Starwood is, in general, an upscale hotel chain. It’s stock price is high relative to its size and peers. But it’s stagnating, because it hasn’t had a workable plan for growth. Even if it’s Tribute Portfolio brand succeeds, success means adding an extra 1% of growth onto the company a year. So that’s not a silver bullet.
They’re in the mergers and acquisitions market but as an acquirer and as a takeover target.
They’re also working to fix some of their problems. Everyone wants a lifestyle brand and Starwood has one of the originals in W. But it’s not a driver of growth. Aloft and element were strategic additions to the portfolio but haven’t been growth engines, either.
Four Points is rarely the category leader in any given city. There’s little consistency or brand value, other than ‘by Sheraton’ at the end of the Four Points name.
But Sheraton itself is perhaps the biggest brand problem that Starwood faces. It simply doesn’t carry a clear message.
- In Asia Pacific, the Sheraton brand is strong. It signals quality. In fact, Sheratons are generally nicer than nearby Westins. The Sheraton Grande Sukhumvit is a true world class hotel, for instance.
- In the US it’s pure inconsistency. There are perfectly decent Sheratons such as in Seattle and there are run down Sheratons. The Sheraton name in the U.S. alone doesn’t tell you what you’re going to get, other than the club lounge is likely mediocre.
- That’s a great contrast from Europe, where a Sheraton club lounge can be quite nice such as at the Frankfurt airport.
Sheraton Frankfurt Airport Club Lounge
Sheraton does, to me, mean an excellent bed. I’m a big fan of the Sweet Sleeper.
Hotel News Now details the 10 point plan Starwood is using to revitalize the brand. It’s called ‘Sheraton 2020’.
Sheraton 2020, a nod to the plan’s clear five year vision, includes a new $100 million Sheraton-focused marketing campaign; the launch of the new premier tier, Sheraton Grand; continuous innovation of the Sheraton guest experience; an unwavering commitment to service excellence; the implementation of revenue and profit-driving initiatives to benefit owners and developers; and a goal of opening more than 150 new Sheraton hotels worldwide by 2020.
View from the Royal Orchid Sheraton
- They’re going to work on branding — which to me misses the point or at least comes last. The problem isn’t the marketing, it’s what they’re marketing, it’s the product that’s inconsistent.
- They’re going to spend $100 million on marketing through 2017. I could do without the ad campaign, but was pleased to see an intention to “[e]xecute the richest Sheraton-focused SPG promotions in Starwood’s history” (they’s already detailed the first salvo).
- Add a sub-brand, Sheraton Grand, with 100+ properties. The moniker is already in use of course at some property, but by designated premier properties they hope to cajole owners into spending on renovations in order to signal the quality that will accompany the new moniker. They think showcasing quality will also make customers feel better about the brand as a whole, though it could also have the reverse effect — a belief that the non-“Grand” properties are inferior.
- Make their owners happy. Here they may run into difficulty with the rest of their initiatives. And they resort to a bunch of corporate-ese. Although reducing the fees they charge, if that’s where re-evaluation goes, would ‘earn owners confidence’ though I’m not sure it would earn Wall Street’s.
– Laser-focus on revenue and profit-driving initiatives and programs to boost owner value
– Balance building and conversion costs with exceptional guest experience
– Reevaluate brand standards and fee structures to improve owner economics - There’s no question that the weak link in any hotel chain is that no matter what benefits and investments are made they rely on frontline front desk staff and other relatively low paid employees to deliver on their promises. So there’s no question the next pillar to ‘Ignite Associates’ Passion for Sheraton’ matters but it’s also the most challenging.
- They want to get execution right every time, which means tackling the brand’s inconsistencies, and that’s important.
- Focus on meeting spend.
- Improve their premium offerings like food and beverage and club. That would be nice.
- Improve design — of both the room, and of lobbies to become a more social space that drives revenue.
- Open 150 new hotels by 2020 (these should be mostly conversions). Lower fees could help here.
View from the Sheraton Iguazu Falls
IIRC The Sheraton Grande Sukhumvit is not a part of the Sheraton brand and isn’t indicative of Sheratons in Asia. It is a part of the Luxury Collection brand and follows the standards of that brand.
I’d like someone to explain their “Le Meridien” brand to me. Never understood that one.
You’re spot on…the message has never been clear. Sheraton is to Starwood like Holiday Inn is to IHG….two legacy brands where you never know what you’re going to get. There are perfectly good properties in both brands but some truly bad ones that should be banished, IMHO. You pretty much have to read Tripadvisor or blog reviews before making a reservation. I’ve never understood why Starwood/IHG haven’t tightened up their brand standards – maybe they are hamstrung by loosely worded franchise agreements.
Take some of that ad spend and set it aside for monetary bonuses for front end staff departments when they hit certain metrics which drive guest satisfaction. A $50 bonus for scoring well on a guest survey will go a long way with the underpaid front lines. Incentive is a powerful thing.
