ON THE back of last year’s performance, Starwood anticipates another year of solid growth in both mature and emerging markets in 2015, fuelled by hotel openings and high-quality deal signings.
Starwood opened 74 new hotels in 2014, representing about 15,000 rooms in 26 countries. The company also signed 175 new hotel management and franchise agreements last year, a 15 per cent increase over the prior year, marking the fifth consecutive year of increased signings and the most new deals in one year since 2007. Starwood aims to reach the following milestones this year: • 300th hotel in Asia Pacific and China• 150th hotel in China (with all nine brands represented)• 90th hotel in Africa and the Middle East• 175th luxury hotel, 750th upper upscale hotel and 300th mid-market hotel “Looking ahead, emerging markets remain a focus for us, but recovering economic conditions and increased availability of financing have also led to strong growth in North America and Europe,” said Simon Turner, president of global development. “North America accounted for more than one third of our signings last year, and the availability of new construction lending resulted in a more than 50 per cent increase in new-build hotel signings over the previous year. Globally, we renewed or extended 76 of our existing agreements with owners in 2014. “We remain focused on working with the right partners, on the right properties, in the right places, and our agile development approach allows us to adapt our growth strategies based on specific geographies and brand needs for both new development and conversion projects either managed or franchised.”WORLDWIDE OPENINGSUnder its St. Regis, The Luxury Collection and W brands, Starwood expects to open more than 25 luxury hotels over the next two years adding to the 12 new luxury hotels which debuted last year. Starwood is on track to add more than 10 luxury hotels to its portfolio this year alone, including St. Regis hotels in Istanbul, Macao, Dubai and Mumbai, The Luxury Collection properties in Nanjing, China; San Antonio, Texas; and Broumana, Lebanon, and W openings in Amsterdam, Netherlands and Goa in India.Starwood opened 27 upper upscale hotels across its Sheraton, Le Méridien and Westin brands last year, with over 150 under active development. The iconic Sheraton brand, on track to open its 500th hotel in 2016, continues to serve as a growth leader for Starwood. This year, the brand will debut in Samoa and Romania and re-enter Iraq, following last year’s launch in Tajikistan. Sheraton accounts for nearly 40 per cent of all Starwood hotels in Asia Pacific and is leading Starwood’s growth in Africa, where the brand will open six more hotels by 2018.Le Méridien opened flagship hotels in Chicago – Oakbrook, Bahrain, and Bangkok last year, and signed 18 new deals. Building on this momentum, this year the brand will open more new hotels than in any other year since Starwood acquired Le Méridien in 2005, with openings planned for India, Bangladesh and Bhutan. Westin opened its 200th hotel worldwide last year and demand continues to rise driven in part by the success of its distinctive wellness positioning. Westin will open its 125th hotel in North America and its 50th hotel in Asia this year. The brand will also debut in Qatar with the opening of The Westin Doha Hotel & Spa – the brand’s fourth hotel in the Middle East.Starwood’s mid-market segment continues to gain considerable momentum, with 35 openings and 100 new deals signed in 2014 across the Four Points by Sheraton, Aloft and Element brands. The segment accounts for about 40 per cent of Starwood’s global growth pipeline and will comprise nearly half of the company’s new hotel openings in 2015, amid rising demand for strong global brands at an affordable price point in both major metro and secondary markets around the world. Four Points by Sheraton signed 50 new hotel deals in 2014, the most in company history, and will surpass 200 hotels in 2015, with more than 25 planned hotel openings this year. Aloft Hotels signed 31 new deals in 2014, the most signings in one year since 2008. Designed for the next generation of travellers, Aloft will cross the 100th hotel milestone in 2015 and expand its portfolio in Greater China to ten hotels by year end. Starwood’s eco brand, Element Hotels, signed 19 deals in 2014 and is on track to triple its portfolio by 2017. On the heels of opening its first hotel outside of North America in Frankfurt, Germany, Element will open its first hotel in China in 2015 followed by new hotels in London, Amsterdam, Boston and Philadelphia, signifying the global appeal of this brand.RISE IN PROFITStarwood reported a better-than-expected rise in quarterly profit and said it would spin off its timeshare business as it looks to focus on operating properties instead of owning them. The spin-off of the timeshare business accounts for 11 per cent of Starwood’s revenue in 2014. This plan is the latest move in the company’s asset-light strategy, under which it has sold properties worth about $1.5 billion over the past two years.Shares of the owner of the St. Regis and Sheraton brands of hotels rose as much as 8.7 per cent to $77.46 as Starwood’s results and spin off plans overshadowed a lower-than-expected full-year profit forecast.After flat to declining revenue growth for four straight quarters, revenue in the timeshare business increased 15.2 per cent in the fourth quarter ended December 31. It generated revenue of $640 million last year.Starwood said Matthew Avril, who retired as president of Starwood’s hotel group in 2012, will return to head the spun-off company. The spin-off is expected to be completed by the end of this year.Starwood’s net income rose 83 per cent to $234 million in the fourth quarter.Revenue fell a steeper-than-expected 1 per cent to $1.49 billion. However, worldwide comparable systemwide revenue per available room (RevPAR) rose 4.4 per cent in constant dollar terms. Starwood blamed a strong dollar for its lower-than-expected full-year profit forecast of $2.87-$2.97 per share. Link to the Plans for 2015: