Starwood Hotels Resorts Worldwide Marketing Essay

4381 words (18 pages) Essay

1st Jan 1970 Marketing Reference this

Tags:

Disclaimer: This work has been submitted by a university student. This is not an example of the work produced by our Essay Writing Service. You can view samples of our professional work here.

Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com.

Sheraton is completing a three-year global brand overhaul, which includes an investment of more than $4 billion in new hotels, renovations and signature brand initiatives in North America and another $2 billion in new hotels overseas. Highlights include:

70,000 new or newly renovated guestrooms — 50,000 in North America alone

More than 300 new lobbies featuring the brand’s innovative [email protected] experienced with Microsoft

More than 100,000 brand new Sheraton Sweet Sleeper all-white, high thread count beds in 211 hotels and 83,000 guestrooms worldwide

98 renovated properties, nearly half of Sheraton’s North American portfolio, including high profile gateway properties like the Sheraton Denver, Sheraton Boston, Sheraton Seattle Hotel & Towers and Sheraton Montreal and Sheraton Waikiki.

Sheraton Hotels & Resorts, like all brands within Starwood’s robust portfolio, is proud to offer the Starwood Preferred Guest program, which made headlines when it launched in 1999 with a breakthrough policy of no blackout dates on Free Night Awards. SPG offers members the ability to redeem awards at more resorts, more luxury properties, more European hotels and more golf properties than any other hotel program.

2009 Marks a Year of Meaningful Milestones in North America

Globally, Starwood is on a journey to open its 1000th hotel and resort, and the North America Division is reaching many of its own milestones along the way. Among the milestone openings achieved over the past 10 months are:

500th Hotel in North America: The St. Regis Atlanta

30th W Hotel Worldwide: W Fort Lauderdale

5th Element Hotel in North America: Element Denver Park Meadows

30th Aloft Hotel Worldwide: Aloft Tallahassee Downtown

100th Four Points by Sheraton in North America: Four Points by Sheraton Cambridge, Ontario

The remainder of 2009 will prove to be equally meaningful with hotel openings to include the highly anticipated Sheraton Puerto Rico Convention Center & Casino, Le Meridian Philadelphia, The St. Regis Resort & Residences, Deer Crest and W hotels in Boston, Hollywood and Vieques, Puerto Rico.

“Each of our new openings -from select service, to upper upscale, to luxury – are brand enhancing properties that will continue to provide owners and guests with the world class Starwood experiences they have come to expect,” said Denise Coll, President of the North America Division for Starwood. “These new properties, combined with our more than 500 existing hotels in North America, help ensure that Starwood is everywhere our guests want to be.”

Contributing to the strong hotel openings and new deal signings this year is Starwood’s developer-centric conversion focus. In 2009, Starwood’s quality conversions in North America have included the Four Points by Sheraton San Antonio-Downtown, the Sheraton Toronto Airport Hotel and Conference Center and W Washington DC.

Mission Statement

“A Global Branded Life Style Hospitality company that delivers branded consumer products and services in ways that are different, better and special.”

Statement of Company Values

“We succeed only when we meet and exceed the expectations of our customers, owners and shareholders. We have a passion for excellence and will deliver the highest standards of integrity and fairness. We celebrate the diversity of people ideas and cultures. We honor the dignity and value of individuals working as a team. We improve the communities in which we work. We encourage innovation, accept accountability, and embrace change. We seek knowledge and growth through learning. We share a sense of urgency, nimbleness, and endeavor to have fun too.”

Moving away from price-based competition and bed wars and focusing instead on emotionally relevant branding, the Company has clearly defined each of its brands with meaningful and powerful position, laying a path for ongoing innovation.

The Company is currently implementing an “asset right” strategy, as demonstrated by the sale of more than $5 billion in non-strategic properties over the last 18 months. At the same time, the Company has retained ownership of its most attractive assets that can be redeveloped or repositioned or possess vacation ownership opportunities. Starwood will continue to churn its real estate portfolio and as it mines the value in its retained assets those will be sold and other strategic assets will be purchased. 

