How does the brand’s development in Europe reflect its broader role in the Starwood family?
Turner: W fulfills the need for the guest who is looking for a one-of-a-kind, cutting-edge hotel with first-class service and unique amenities in global cities and resort destinations. What W brings to Europe is a unique product, service and design proposition that is unmatched in the industry today.