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Starwood launches brand featuring independent hotels

It expects to amass 100 of these upper-scale hotels by 2020, half of which may be in the Asia-Pacific
Friday, April 17, 2015 - 05:50
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The Tribute brand made its debut with the Royal Palm South Beach Miami (above), which opened this week.
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Mr Sukumaran (above) said US and European hotels will also join the Tribute portfolio.

Singapore

NEW YORK-LISTED Starwood Hotels on Thursday introduced its 10th brand, called Tribute Portfolio, which will feature a collection of independent hotels.

Starwood expects to amass 100 Tribute hotels by 2020, half of which may be in the Asia-Pacific, where it is in early-stage talks with independent hotel owners in Singapore, Malaysia, Thailand, India, as well as Japan, South Korea and Australia, Rajit Sukumaran, senior vice-president of Starwood's acquisitions and development for the Asia-Pacific, told The Business Times.

"Having said that, we currently have many more (independent hotel operators), with which we are in advanced discussions in the US and Europe, so you will probably see the first few announcements of new hotels joining the Tribute portfolio coming from these countries. But Asia will probably catch up," he added.

Indeed, the brand made its debut with its first featured hotel in the US - the Royal Palm South Beach Miami, which opened its doors on Thursday evening (Singapore time).

It will soon open four more hotels in the US - Vandre Nouveau Hotel in Asheville, North Carolina (opening in 2017), Noel Place Hotel in Nashville, Tennessee (2016), a hotel in Savannah, Georgia (2016), and another, also unnamed, in Charleston, South Carolina (2017).

The Tribute brand will focus on upper- scale hotels, complementing Starwood's other independent hotel brand, The Luxury Collection brand. Its other upper-scale brands include Westin, Le Méridien and Sheraton.

Starwood chief executive Adam Aron said this brand will appeal to hotel owners of distinct properties "who wish to maintain their independent spirit, yet benefit from Starwood's powerful distribution, loyalty and sales platforms".

Starwood's hotels in the Asia-Pacific region make up about a quarter of its global portfolio, but its pipeline projects under construction or in the design phase account for more than 55 per cent of its global room pipeline - testament to the faster-growing hospitality market in the region compared to the rest of the world.

It currently has close to 530 operating and pipeline hotels combined in the Asia-Pacific. In Singapore, it has just four - Sheraton Towers Singapore, St Regis Singapore, The Westin Singapore and W Singapore-Sentosa Cove.

But while it will start by focusing on getting on board operating hotels, its Tribute hotels in Asia may see a bigger portion of new-builds compared to the rest of the world - simply because many of the developing markets here are driven by new-build growth, with new-builds making up a significant portion of their upcoming supply.

Most of the independent hotels under the Starwood banner are on management contracts, meaning that Starwood is the hotel's service provider and runs the hotel by supervising and controlling the operations at the hotel level.

Globally, 60 per cent of four-star hotels are unaffiliated with a brand flag. In the US, nearly half the upper-scale hotels are independent. There are no readily available figures for this in Singapore.

Mr Sukumaran explained that in such tie-ups, either side can make the first move: a hotel developer may approach Starwood to have its brand come under Starwood, or Starwood could approach the developer. The biggest benefit independent operators get is the ability to leverage Starwood's international distribution channels, sales platforms and loyalty programme.

Starwood plans to have its Tribute properties located in high-demand markets where its loyalty members go to, but where Starwood still has little or no footprint.

Nine in 10 of the Starwood Preferred Guest members it surveyed recently said they particularly like to stay in independent hotels for leisure travel and special-occasion trips to unique destinations.

In the US, their wishlist of destinations include Florida and Caribbean resorts, the California wine country, Las Vegas and the boutique markets of Savannah, Georgia, and Charleston, South Carolina.

Globally, they liked Alpine ski markets, African safari retreats, South-east Asian resorts, northern Europe (especially the Nordic countries), South America (led by Rio de Janeiro, São Paulo and Buenos Aires) as well as primary Asia markets such as Tokyo, Hong Kong, and Singapore.

Mr Sukumaran said: "The key characteristic of independent hotels is their distinctive flavour and guest-centric hospitality and the local and indigenous experience you get out of it.

"What they might lack in guarantee of consistent quality, Starwood can lend by giving a stamp of approval, so guests will know that they can get the independent experience while still being assured of a certain quality."

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