The External Factor Evaluation (EFE) Matrix, the Internal Factor Evaluation (IFE) Matrix and the Competitive Profile Matrix are Stage One, or the input stage, that summarize the basic input information needed to formulate strategies. In the EFE, we focused on some of the top factors for Starwood such as a Significant present in top luxury markets, being a diversified group of hotels and their superior ratings by clients and employees. For the IFE we concentrated on important factors such as the Board of Directors can not be affiliated with an employee of the company, which allows them to make unbiased decisions because they cannot own any part of the company as well. These are paid jobs that do not have stock options like some of their competitors like the Hilton. Another important IFE for the opportunity side is that their diversity limits exposure to assets. With the decline in properties for example, when some major companies where concentrated in one area, Starwood has diversified to several major tourist companies and places of business to limit exposure to this. A current threat for the IFE is the Vacation ownership properties that due to the economic downturn could cause major problems.

External Factor Evaluation

Opportunities

Weights

Rating

Customer Loyalty

0.08

4

Focus on Franchising

0.05

2

Brand strength

0.09

4

Significant present in top luxury markets

0.012

1

Diversified Group of Hotels

0.018

3

Well position for further significant growth

0.03

3

Superior ratings

0.12

2

Guest Program

0.03

3

Hassel Free award redemption

0.08

4

Dedicated employees

0.09

3

Threats

Premier properties

0.04

2

Amount of rooms available

0.12

1

Cost Structure

0.06

3

Larger scale Hotel Company

0.03

1

Availability of capital is limited

0.06

2

Economic Crisis will have impact on long term growth of the time share industry

0.09

4

 

1.0

Internal Factor Evaluation

Opportunities

Weights

Rating

Diversification of cash flow and assets

0.06

3

Frequent guest program

0.03

4

Introduction of a ‘green’ program

0.04

3

Diversity limits exposure to assets

0.12

2

Employees are held accountable for actions

0.06

3

Disclosure committee that designs and maintains policies related to periodic reviews

0.03

4

Hotel Reservation Functions

0.06

3

Board of directors can not be affiliated with an employee of the company

0.12

3

Threats

Marketing and Selling Efforts put forth for vacation resorts

0.06

3

CEO recently resigned without taking incentive package

0.04

3

Changes in operating cost

0.08

2

Debt financing to property owners for renovations or conversions to a Starwood hotel

0.05

2

Undervalue hotel properties

0.09

3

Franchisees may purchase brand specific products via specific vendors

0.012

3

Vacation ownership properties

0.1

4

1.0

The other matrices used to evaluate Starwood Hotels, such as the SWOT Matrix, the IE Matrix, and the Space Matrix are used as the matching stage, or Stage Two, and focus upon generating feasible alternative strategies by aligning key external and internal factors that were used in the EFE and IFE. Using the IFE and EFE factors, for the IE Matrix, we concluded that Starwood was in Hold and Maintain.

In the SWOT Matrix, we included that one of their opportunities was Expanding Internet Presence. Sheraton Hotels & Resorts announced recently the launch of the new sheraton.com, the first hotel industry website to feature Facebook Connect and allow visitors to interact with their friends and family by sharing their travel experiences through today’s most popular social networking site. In 2006, sheraton.com became the first hotel industry website to embrace social media by featuring user generated content. Today, the brand continues to enhance the social media experience for guests by tapping into new social networking channels and enabling a two-way dialogue through the unique global travel community on sheraton.com. The launch of the new site is part of a $6 billion worldwide effort to revitalize the iconic Sheraton brand, including an investment of $2.3 billion in new hotels, $1.5 billion in renovations and $400 million in signature brand initiatives throughout North America.

The new site enables Facebook members to interact through sheraton.com over travel experiences by sharing stories, tips and photos about their best travel finds, destination favorites and passion for travel. Users can visit sheraton.com and now post their stories by logging into their Facebook account via Facebook Connect.

