Sheraton continues to invest heavily in both new hotels and the refurbishment of existing properties. Sheraton’s global brand leader Hoyt Harper talks about the brand’s expansion plans and catering for the business traveller
What are Sheraton’s growth plans over the next few years?
Currently we have 417 properties in 75 countries and there are another 104 hotels in development with about half of those in China. The others are spread around the world – India, Australia, the US, Middle East, South America and Eastern Europe.Between now and 2016 we are spending $5 billion on these new properties with most of them due to be completed by 2015.
We currently have 51 hotels open in China with 54 in development including the world’s largest Sheraton in Macau which opens in October and will also include a casino. It will have 4,000 rooms and will be double the size of our current largest Sheraton hotel in New York which has 1,800 rooms.
We have long had a presence in Europe and the UK and we are still looking for strategic opportunities to expand our presence in new business centres, convention facilities and more regional properties.
Sheraton will have 437 hotels by the end of 2012 and there will be over 500 properties by the end of 2015.
How important is Sheraton as a brand within your parent company Starwood?
Sheraton’s hotels account for nearly half of all Starwood’s rooms worldwide and the growth of Sheraton sets the tone for the entire company.
Sheraton was the first international brand in China, India, Latin America and the Middle East. We have led the way in new countries which has provided opportunities for our sister brands. We opened the Sheraton Great Wall in 1985 which was our first Chinese hotels and then St Regis opened in Beijing 15 years later – now there are eight of the nine Starwood brands in China (Element is the only Starwood brand currently not in China).
Sheraton has long been known as a major corporate brand – how important does this market continue to be?
It’s extremely important – Sheraton has always chosen to first enter markets based on business travel demand. For example, we are expanding in Shanghai because of strong business travel demand – we already have three hotels in the city with another three under development. Our hotels will continue to be strategically located in business hubs such as Bangalore in India where we have opened.
Our ultimate goal is to cater to the needs of business travellers and we also want to take care of them during their leisure time which is way we are seeing a growth in our resort properties – we now have eight resorts. One of the reasons we think we can do this is the strength of our Starwood Preferred Guest (SPG) loyalty programme – business travellers can earn points and then redeem them for an extended weekend or resort stays. We are also seeing the trend of business travellers extending their work trips into short holidays where they bring their family with them.
How has 2012 been so far for Sheraton and what trends are you seeing?
It’s strong from the global perspective, although certain markets are stronger than others. We are the best balanced hotel firm in terms of our global reach – Starwood has properties in 100 countries – and this makes us less dependent on any given market.
For Sheraton, we see our main competitors as Marriott, Hilton, Hyatt and Shangri-La, plus some regional competitors depending on the market. We have a significant lead in growth in China, India and other emerging markets, as well as a leadership position in the Middle East and Latin America. We continue to grow market share worldwide for both leisure and business travellers.
Despite some economic troubles we saw growth in the UK last year with revpar up by 6.3%. It was a great year for London with our central London hotels recording a new peak for revpar growth in 2011 – we actually exceeded our peak year of 2007 during 2010 and then had further growth last year.
What impact will the Olympics have on your London and UK business this year?
We are very excited about the Olympics as we believe it will bring attention to London and the UK overall. We have committed a significant part of our inventory - 65% of our rooms - to Locog (London Organising Committee of the Olympic and Paralympic Games).
Overall we expect us to have high occupancy both pre-Olympics and during the games which should serve to keep our business strong throughout the summer. We will be full during the Olympics – the 19 days of the games are really busy. But it will be business as usual straight after the end of the event in August.
Your Edinburgh property has just finished a major refurbishment – what other refurbishment plans do you have across your portfolio?
Sheraton has spent $6 billion on a revitalisation programme including over $2 billion on renovations to existing properties. We decided to invest heavily during the downturn because we wanted to own the upswing.
We have renovated 150 hotels worldwide and will do the same to another 60 hotels. We have also removed 80 hotels which was a hard decision as we gave up the management fees but we felt we had to do it to improve the strength of our brand. We also added benefits to our SPG loyalty programme.
We are now looking at spending another $5 billion on the growth of the Sheraton brand as well as continued renovations to key properties such as the Sheraton Great Wall in China. Our goal is for all our hotels to be either new or newly renovated – 70% of all Sheraton hotels will be in this position by the end of 2012.
What other initiatives have you introduced to make your hotels more attractive for business travellers?
We have introduced the “Link@Sheraton” which is a technology programme in association with Microsoft. We have redesigned lobbies to create a social space which includes free wifi, access to terminals and a cafe. This encourages guests to get out of their rooms and socialise more.
We have found that more guests are using Link than having breakfast at our hotels. Link is available at 92% of Sheraton properties and the rest should have it by the end of this year. We also offer free wifi on our club floors and it’s also free for SPG gold and platinum card holders.
We have found that 62% of guests are very interested in staying fit while on the road. We have the latest fitness equipment and offer nutritional programmes as well as tips on how to stay fresh after a long flight. We have also re-energised our Sheraton club floors including opening our club lounges seven days a week.
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