Sheraton: a star in the ascendant27 September 2012
Fresh from a huge revitalisation project, Sheraton is embarking on a major international expansion, one that includes the largest internationally branded hotel in the world, according to global brand leader Hoyt Harper.
The Sheraton brand has a long and well-established reputation, but has shown in recent years that it is not content to rest on its laurels. The opening of the Sheraton Macao, the world's largest internationally branded hotel with 3,896 rooms, is just the latest milestone in a process of expansion and refurbishment that is positioning the brand for the future.
A $6 billion programme of revitalisation for its existing properties, which resulted in the relaunch of the Sheraton Grand Hotel & Spa in Edinburgh after an extensive renovation process, has laid the ground for a vigorous phase of expansion that will add over 50 hotels and 20,000 rooms in the next three years, as the brand pumps more than $4 billion into new properties across four continents.
"Sheraton is Starwood's flagship brand and accounts for over half of the group's rooms," says Hoyt Harper, Sheraton SVP and global brand leader, as he prepares to depart for the Macao opening party. "It is the longest established hotel and has an iconic presence. Our guest profile is broadening among business and leisure travellers, alongside a loyal customer base developed through the Starwood Preferred Guest programme.
"Our focus is on owning the upswing. Times have been hard in terms of the economy, but we are investing during the downturn in order to be well placed for the recovery. That means investing in emerging markets and expanding in mature areas, like Europe and the US. We want to build a more balanced portfolio across the globe, so we need to revitalise the properties in established markets to ensure that they are as fresh as the new hotels."
It is a brave person who bets with any certainty on the exact timing of the upswing, but Sheraton's plans are based on a belief that economic conditions will steadily improve, led by some of the emerging economies where rapid growth has been the norm for many years. Already well versed in opening up new markets, the brand is using its experience to build a presence in the BRIC countries and other markets where there is the potential for economic growth. Early signs suggest that this strategy is already starting to bear fruit.
"Occupancy rates are already recovering and we are moving into markets where the economies are healthier," explains Harper. "For example, we are targeting the emerging middle class in China, and the increasingly wealthy populations of India and Brazil. International business is returning and we expect China's growth to not only support a healthy domestic market, but also to generate more outbound business."
Building a hotel brand for the future
The extensive revitalisation programme that began in 2008 was based on the premise of embedding Sheraton's core values - warm, connected, community - into all its properties, old and new. Having worked to gain valuable insight into what its customers want from the group's hotels, brand leaders felt that it was important to provide the spaces and facilities that enabled further guest connectivity.
The underlying message is that life is better when it is shared, and that the ability to connect easily with their fellow guests makes people happier and more productive. The Edinburgh hotel, which is one of the brand's flagship properties and the latest in Europe to benefit from a full renovation, is a prime example of how Harper and his team have put this principle into practice.
All guestrooms have been refurbished and over 15,000ft² of meeting and event space added, along with a new restaurant and bar. It embodies the brand's desire to appeal to business and leisure customers, while reaching out to the local population. In keeping with this ideal, it has been given a breezier, contemporary feel, with modern materials, clean lines and a neutral colour palette, all underscored by traditional Scottish decorative elements.
Each of the hotel's 269 rooms has been kitted out with state-of-the-art technology, while the property also has a newly installed Sheraton Club floor, where Club guests can enjoy their own lounge for meals and drinks. The new meeting and events complex has 14 flexible rooms, making it the city's largest conference and banqueting venue.
Networking and connecting
According to Harper, the programme is about more than just refurbishing the properties; it is about enhancing what makes Sheraton different from its competitors.
"Sheraton is 'the world's gathering place' and hosts all kinds of events, from family weddings to G20 summits," says Harper. "Our guests are people who like to socialise, so we focus on creating unique public spaces.
"For example, the [email protected], sponsored by Microsoft, is our way of focusing on networking and connecting people. We also want to improve the incorporation of other spaces like bars and restaurants. In Edinburgh, we linked them to the space outside the hotel, so that they are not only for the guests to use, but also for the public to come in and enjoy."
The [email protected] provides a communications hub in the hotel's lobby, with PC workstations and complementary Wi-Fi. This certainly addresses guests' desire to connect, and further developments have targeted other priorities, such as health and fitness. Over 60% of Sheraton guests want a place to work out, which has resulted in an emphasis on new spa and workout facilities, which are available to guests and the public.
"We have also extended meeting facilities at properties like Edinburgh, and with the revitalisation comes an enhanced food and beverage offering, again to attract the local community as well as to serve our guests," explains Harper. "We want our hotels to be an active part of their communities, and we have already seen some success in achieving this through the revitalisation project."
Starwood's largest property
The revitalisation programme is aimed at keeping existing properties in line with the specifications of the many new establishments that the brand is adding, including the new Sheraton Macao.
"The Macao property is by far the largest that Starwood operates," says Harper. "It is the largest opening outside of Las Vegas in over a decade."
As well as being the brand's biggest property, the Sheraton Macao has the largest Sheraton Club in the world, with 570 rooms and suites, and three restaurants serving a range of Asian, Italian and international food. The opening reinforces the presence of Sheraton in Asia. It operates more than 100 properties in China and has plans to double its footprint with another 100 already in the pipeline, including the Sheraton Shanghai Hongkou Hotel, the Sheraton Qingdao and the Sheraton Guangzhou Huadu Resort.
"Over 40 properties will open by the end of 2013 in places like Dubai, Saudi Arabia, Russia and South America, as well as in more established markets like the US," Harper explains. "In total, there will be new properties in 15 countries, but over half will be in China. All will have our signature guest experience, including the design of guestrooms and the Sweet Sleeper beds."
Emerging market penetration
If the brand is to achieve the global rebalancing of its portfolio that it seeks, then emerging markets will play a vital role. Sheraton has a wealth of experience in such markets, which could prove vital as it invests in these economies in its effort to ride the global economic upturn.
"Sheraton was the first international brand to go into China, the Middle East and South America, and as a global company, we lead with the Sheraton brand when we grow," says Harper. "Enhancing Sheraton enhances Starwood. The first-mover advantage in emerging markets makes us the go-to company, so we are the preferred partner for properties in China, India, Africa and the Middle East."
The huge expansion that Sheraton has planned for the next few years will not be the end of the story. Continued growth is on the cards, which is testament to Starwood's belief in a bright future for the hospitality sector as the global economy improves. Its willingness to invest in the downturn with an eye to long-term growth is a clear indicator to its competitors that it is determined to stay one step ahead.