Starwoods Hotel and Resorts is employing a unique strategy in India; while it will manage its strongest brands, it will franchise out the others
When you step in to any of the eight Le Meridien hotels in India, indeed any in the world, you should be able to smell almost as soon as you step into the lobby — emerging through a portal, an art work usually, at the hotel entrance — a peculiar scent of old books and parchment in a library. The scent machines in the lobby, not always visible except to the most discerning of the guests, are there to get you in the “right frame of mind” in sync with the hotel chain’s positioning as a destination for “guests who seek out a new perspective and cultural discovery in their travel experience”.
As you step into the lift, there will be more such psychological tinkering. The music that you may hear in the elevator would most likely not be the usual piped strains that you come across at other places. Instead, it may include the sound of “horses galloping in water” — unusual enough for you to talk about it later with the barman! And finally, when you take out your room key it may enable you not just to unlock your hotel room but also a museum or art gallery in the city.
All these represent a carefully thought-out strategy on the part of Starwood Hotels and Resorts to position its brands. Starwood is one of the world’s largest hospitality companies that owns several well-known brands: St Regis, Luxury Collection and W (a brand favoured by the young affluent traveller, likely to make its India debut soon) in the top-end luxury segment; Westin, Meridien and Sheraton in the upscale market; and Four Points and Aloft aimed at domestic corporate travellers of which you will see a profusion in the country pretty soon.
In India, Starwood operates 21 hotels — eight Le Merediens, seven Luxury Collections, four Sheraton hotels, one Westin and one Four Points. It plans to have 14 more by 2011: Six Westins, five Alofts and three Sheratons.
Though it has grown at a fast clip across the world, and nowhere as much as in Asia-Pacific, Starwoods is in the process of reducing the percentage of properties owned by it from 15 to just 5 per cent. Instead, it has chosen to franchise its brands to “suitable partners” worldwide or sign management contracts to run its flagship brands. “Our new strategy in India,” says Starwood Vice-president (India, Nepal and Bangladesh) Don Elliot, “Is to manage our strongest brands here, while franchising out the others.” While it is certain that it will run a top-end brand like St Regis on its own, for upscale and mid-market brands, it could look at either of the two options.
On its own
For the moment, Elliot has his task cut out — every brand has to create a distinct position for itself. It’s certainly not easy. The hotels under the Starwood umbrella market themselves individually, even though there is a centralised system at work to look at inbound travellers. Two, price distinctions tend to get blurred in many markets. And this complicates the marketer’s task.
Elliot says Starwood’s strategy has always been to build distinct brand identities. This it does by focusing on psychographic and not demographic distinctions between guests. “Our brand identities are very strong and guests tend to be loyal to a particular brand.” Someone who prefers a W, for instance, described, even in corporate language as flirty, seductive and sexy, is hardly likely to go for a bespoke St Regis, however exclusive that may be, or a hotel from the Luxury Collection that often sells an indigenous or heritage experience, and certainly not to a Meridien, where, in keeping with the French roots of the brand, the emphasis is on culture. Each brand, thus, has a different positioning that caters to different types of guest psychographics.
Innovations and revamps in individual hotels are now being undertaken in keeping with these attributes so that the position of each brand is distinct and clear. While Le Meridien hotels worldwide have been in the process of such an upgrade, others too will have interesting and unique experiences to offer. In this context, Eliott mentions a new innovation at all the Sheraton hotels worldwide, including those in India, called Link@Sheraton.
“At all the hotels,” he says, “you will find the business centre inside, somewhere in an enclosed area.” However, at the Sheraton, positioned so as to attract “life enthusiasts who want to be connected online as well as offline when they travel, a “social” environment will be provided in the hotel lobby, so that it becomes a space for guests to hang out, socialise, check their e-mail, work on their laptops or hold meetings, or just watch TV.”
Such innovations have helped Starwood improve its brand equity in the past. Take, for example, the Heavenly Beds at the Westins. These became so popular and so indelibly associated with the brand that Heavenly merchandise and experiences are now trademarked to it! In 1999, the launch of the Heavenly Bed, equipped with a 10-layered mattress to ensure a good night’s sleep for a guest, not only jump-started bed wars amongst hotels in America but also the concept of hotel retail. In the decade since then, Starwood has sold more than 30,000 of these substantially-expensive beds, 100,000 pillows as well as other lifestyle offerings all branded Heavenly —cribs, showers and even dog beds! This year, to mark a decade of such branding, more of these product line-ups are being offered, apart from special promotions.
The Asia-Pacific region is where Starwood is now looking for growth. This year, the company will open its 1,000th hotel worldwide, and, Elliot hopes, it may just be in India. “It will all depend on the timing… which hotel gets finished first, where. But if it happens to be in India, it is only going to be appropriate,” adds he.
The new hotels planned for India include five Alofts, a simple, no-frills brand “with the DNA of a W”, says Elliot. In other words, these will be stylish yet affordable hotels for business travellers. In the US, says Eliott, the Aloft may not be a full-service hotel but “in India, guests like to be served and pampered, so we will change that.” The hotels will come up both in primary and secondary markets to cater to domestic business travellers, a market segment where, Elliot agrees, the potential is huge but untapped. The hotels will all be new constructions, not older, acquired properties.
So, will Starwood focus on the mid-market and budget segment only, business travellers, not high-end leisure travellers? And what about setting up a St Regis in India? Or even the cutting-edge W? Elliot says the company is in talks with real estate owners — a St Regis is being planned in Mumbai and several Ws — but, as of now, there are no dates forthcoming. “The luxury business will bounce back. At a certain level, luxury is recession-proof,” believes Eliott. For now, however, Starwood will be looking at the luxury and mid-market segments. “There is enough in both,” says Elliot.