Alex Hawkes: In light of the current global economic conditions, how has business developed so far in 2008 for Starwood Group?
Michael Wale: We have experienced a good first half of the year so far. The world is a different place from where it was in 2007 and, considering all the external economic factors, we are confident that our performance mirrors that of the general economy.
Our growth is roughly half of what we originally forecasted but the credit crunch has affected consumer confidence and corporate travel in particular has declined. As a result, we have witnessed a strong swing across to online reservations as customers try to budget more accurately. To date our online business has experienced a 20% growth compared to the same period in 2007.
Alex Hawkes: What expansion strategies does Starwood have in store for the rest of the year?
Michael Wale: Starwood recently sold Turnberry hotel and golf resort to the Dubai-based investment firm Leisurecorp. The move was part of Starwood’s strategy to churn our real estate – we owned Turnberry, found an investor willing to take it to the next level, and then secured a long-term 50-year managerial agreement. Turnberry is a good example of our growth strategy, which is to use capital to acquire long-term management agreements.
In terms of future growth, we have announced the opening of the Westin Birmingham, which will be completed by about 2010. This will be the first Westin hotel in England and we believe that Birmingham is a strongly evolving market.
We also have several interesting leads in other cities in the UK, including Manchester, Chester, Liverpool and Glasgow. Developers are interested in our brands. We hope to make announcements in the UK later this year.
Alex Hawkes: How are such strategies implemented on a global basis?
Michael Wale: We hope to have 1,500 hotels worldwide by 2013, which reflects how important growth is as one of our key strategic targets. We have about 600 hotels in the pipeline at the moment so we are on target to achieve this.
Major development markets include China, India and the Middle East – where we are witnessing huge levels of growth.
Alex Hawkes: In what ways is Starwood Group implementing new technologies to enhance guest comfort at its hotels?
Michael Wale: I think we are at a time when new technologies are challenging the hotel business, giving new ways to create what we term digital comfort for our guests. We want to empower our guests in our hotel rooms and we are evolving strategies to do precisely that.
For example, we need to ensure that our bandwidth is sufficient to enable our guests to use their own personal technology, which we have often found they are doing. The traditional pay-per-view entertainment system is also going through a transition. We are looking into implementing connectivity panels that allow guests to use the room’s flat screen as their monitor. Also, as guests continue to travel with an increasing number of chargers, we may introduce jack packs to provide such
Alex Hawkes: On an operational level, how does technology influence the day-to-day running of the hotels?
Michael Wale: We have a standardised technology platform from which all of our hotels operate. This allows us to have flexibility and mobility of staff across all of our businesses.
An in-house programme called Star Guest Plus allows staff to input any issues and track their progress. This also allows for greater performance reviews and ensures that we are operating on a timely basis.
As of April, customer satisfaction levels for all our brands have reached their highest levels. I think that fact can be attributed to the performance monitoring from our technology solutions and the increased staff training we have given in the past 18 months. We are trying to bring our brands alive by giving staff branded training.
Alex Hawkes: In what ways does Starwood Group differentiate its nine brands and is this reflected on each of its websites?
Michael Wale: All of our websites have been relaunched in the past 12 months, each with their own unique design linked to the brand. The websites match each brand’s persona, so while a Westin will give you an unwinding experience, a Sheraton will offer a comfortable but connected experience and a W hotel will offer an insider lifestyle experience.
After we relaunched the Le Meridien website, the site experienced a 29% increase, which bucked the normal trend of redesigns where revenues tend to dip as customers get accustomed to the new design and functionality.
New features on some of our websites include webcams at several of our destinations. This allows customers to get an inside and outside visual feel for the hotel before they arrive. So far we have 50 webcams worldwide and we will be increasing this number to 100 in the future.
We have also launched Starwood Preferred Guests, which is our frequent traveller programme. Regular customers can log onto our blog and find travel tips, enabling us to interact with them on a more personal level.
Alex Hawkes: How pivotal will technology be to the future of Starwood Group?
Michael Wale: Starwood Group has always recognised technology as a key differentiator. We have a strong use of technology in our history and are launching our fifth-generation reservation system.
We have an innovation and blue skies group based at our headquarters in White Plains, New York, which is constantly researching new ways to implement technologies within our brand.
Starwood is renowned for its technology and innovation – it has always been part of our culture and will be in the future.