Bold vision and a commitment to innovation has put Starwod Hotels and Resorts on top
Company of The Year
Newspapers, school textbooks and sports almanacs are filled to the brim with endless tales of clutch performances. They’re the ones everyone remembers: the stories of long odds, unlikely victories and impossible situations; pressurecooker moments that can break careers or make heroes.
The business world, too, has had its share of such stories — particularly over the last two years. Ask Stephen Foster, senior vice-president, Operations, Starwood Hotels and Resorts what the climate looked like from his vantage point, and he’s quick to admit “Times have been difficult, especially coming out of 2009, which was probably the most challenging year any of us ever had,” he says. “There we were, with all these huge buildings, filled with staff but very few guests.”
Foster’s comments undoubtedly reflect what many hoteliers experienced, but while other companies retrenched or retreated, Starwood and its stable of brands came out swinging, making bold moves in 2009 and 2010. Foster and his Canadian team looked for a game-changing performance, by opening new properties in strategic markets across the country, refocusing and redefining Starwood’s world-class service culture, and finally, by stubbornly refusing to dial back on the innovation guests have come to expect, since the introduction of the Heavenly Bed some 10 years ago.
As a result, the company portfolio — which included 50 Canadian hotels at the height of the market in 2007 — today boasts 59 properties, under household brands such as Westin, Sheraton, Four Points, W and Aloft. With 2009 sales in Canada of $731 million, ranking it as the fourth largest company on Hotelier’s Top 50, this is a group that doesn’t feel like a lumbering giant rising after a 24-month nap, it reflects the attitude of an outfit already in stride. And, the numbers back it up.
RevPAR at the company’s North American properties started climbing from recessionary lows in the first quarter of 2010, picking up steam from five per cent growth in the first quarter, to 14 and 12.5 per cent increases in the second and third quarters, helping push global revenue up $281 million or 7.9 per cent year-to-date.
While the recession of the past two years forced many companies to stall development, Starwood has been bold in launching a number of brands in new markets. Led by Four Points openings in Calgary, Saskatoon and Niagara Falls, 2009 and 2010 also saw the unveiling of Le Westin Montreal, a touchstone property for the city, the rebranding of The Hotel Newfoundland in St. John’s with a Sheraton flag and the opening of the Westin Wall Centre Vancouver Airport, where the ribbon was cut just in time for the 2010 Vancouver Olympics.
While deals have been harder to come by over the past year, the company remained focused on what Scott Duff, senior director of Development, Canada and Alaska, calls its “right property, right partner, right place” mantra. “In the past year or so, we’ve had a few major successes that have been very exciting for us,” he says of the Westin Montreal and the new Sheraton in St. John’s in particular.
Despite the hard-fought success, Foster says the expansion witnessed amid the tight credit markets is just the tip of the iceberg of what he sees as enormous opportunity for growth, particularly given the kind of international run Canada’s had. “There is, and will be, a lot of capacity for us to grow our brands in this country,” he says. “If you look on a global level, the 2010 Olympics put the county on the world stage, as did the G8 and G20 summits. Moving forward, we’ve got the Pan-Am Games to look forward to, so Canada is a pretty hot PR commodity right now.”
Foster predicts all of the added attention will translate to renewed demand. “There are markets in this country that are still under-served, and as you travel around and see the kind of infrastructure that’s present in secondary and tertiary markets, it’s amazing. The opportunity for growth is there, and with brands like Aloft, Element and Four Points, we have an exciting product to fill that capacity.”
And fill it they will, as Duff points out the company’s 2011 pipeline of eight properties nationally, includes everything from a splashy new Sheraton in Red Deer Alta., a Westin for Niagara Falls, and the expansion of Starwood’s Aloft brand, with new, 136-room hotels in Vaughan, Ont., and Laval, Que.
While Foster and the Starwood team are keeping a keen eye for development in tertiary markets, Canada’s largest centres are on the radar, too. “Even with our biggest brands, there are opportunities out there that e’re always looking to develop,” he says. “Quebec City doesn’t have a Westin, and Winnipeg doesn’t have a Sheraton, for example. Plus, we have a W in Montreal, but we need to have one in Toronto and Vancouver as well. We’re very bullish for all of our brands in Canada.”
