Aron Q&A: What’s next for Starwood
 
Aron Q&A: What’s next for Starwood
17 APRIL 2015 7:28 AM
Starwood Hotels launched the Tribute Portfolio, but what’s in store for the company’s other nine brands? And could the company be mulling another select-service brand offering? CEO Adam Aron has the answers in this Q&A.
NEW YORK CITY—The big news this week for Starwood Hotels & Resorts Worldwide is the launch of the company’s 10th brand, Tribute Portfolio. But that doesn’t mean the company has forgotten about its other nine brands.
 
During an interview with Hotel News Now at the company’s 46,000-square-foot Starlab design studio and workspace in midtown Manhattan, newly minted CEO Adam Aron discussed what could lie ahead for Starwood’s other brands, the company’s overall strategic direction and just how long he might occupy the C-suite.
 
Hotel News Now: In your first days as CEO, how would you say you are putting your own stamp on the culture and overall strategy at Starwood?
 
Adam Aron: “I wouldn’t contrast what I am doing with what (former CEO Frits van Paasschen) did. Frits had a great seven and a half years running the company. He’s a friend of mine. I’d make this less about what was and just talk about what I am focusing on. One of the biggest areas of my focus, in addition to launching the 10th brand for the benefit of independent hoteliers, is I am spending a terrific amount of my time focusing on our existing nine brands and the marketing of those brands and the global brand leadership of those brands. I think you will see us over the next very few months pay a lot of attention to each brand in succession, starting with Sheraton, which is the largest brand in our system. And we’ll be making sure the public believes our brands are as strong as we either believe they are or want them to be.
 
“I think in a very short period of time, I think you will see a complete broad, sweeping emphasis on the Sheraton brand. If you go back four decades, Sheraton was one of the greatest hospitality names on the entire planet. And today it’s in excess of 400 hotels in 71 countries. It’s the most popular hotel brand in China. It’s very strong in Asia. It is in fact a strong brand globally today. I do think we can push it much further than we have. And I say it on base of the fact that if you look at the past three years, Sheraton has been the single fastest growing brand that Starwood has, even now. But there’s a tremendous amount of potential for Sheraton because it’s been such a powerhouse in the hospitality industry for a long time.”
 
HNN: How about the Element brand
 
Aron: “There are plans for each of the nine brands. They all deserve their place in the sun. What I think is interesting is if you look at the pipeline for Element, the number of hotels signed in 2014 to be Elements, the Element brand is scheduled to almost double in size as the hotels signed in 2014 come on stream and open. We’re optimistic about what we can do to grow the Element brand. Having said that, it’s the smallest of the nine brands we currently have (as of 9 April 2015), and I think there are growth opportunities for each of the nine brands.”
 
HNN: Have you thought about doing anything in the lower parts of the chain scale?
 
Aron: “We have a brand entry in upscale in the Four Points brand. We have a significant brand presence in select service with Aloft. There are 100 Alofts in the system today. But we are certainly aware that Starwood’s strength is in the upscale, upper-upscale and luxury parts of the world’s hotel industry. And while we have 100 Alofts, we are a relatively small player in select service. That has our attention and will be one of the things we look at over the course of 2015.”
 
HNN: Would you consider strategic alternatives at this time, such as rolling up your owned assets into a real estate investment trust or selling a brand or brands? And can you also give an update on where the company stands as it relates to asset dispositions?
 
Aron: “I actually think that’s a question for another day. We’re so focused on the launch of Tribute. That is the first major endeavor out of the chute, so to speak. It’s a significant issue for a company as large as ours to commit to a new brand. We have to believe in it. Once we believe in it, then we have to execute on that strategy extraordinarily well.
 
“The company has been on a path toward its asset-light strategy for several years. We already announced a public target of selling approximately $800 million worth of Starwood hotels in calendar year 2015. On my first day in this position, I publicly reaffirmed that I was committed to achieving or exceeding that $800-million target and Starwood was reaffirming its commitment to reaching or exceeding its $800-million target. I have every confidence sitting here today that at end of 2015, we will have met or exceeded our goal.”
 
HNN: When you were named CEO, you were described as Starwood’s CEO on an interim basis. How long might that interim tag be attached to your title, and can you give an update on whether there is an active CEO search ongoing at this time?
 
Aron: “If you are member of the president’s cabinet, you say you serve at the pleasure of the president. I serve at the pleasure of the board of directors of Starwood Hotels. The determination of who will be the permanent successor to Frits van Paasschen is an issue that is in the purview of board. I can say that the board is considering external and internal candidates.
 
“In the interim, my focus is much less on who is the permanent CEO of Starwood Hotels and much more that this company is moving at 100 mph to accelerate growth and be an efficient operator and brilliant marketer. I didn’t come in to be a passive caretaker while the board decides the future of the executive suite. And here we are talking about brand No. 10 on Day 52.”
 

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