I wouldn’t say Starwood is alone. Although my experiences have been consistently positive with Hyatt, I couldn’t describe to you as a US based traveler what Hyatt, Marriott, or Sheraton means. Difficult for Sheraton is the Westin brand, as its emphasis on Heavenly and Wellness stands out. I like that I can borrow a pair of running shoes or get a yogurt parfait at 2am. But Sheraton? No idea. Marriott? There’s probably a lobby bar, right?
@stvr – Le Meridien is actually pretty distinct. It’s basically European style wherever you go.
I always wonder why the Sheraton and Westin flags don’t just combine under the Westin standards.
But then the overlap with franchises….(like at LAX)….gets messy…
Didn’t they just do a giant “Sheraton overhaul” a few years ago?
I don’t see where this really helps or hurts (me) other than I really like SPG and hope they can steer clear of anything that would involve merging with IHG. But I’m confused about the Sheraton deal and why the first overhaul didn’t work.
Also a little concerned all this investment is going to push reward categories harder and put even more of their hotels out of reach for me. I know how the game is played, but as a primarily US traveler having nearly all of my main spg locations bumped up still sucked.
I totally agree with your statement that Sheraton is consistently inconsistent. I have stayed in very nice ones and some lousy ones. One commenter said you really have to read tripadvisor to see what the property is like. One example that comes to mind is in Chicago. If you look at SPG properties downtown, you can’t tell if you want to book at the Sheraton, Westin, or W. They are all over the map with customer reviews. They have very few clear brand identifiers. I love the Westin Heavenly Bed and two head shower. I also like some of the jr suites and room layouts of standard Sheratons. W has some cool rooms and decor based on my San Fran stay at the W there but seems to get lousy reviews at their Chicago location. I hope they spend the money on refurbishing their properties and less on marketing. The best marketing are happy customers and you can’t buy happy customers with 30 second tv commercials, it takes great stays.
You hit the nail on the head when you said, “They’re going to work on branding — which to me misses the point or at least comes last. The problem isn’t the marketing, it’s what they’re marketing, it’s the product that’s inconsistent.” I simply avoid Sharatons because of too many old, dirty, and substandard hotels. Marketing does not fix poor service and run down hotels.
Worse yet, I have the Starwood card and should be a prime customer, but instead I stay in some Westins and then use the rest of the points for airlines. US Sheratons are extremely inconsistent and it is the base product that is the primary problem. I also don’t see “Sheraton Grand” as a solution. All this tells me is that many of the Sheratons will be neglected.
Crappy promotions compared to Hyatt.
Inconsistent hotels. Premium prices but no reason for them.
Lousy lounges if there even are any.
Few if any upgrades for elites.
Decent wi-fi though.
“The Sheraton Grande Sukhumvit is a true world class hotel, for instance.” are you kidding me? If they are true world class, then what about the Peninsula, Okura in BKK?
The Sheraton in BKK was the worst hotel I’ve ever stayed at in BKK.
@R comparing to the top luxury properties isn’t what I’m doing. And I’ve stayed at far far far worse in Bangkok!
Where do I begin?
Sub par dated properties with stinky perfumed lobbies
A poor loyalty program because of overpriced redemption on premium properties
that makes me choose airline miles over free nights
Crappy club lounges with poor cheap inferior offerings with lousy operating hours
Poor or no selection of newspapers
And now a promotion to stay at sheratons and redeem in another crappy Sheraton
It might have worked if I didnt have to redeem in another Sheraton
Take millions to market the rapidly declining brand and don’t invest in human resources brand assurance or offer a premium hard product and quality offerings
How do you spell millions flushed down the sweet toilet?
Other than a decent bed or the rare premium Sheraton overseas its become a depressing brand with overpriced rooms and a once exceptional loyalty program rarely worth redeeming in
Bring back Barry Sternlicht the company is sagging so sad!
Did I say cash and points sucks now too?
Have stayed at the Frankfurt Airport Sheraton from time for many years. Can’t speak for the lounge, but the hotel is, and has always been, perfectly lousy. UA just put my wife up there a few nights ago. She confirms that it remains just as lousy as it’s always been.
Starwood has described Sheraton’s core values as “warm,” “connected,” and “community,” which really doesn’t stand for anything. The Sheraton incoherence pre-dates the acquisition by Starwood (which bought ITT Sheraton as a white knight to keep it out of the hands of Hilton — imagine that empire), when in fact it was still trying to digest its Westin acquisition. ITT had long operated a big, messy hotel empire that also included Sheraton Motor Inns. Really, Starwood just needs to finish the dismemberment of Sheraton. Starwood has already cannibalized the Sheraton properties for its Luxury Collection brand (see the former CIGA hotels in Italy and the Royal Hawaiian, for example).
@stvr: I get Meridien — odd French design, reflecting its heritage as the Air France hotel chain. The “French” brand that baffles me is Pullman.