AS part of its global expansion, Starwood Hotels & Resorts Worldwide plans to open 50 new hotels in Europe, Africa and the Middle East by 2012. By working well with its proven development partners, the company can achieve this even during challenging economic times. KIP HORTON, vice president of sales Europe, Africa and Middle East, spoke to Shalu Chandran
How has 2008 fared and what is in the pipeline?
2008 was an exceptional year for Starwood. We have experienced solid growth in all areas of the Middle East region. As for 2009, what people fail to realise in our business is that we are in it for the long haul, so when we look at a destination in the GCC, we have done a lot of homework. The playing field might change a bit in some places, but there are a lot of projects that are going to open. Some projects will slow down. There will be some projects that may die. Starwood still has a very healthy pipeline and I think, like anything in nature, the strong will survive.
In 2009, we will introduce our guests to two very new brands to this region. The W Doha, our very first W property in the Middle East has just opened and Aloft Abu Dhabi which will open its doors in Q4 2009.
What are the new projects planned for the region?
We are currently focusing on the development of our existing brands. From all the signings we’ve had this year, there is a concerted effort to expand our brand footprint in this region. Last year we’ve signed on 10 new hotels including the St Regis Saadiyat Island, Abu Dhabi (380 rooms), the St Regis Business Bay, Dubai (220 rooms), the Luxury Collection Ras Al Khaimah (300 rooms), W Amman (280 rooms), Westin Hotel, Golf & Spa, Abu Dhabi (148 rooms), the Aloft Riyadh (225 rooms), Element Abu Dhabi (270 rooms), Four Points by Sheraton Dhahran (236 rooms), Four Points by Sheraton Mall of Arabia, Jeddah (300 rooms) and Le Meridien Towers Makkah (666 rooms)
With these signings, we have launched three new brands to the region: Aloft, The Element and St Regis.
When do you anticipate economies to recover from the downturn?
This time, I believe it will be slightly longer. We have a few more months to figure how bad it is. There are places in the world where transparencies are not as much as in other countries. While the situation changes by the day, our view is that this slowdown will most likely persist through 2009. There isn’t the potential, this time for a big bounce back. Various countries will come out quicker than others. I think places like India has great potential to get going faster. What will save us is what little you and me can do to contribute. It has always been small businesses that have help revive the economy at the time of recession. Microsoft is out there in someone’s garage, waiting to happen and I think it’s probably going to come from something like Green Energy. It is going to be a trickle up effect. There are always enough smart entrepreneurial people out there that will get us out of this.
Have occupancy levels in your Middle East properties been affected?
The Middle East region continues to show the highest growth rate worldwide with RevPAR growing by 17.9 per cent in 2008 and average daily rate (ADR) growing 15.8 per cent in 2008. Room revenue for the Middle East hotels increased 22.8 per cent in 2008 over 2007. In terms of occupancies, our ME hotels achieved 70 per cent in 2008 as compared to 68 per cent in 2007.
The booking trends have changed, currently the booking pickup is very last minute – this is a big change to a 30 to 60 day window we experienced same time last year.
Will the region perform this summer?
Ramadan is August, so September might continue to see a lot of leisure travel into Europe from the Middle East. The ME is resilient and so will continue to travel within the region. As long as they go somewhere, we are ok, because we have 916 hotels worldwide and can cater to demands for any city at any budget the chose. We are so spread out around the world geographically, and we’ve got something for everyone.
What on the agenda for Starwood now?
It’s about getting out on the road, meet and talk to your customers. We have got to sit around the room and listen to what the other person has to say. A lot of people will not be present at shows like ATM, but we will be there to see who is thinking and who has got the next trend that will fix 2009.
There are things that will happen that will never change again. We have to learn from this, we have to make small changes like reducing the temperature of the swimming pool, reducing bathroom accessories to the minimum and so on. We all can do with less.
Starwood remains on track to increase its global portfolio by 40 percent over the next five years. Its brands include Four Points,Sheraton, aloft, W Hotels, Le Méridien, Luxury Collection, Element, Westin, St. Regis.