With an expected growth of 50 hotels per year in Asia-Pacific, Starwood’s operation in the region is no doubt accelerating.
By Percy Roxas
The global expansion of Starwood Hotels & Resorts group is currently in its strongest pace in Asia-Pacific. Starwood has grown significantly, in fact rocketing, in the region. Today, the group operates 250 hotels in the region, 21 of which are in Thailand. Another 155 hotels are in the pipeline. With expected growth of 50 hotels per year, its operation is no doubt accelerating. Behind this aggressive expansion is Lothar Pehl, Starwood’s senior vice president (SVP) for operations and global initiatives, one of his three main job titles. Lookeast editor-in-chief Percy Roxas interviewed the veteran hotelier recently and here are excerpts:
On Asia-Pacific expansion
“Asia Pacific is in for a significant change; an upward trend in global travelers. It is the world’s largest region from a population base: 1.3 billion in China, 1.1 billion in India, 390 million in Indonesia, and so on. So if you look at these markets overall, it is a market of over two billion travelers in the next 10 years. Based on its geography, population, and its enthusiastic, exciting destinations, Asia-Pacific will be at the forefront of, and will benefit from, this growth. Asean is also coming up in as little as two years, opening new opportunities again as travel become so much easier and much more frequent. I think we (Starwood group) are in a good place at a good time.
“Right now we are opening 36 hotels in China per year; that’s one hotel every 10 days. We’re also looking at India, which continues to accelerate; Indonesia, Myanmar, the Philippines, and even Australia, where the momentum of new hotel construction has just started about a year ago; and Korea as well. If owners are going to these destinations to build hotels, Starwood will be very interested to talk to them about managing their assets.”
“What’s that promise? Our brand identity. If, for instance, you take the St Regis identity, we provide you with bespoke luxury. If you look at Sheraton, we say it will be uncomplicated. If you look at W, it will be cool and hip. Every single brand delivers the message and understanding of what the brand is all about. It forms your expectations and we strive to deliver according to expectations.”
“Expansion plans in Thailand are crucial for our company. Thailand is at the forefront of resort tourism; it is at the forefront for many, many years. If you think of Asia, you must think of Thailand when you think of resorts. We have a number of resorts in the country and we look to further our resorts base in the country. This year, we opened the Vannabelle Collection in Koh Samui and W Hotel in Bangkok. Next year we’ll open Le Meriden Suvarnabhumi. We have Aloft and Four Points in Phuket for which I don’t have the opening dates yet.
“Given the negotiations and interests we have from investors, I believe we will see two new hotels every year on average. My personal goal would be to open 10 more hotels in five years. With easier access, there will be more travel, and therefore there will be need for more hotels. ”
Focus outside Bangkok
“We are very keen on resorts and there are a lot of islands around Thailand that investors are looking at. We would like to look at these islands for destination resorts on a smaller size but very luxurious scale. Phuket is definitely a market, and so are Pattaya, Chiang Mai, and Hua Hin. There will be key activities in virtually all the key centers.
Unique opportunity for Thailand
“Thailand has a unique opportunity because it started many, many years ago. It has always been at the forefront of tourism. Many countries look at Thailand, see what is being done over there and try to duplicate them. I think the opportunity here is clearly what I call a ‘complete visitor economy’ where the departments work very closely together across all sectors, address needs and trends of the travel of the future, and try to identify the best way to work toward a common goal.
“The word is collaboration, through a focus on new trends on how new consumers make their decisions. What their needs are, that’s the focus, and there’s the opportunity. I would like to include more corporate social responsibility and responsibility toward the environment because the reason why people come to Thailand is the culture, the diversity, and the friendliness of the people. The Thai heritage has to be protected.
“On our side, we have many great initiatives, such as the sustainable meeting practices that we have just launched, and products that help the local community. Of course, customers can choose; they can have the package they would like to have. If they want a linen tablecloth, we will provide it but as a base, this is it. And this is happening in all Starwood properties worldwide.
“For something more specific, I think a great story to tell really is the Sheraton story. Sheraton is the largest one in our portfolio among our nine brands. We will soon, hopefully this year, reach a milestone in our 500th hotel.”
What makes Starwood properties different?
“Starwood is a lifestyle brand owner and operator. We do a great deal of research and analysis. We look at trends. We are innovators. In the history of Starwood and our brands, we have always been leading, and many others have copied us. There is no better compliment than being copied in what you do. We have responded to the requirements and trends of customers wanting to use their mobile applications because computers are almost ancient nowadays. We have nine brands in the group and we have eight of these in Thailand. What we don’t have yet is Elements. But I consider every hotel a flagship property. It may sound very strange but that is really our approach toward business. It is our approach toward our owners and our partners. Every hotel has a distinct location and has a distinct attribute within a distinct brand. With these brands and properties there is a unique niche for that brand and hotel in that market.”