The revival of Starwood, first announced earlier this year, officially rolled out this month. The brand morph from the company’s original moniker of SH Hotels & Resorts comes amid a wider hotel industry embrace of the lifestyle and luxury sector.
But Starwood’s return means one of the lifestyle hotel sector’s biggest names is back at the center of the action with his best-known calling card.
While Marriott famously acquired Starwood Hotels & Resorts in 2016 for $13 million, Starwood founder Barry Sternlicht retained the rights to the brand’s name. While Sternlicht went on to found SH Hotels & Resorts, which operates brands like 1 Hotels & Homes and Baccarat Hotels & Residences, the return to Starwood—on the 10th anniversary of the launch of SH—isn’t a total industry shocker.
Marriott CEO Anthony Capuano told Hospitality Investor earlier this year Sternlicht informed the company of the plan a year ago.
“Reintroducing the Starwood Hotels name is personally very exciting for me,” Sternlicht said in a statement this month. “It’s a tribute to a legacy that millions of people know and trust—and it comes at a decisive moment in our company’s history.”
SH-turned-Starwood already has a leg up in the sector thanks to its luxury and lifestyle brand portfolio, which also includes the Treehouse Hotels brand. But Starwood 2.0 faces more competition this time around.
Other hotel brands and conglomerates leaning into luxury or loyalty program fandom often appear as trying to mimic what Starwood 1.0 and Sternlicht did with disruptive-at-the-time brands like W and the Starwood Preferred Guest loyalty program.
One must wonder if it’s even possible to stand out among the pack these days, especially when it seems like all the industry disruptors like Sternlicht and Ian Schrager and Standard International’s Amar Lalvani (now with Hyatt) are back at it. But the Starwood team emphasizes this comeback is not about making the brand another version of, say, Marriott or Hyatt.
Starwood 1.0 at the time of the Marriott takeover had a mix of luxury, lifestyle and affordable brand offerings that ran from St. Regis to Aloft and Element.
“It probably won’t be the same as it was before,” Starwood Hotels CEO Raul Leal said in an interview earlier this year at the Americas Lodging Investment Summit. “In our perspective, it’s more about the quality over the quantity.”
Details on Starwood 2.0’s future were light during the interview with Leal, and it remained that way this month when the company’s new logo and branding officially went live. But it appears Starwood’s return is about maintaining the brand’s reputation as an industry leader in innovation, as the company announcement touted Sternlicht’s history of expanding St. Regis into a global luxury brand while also ushering in innovations like the Westin Heavenly Bed (still a retail darling under Marriott’s ownership of the brand).
“Over the past decade, SH Hotels & Resorts has built three extraordinary brands, including the mission-driven 1 Hotels, which demonstrates how guests can live a luxurious, sustainable life without sacrifice,” Sternlicht said this month. “I didn’t want to do another typical hotel brand after W. The world doesn’t need another brand, it needs a better 1. By reviving the Starwood Hotels name, we aim to marry this trusted legacy of youth, innovation and guest focus with our modern, tech-enabled, personalized approach to hospitality.”
He added the new Starwood was about doubling down on the company’s mission to “inspire, innovate and make a difference.”
Leal teased a new brand might be in the works for Starwood, but he wouldn’t divulge specifics beyond expecting more growth opportunities to emerge when interest rates come down.
“Barry would kill me,” he joked. “There’s just stuff we’re working on that we toss around, and I think there will be other stuff.”
Some of that growth is likely to involve converting existing assets, something the brand has experience with. Starwood is currently underway with a conversion of Seattle’s Pan Pacific Hotel into the 1 Hotel Seattle.
The broader sustainability ethos at Starwood also lends itself to more eco-friendly practices.
“Maybe some assets reach some level of obsolescence, or maybe an owner’s hired a brand and wants to do something else, and then we’ll go in there because most of everything we’re doing is actually conversions,” Leal said. “There are a few new builds, and everything else is really conversions.”
But Leal hinted at where Starwood sees opportunities to make inroads in the luxury and lifestyle sector. Travelers are no longer accepting sky-high nightly rates if the services don’t match—and if they don’t feel authentic.
Legacy brands, beware.
“In the kind of luxury and upscale segment that we’re dealing with, [the guest] is going to pay the rate, but the experience has to be better than it was in 2019,” Leal said. “Hotels have to become a little bit multifaceted in terms of programming and activation values.”
Guests want everything from decadent spa spaces to live music venues with their stays. But younger travelers will detect if the build-out is thoughtful or if it’s a case of merely putting lifestyle lipstick on a pig.
“There are great brands out there with great legacies that have gotten to this point based on that legacy. Now, the consumer has changed a little bit,” Leal said. “If you put a DJ in the lobby in this luxury hotel and it doesn’t feel right, you’re going to miss the audience. It has to be curated and authentic in a way that speaks to their respective tone of voice, and then it’ll be fine. But if it seems inauthentic, it’s over.”
As to how Starwood will grow, the company clearly has access to cash thanks to its ties to Starwood Capital Group. The company is also open to outside investment to fuel further expansion.
That outside investment could come from established hospitality players or beyond.
“it’s not like we don’t have the capital to go ahead, but there could be some investors that we like that help us grow in tranches on the real estate side and take care of opportunities,” Leal said. “Maybe their money’s cheaper than ours.”
The industry as well as customers appear more than ready to check out what Starwood’s return might bring. This reporter has fielded numerous emails and social media messages from travelers, long lamenting the demise of the Starwood Preferred Guest loyalty program and expecting some kind of loyalty network revival that could be more guest-friendly than the competition.
Industry experts also see Sternlicht’s involvement as key to making this a success.
“The whole evolution of Starwood was really the genius of Barry Sternlicht. The traveling public knows the SPG program was a terrific frequent traveler program,” said Daniel Lesser, the CEO of LW Hospitality Advisors. “Starwood is a well-known brand identity, and not just within the lodging space. If I was betting, I would definitely put money on him being successful with this.”
But Lesser would also argue this isn’t a comeback.
Sternlicht has remained a player in hospitality all these years through SH as well as Starwood Capital’s investments.
“He’s never really left,” Lesser added. “Hotels are sexy investments, and he’s been very successful at putting his imprint on the lodging industry. There’s a lot more opportunity to be creative and put your imprint on a sector like lodging as opposed to office buildings.”
This article was originally published in the April edition of Hotel Management magazine. Subscribe here.