In the SWOT Matrix below, Strengths included customer loyalty and hassle free reward redemption. Although it took a serious recession and the near-collapse of the world economy, hotel companies are making their loyalty programs more attractive. As a result, loyalty travelers will be the recipients of some of the best incentives we have seen in years.

In 2002, 32% of guests said that the loyalty program was a key factor in deciding where to stay. That number has grown steadily to 37% in 2007 but has declined in the first 9 months of 2008. Among the major chains, the most effective programs in the hotel industry are Marriott Rewards, Hilton Honors and the Starwood Preferred Guest program. Starwood’s Preferred Guest has seen the biggest improvement (+6) in the past three years (2006-2008) compared to earlier years (2002-2005). Approximately one of every three guests at these hotels said their loyalty program membership was very important in hotel selection.

153024577

US hotel occupancy rates are already expected to drop 3% for 2008, which is why we included change in operating cost, cost structure and the recession for SWOT weaknesses and Threats. As the financial damage expands to other sectors in the economy, hotels are evaluating ways to reduce costs and protect revenues. While no loyalty program has been built to handle the looming recession, a few guidelines Starwood is using will help to make it more recession proof:

Eliminate fees to attract new members

Offer quicker and possibly immediate benefits to guests

Differentiate discounts that are available to everyone from loyalty program member benefits

Make sure members are aware of their benefits and feel they are receiving special treatment compared to non-members (e.g., special line to check in, welcome gift, upgrades)

In a recession, your best customers are even more important and Starwood knows that. When customers are easily distracted by lower prices or free add-ons at the competitor, emphasize the benefits of staying with your brand. This does not mean offer more discounts, instead, make sure your loyalty program offers sufficient benefits that motivate guests and impact hotel selection.

SWOT Matrix

Strengths

Weaknesses

1

Customer loyalty

 

1

Vacation ownership properties

2

Property management

 

2

Changes in operating cost

3

Significant presence in top luxury markets

 

3

Economic Crisis will have impact on long term growth of the time share industry

4

Well position for further significant growth

 

4

Availability of capital is limited

5

Hassel Free award redemption and Guest Program

 

5

Cost Structure

6

Licensing fees generation

 

6

Debt financing to property owners for renovations or conversions to a Starwood hotel

7

Resorts in metropolitan areas

 

7

Undervalue hotel properties

8

Starwood approves the location and design of all franchised properties

 

8

Franchisees may purchase brand specific products via specific vendors.

Opportunities

Threats

 1

Plans for international expansion

 

1

Decline in Hotel REITs

 2

Introduction of a ‘green’ program

 

2

Recession

 3

Expanding internet presence

 

3

Travelers fears exposure to contagious disease

 4

Diversification of cash flow and assets

 

4

Reduction of business travel

 5

Enhance Frequent Guest Program

 

5

Highly competitive market

 6

Diversity limits exposure to assets

 

6

Changes in operating cost

 7

Employees are held accountable for actions

 

7

Undervalue hotel properties

 8

Disclosure committee that designs and maintains policies related to periodic reviews

 

8

Vacation ownership properties

 9

Hotel Reservation Functions

 

 

 

SWOT Strategies>……………………..

SWOT Strategies

 

SO Strategies

 

 

WO Strategies

1

Add Properties Internationally (S2, O1)

 

1

Long term Growth will limit reservation functions (W3, O9)

2

Growth through Diversification (S4, O4)

 

2

Implement Frequent Guest Program for Ownership Properties (W1, O5)

3

Growth through Internet Reservation Channels (S4, O9)

 

 

 

 

 

 

 

 

 

ST Strategies

 

 

WT Strategies

1

Implement a competitive incentive package for loyal business customers that have reduced their travel (S1, T4)

 

1

Decrease in the availability of capital will limit the competitive market (W4, T5)

2

Combine Hassel Free Award Redemption with Vacation Properties (S5, T8)

 

2

Reduce focus on vacation ownership expansion (W1, T5)

The decision stage was conducted by using the Quantitative Strategic Planning Matrix (QSPM). The QSPM uses input information from Stage One to objectively evaluate feasible alternative strategies identified in Stage Two. A QSPM reveals the relative attractiveness of alternative strategies and provides objective basis for selecting specific strategies. The two main strategies we compared were to Expand Internationally or Renovate the Existing Hotels. After comparison, it was identified to expand internationally mainly because it will generate revenue in the long run. Due to existing properties being undervalued because of the decline in the Real Estate Market, it was decided that renovating Hotels would add some value but not enough to generate revenue. Renovating would be a better strategy in a booming economy.

