Starwood Hotels re-examines its branding focus

WHITE PLAINS, NY—Early in the decade, Starwood Hotels & Resorts Worldwide was among the large multi-brand companies to successfully build its marketing strategy around brand differentiation, with each of its six brands at the time having its own defining characteristics and target customer.
Fast forward to 2009 and the industry is suffering from a deep economic recession and, consequently, drop in demand. Accordingly, HOTEL BUSINESS® recently followed up with Starwood’s chief brand officer, Phil McAveety, to see what impact, if any, the downturn has had on the company’s branding strategy, especially now considering Starwood has nine brands under its umbrella, including Le Meridien, Aloft, Element and W Hotels.
“The slowdown actually makes it a lot more important, not less. But we have to approach it in a different way,” McAveety said about branding. “We’ve begun looking at all our brands again and their individual lifestyle promises. We’re asking, ‘What are the things that really differentiate this brand not only from all our other brands, but from the competitors in their segment?’ We specifically want to know what’s unique, special, and central to the brand?”
Starwood, for example, singles out Sheraton, its largest brand, for the social environment it creates. “‘Life is better when shared’ is our thought around Sheraton,” McAveety noted.
At Starwood’s Westin brand, the messaging is around preserving wellness while traveling. “Starting with the launch of the Heavenly Bed, Westin has been about delivering on health and well-being,” McAveety said.
And more than ever, the focus is squarely on the intended consumer across all brands, McAveety added. “We’re working to really identify the qualities in each brand that deliver a direct benefit to the customer. Then we look at everything else we’re doing and say, ‘OK, times are tough. We may have to give up some things, but they won’t be things that give a brand a huge sense of differentiation,’” said the executive, who joined Starwood last year. “Because when the economy turns up again, we want to have a sense of brand left.”
The brand strategy remains in force in both domestic and international locations. “We’ve always taken a global approach, in part, because our most frequent travelers are likely to experience a brand in more than one country, maybe multiple countries. So we work to have a common platform for the brands, though we interpret it in different ways in different markets,” McAveety said.
Yet here too there’s more of a sense of urgency. “Since markets are down around the world, you want the brand positioning to be even clearer,” McAveety continued. “People are going to be more selective now. And it becomes even more important as we start to come out of the downturn. Frequent guests, in particular, know to expect the quality and consistent service delivery. If they don’t get that great delivery during this period, they’re going to remember. You have to take the long view.”
Even in good times, owners tend to chafe at the new standards that the brands introduce and then insist they implement. With the onset of hard times, those complaints have only gotten louder and more intense. But McAveety is sympathetic. “We’re sensitive to the needs of owners in this regard because owners are our partners. Frankly, we don’t exist without them and they don’t exist without the hotel companies. So we have a mutual interest in ensuring each other’s not just survival, but future prosperity,” he explained.
At the same time, owners choose to align with Starwood brands based on the offering those brands make. “Consequently, we’re going to hold the line on certain brand standards that we believe are central to the delivery,” he stated.
Starwood also understands that the current times demand the franchisor be pragmatic. “If there are new brand standards that are intended to be implemented by this June, for example, maybe we could push back the timing and delay implementation? And on occasion if the change falls into the ‘nice to have’ bucket rather than the ‘must have’ bucket, we’ll delay it or cancel it altogether,” said McAveety, who earlier in his career had been a vp of marketing for Nike, Inc. with responsibility for Europe, the Middle East, and Africa. Consequently, he has strong international credentials. He also held various marketing roles at the Leo Burnett International advertising agency.
McAveety counts the company lucky that Starwood’s new brands, Aloft and Element, were already launched when the economy started to falter. Other companies have continued to roll out new brands since, but haven’t been able to get many projects, if any, into the pipeline, no less up and running. “From our perspective, we have further opportunities to grow both brands going forward. We’ve got tail wind,” he said.
McAveety zeroed in specifically on the lifestyle boutique segment, where Starwood is aggressively expanding its W Hotels. “I’d much rather be in our position, taking an established brand and blowing it out globally, to launching a brand in that space with no proven track record,” he said.
“At the same time, we welcome the competition because it will keep us sharp. We’ve had this space somewhat to ourselves. But if the big hotel companies want to work in the space, it’s going to raise our game as well,” McAveety added—without mentioning by name either Marriott International and Ian Schrager’s new Edition brand or Hilton Hotels Corp.’s just-announced Denizen brand.
“The fact that we had deals for W signed before the downturn forced deal-signing to slow down is going to help us,” McAveety added. “A lot of our projects were in the ground and developers are going to finish those projects.”