TORONTO-A few short months ago, Starwood celebrated the opening of its 1,000th hotel, and it moved from having the majority of its hotels in North America to having the majority internationally.
But that doesn't mean there will be a lack of hotel development on this continent-in fact the Canadian momentum of the past five years has just recently borne fruit, with the high profile openings of the Westin Vancouver Airport and the Westin Montreal.
"Four Points by Sheraton [properties] are springing up like mushrooms after a rainstorm, and there is momentum on the conversion side," noted Scott Duff, senior director development, Canada and Alaska for Starwood.
Left to right, Chip Ohlsson, VP of development, Northeast/Midwest/Canada, Simon M. Turner, president, global development, and Scott T. Duff, senior director, development, Canada and Alaska, global development group for Starwood Hotels.
Internationally-Geography, longevity are big assets
Simon Turner, president, global development for Starwood, was in Toronto to speak at the recent Canadian Hotel Investment Conference. He and Duff spoke to Canadian Lodging News about why Starwood is so well-positioned for international expansion.
"When I look at the geographical distribution of our nine hotel brands, we are extraordinarily well-placed with brands that are distinctive and compelling, ranging from the ultra five star to more affordable," said Turner.
It's no accident that the 1,000th hotel was a Sheraton in China. "China is a huge growth market for us, with 55 hotels up and running already, and 75 under construction," Turner observed.
Duff pointed out that Sheraton has been in China for more than 25 years, opening the Great Wall Sheraton in 1984.
Longevity will serve the hotel giant well as it expands to the fast-growing BRIC countries-Brazil, Russia, India and China.
Starwood opened the Sheraton Rio in Brazil in 1974, and in India the Sheraton brand has had a foothold around the world for three or four decades, Turner said.
This means Starwood has local teams that have grown up in the company, and don't have to parachute people into markets in order to grow. "Rather than being a U.S. company seeking to grow elsewhere, we are a global company that happens to have its headquarters just outside New York," Turner added.
"In India and other fast-growing countries, you can see a presence that has been there many years, and you can build off that Sheraton presence. As countries grow, secondary and tertiary markets continue to support Sheraton with Four Points by Sheraton."
In Canada-Four Points and conversion opportunities
There's a similar trend here in Canada, where Four Points by Sheraton and conversion opportunities are the name of the game these days.
"New builds will be slow to come back, whereas Scott can go in [to a conversion property] with the Four Points brand, and quickly implement the essentials they must have to affiliate with Sheraton. They're the Sheratons of small-town Canada," Turner said.
Sheraton has had a presence in Canada since 1949-see sidebar for details.
"When you have a rich and deep heritage around the world, it makes you much more of an effective local marketer," said Turner. The Chinese consumer views the Sheraton brand as familiar.
And in Western Canada, where there are investors from the Middle East and South Asia, the brands resonate, Duff added.
Global growth also allows Starwood to pursue economies of scale in such areas as the reservation system, web pages and brand marketing. "As the company gets bigger and bigger, this allows us to make investments that will ultimately benefit all our owners," Turner said.
"This all ties back to what we saw in the 1980s. When Japanese consumers became more affluent, the first thing they did was to satisfy their needs for material goods. Once all their material needs were met, these consumers started to collect experiences, specifically travel experiences," Turner noted. This 1980s Japanese travel had a meaningful impact on the Canadian Rockies and Niagara Falls.
The same is now happening with Chinese, Indian and Brazilian travellers, and Canadians will benefit from this trend as well.
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