Having already shifted the way travellers feel about their guestroom with the introduction of the various Heavenly products over the last decade, Starwood is clearly no stranger to changing the rules of the hospitality game. And, while others spent much of the past two years simply surviving, Starwood spent that time pushing the boundaries. But, these days, instead of augmenting the guest experience after the suite door goes click behind them, Starwood is concentrating on what takes place in the public space, too.
The Westin brand was first out of the gate, with the North American roll-out of a superfoods focused menu in 2008. “It’s been a renewing program for our customers, and it’s been very refreshing for the hotel,” says Ashok Baghel, general manager of Toronto’s Westin Prince Hotel. “With business people leading such hectic lives these days, good food often gets neglected. A hotel offering menus with this health and wellness focus has been very well received by all of our clients. In fact, we find that because of it, many of them go out of their way to seek out the Westin brand while travelling.”
Continuing with the trend into 2010, the program was augmented with a superfood-based cocktail program this past summer for the road warrior who wants to keep fit but could also use a Mojito after a long day of conference seminars. A total of 70 Westin properties across North America moved the trend behind the bar, with a list of cocktails utilizing superfood mainstays like blueberries, ginger, honey and green tea.
Plus, on a bricks-and-mortar level, guests enjoying their lunch — heavy on avocado and pomegranate —while sipping on green tea and fruitinfused mojitos, are now doing so in swankier surroundings, as Westin also revamped lobbies in landmark properties such as Toronto’s Westin Harbour Castle and The Westin Prince Hotel. Rich wood tones, natural materials and welcoming lounge furniture now greet guests, enveloping them in a familiar but luxurious setting.
Not to be outdone, the Sheraton brand, too, saw its fair share of exciting lobby changes in the form of the Link@Sheraton, an initiative that takes the business centre out of the basement and establishes it as an open concept part of lobby life. Far from being a vacuous open space to pass through on your way to your room or the restaurant, Sheraton lobbies are now places to relax, connect, work and socialize.
This renewed focus on tech-savvy hostelry is also mirrored by the introduction of a cutting-edge virtual conference suite in the Sheraton Centre Toronto, which connects business people via a video link to colleagues sitting in similar installations at Starwood properties across the globe, with such striking realism, guests feel like they’re all in the same room.
Nora Duke, president and CEO, Fortis Properties Corporation, owner of the newly re-flaged Hotel Newfoundland says that an innovative spirit was a major factor in the decision to join the Sheraton family. “Starwood Hotels and Resorts ranks very high on product and service innovation and customer centricity,” she says. “Recent innovations, as well as the brand’s SPG (Starwood Preferred Guest) customer loyalty program is indicative of Starwood’s focus on connecting with customers. As an owner/operator, brand fit is a strategic business consideration of ours, and we are pleased to have Starwood as a key business partner,” she adds.
But, after all of the numbers are crunched, and the new programs unveiled, it’s Starwood’s people, who make it work. And, with programs such as Starwood University, an online training module accessible to all employees, Trevor Bracher director of Service Culture says Starwood associates are well-equipped. “For us, great service is about finding a way to create a culture among our associates that drives service forward to the next level,” he says. “To be as innovative as possible, our associates have to feel confident enough to take risks.”
According to Bracher, this year, that meant making sure everyone felt as secure as possible. “To us, service culture doesn’t end at the desk. How we as a company affect the associate has a direct translation to how they, in turn, deal with the customer.”
It’s obviously been a winning formula, as Foster credits Starwood’s Canadian family of 5,000 associates, with the company’s success. “Our people rose to the occasion during the worst of it.” he says. “Across the hotel industry there is plenty of innovation, but, at the end of the day, our customers tell us, it’s always about our people. Everyone has great beds and curved shower rods, but no one else has our people; they’re the ones who create memorable experiences.”
If nothing else, business at Starwood is about creating memorable experiences for everyone. That same attitude extends to the company’s charity work, which involves staff and even hotel guests in various fundraising activities. For example, next June, a Starwood team of 13 will take part in the annual Ride to Conquer Cancer, an event which has been opened up to customers who want to ride along, and many have said they will.
Perhaps seeing a massive hospitality giant operating grassroots fundraising with its guests shouldn’t be surprising, yet somehow, the image of a corporate executive sweating it out between Toronto and Niagara Falls with a group of guests and employees seems, at first blush, incongruent. But no so for Foster and his team, who hold the guest experience as paramount. But for his part, Foster puts this and other clutch performances this past year more numbly: “We’re in the people business. This is our job every day.”
photography by may truong