SPACE Matrix

Financial Strength (FS)

 

 

+5

Cash Flow

 

 

+4

Leverage

 

 

+5

Liquidity

 

 

+4.67

Average

 

Total axis X Score: 1.00

 

 

Environmental Stability (ES)

 

 

-4

Access to New Financing

 

 

-5

Property Values

 

 

-2

Growth potential due to economy

 

 

-3.67

Average

 

 

 

 

 

Industry Strength (IS)

 

+5

New Technology

 

+4

International Growth

 

+4

Profit Potential

 

+4.33

Average

 

 

Total axis Y Score: 3.33

Competitive Advantage (CA)

 

-1

Market Share

 

-1

Brand and Image

 

-1

Management

 

-1.00

Average

 

 

 

 

 

 

 

+6

 

 

 

 

 

 

 

 

 

 

 

 

 

+5

 

 

 

 

 

 

 

 

 

 

 

 

 

+4

 

 

 

 

 

 

 

 

 

 

 

 

 

+3

 

(+1,+3.33)

 

 

 

 

 

 

 

 

 

+2

 

 

 

 

 

 

 

 

 

 

 

 

 

+1

 

 

 

 

 

 

 

 

 

 

 

 

 

0

 

 

 

 

 

 

 

-6

-5

-4

-3

-2

-1

0

0

+1

+2

+3

+4

+5

+6

 

 

 

 

 

 

-1

 

 

 

 

 

 

 

 

 

 

 

 

 

-2

 

 

 

 

 

 

 

 

 

 

 

 

 

-3

 

 

 

 

 

 

 

 

 

 

 

 

 

-4

 

 

 

 

 

 

 

 

 

 

 

 

 

-5

 

 

 

 

 

 

 

 

 

 

 

 

 

-6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A financial strong firm that has achieved major competitive advantage in dominating their industry

QSPM

Expand in International Markets

 

Fully Renovate Existing Hotels

Key Factors

Weight

AS

TAS

 

AS

Strengths

 

 

 

 

Franchising

0.10

 

 

 

 

Property management

0.10

 

 

 

 

Significant present in top luxury markets

0.15

4

0.60

 

4

Well position for further significant growth

0.05

3

0.15

 

1

Hassel Free award redemption and Guest Program

0.05

4

0.20

 

3

Licensing fees generation

0.02

 

 

 

 

Resorts in metropolitan areas

0.06

1

0.06

 

4

Starwood approves the location an design of all franchised properties

0.05

 

 

 

 

 

 

 

 

 

Weaknesses

 

 

 

 

 

Vacation ownership properties

0.03

 

 

 

 

Changes in operating cost

0.05

 

 

 

 

Economic Crisis will have impact on long term growth of the time share industry

0.08

4

0.32

 

1

Availability of capital is limited

0.10

1

0.10

 

2

Cost Structure

0.05

 

 

 

 

Debt financing to property owners for renovations or conversions to a Starwood hotel

0.03

 

 

 

 

Undervalue hotel properties

0.03

4

0.12

 

2

Franchisees may purchase brand specific products via specific vendors.

0.05

 

 

 

 

1.00

 

 

 

 

 

 

 

 

 

Opportunities

 

 

 

 

Plans for international expansion

0.2

4

0.80

 

1

Introduction of a ‘green’ program

0.1

 

 

 

 

Expanding internet presence

0.05

2

0.10

 

4

Diversification of cash flow and assets

0.04

3

0.12

 

1

Frequent guest program

0.08

4

0.32

 

4

Diversity limits exposure to assets

0.08

4

0.32

 

1

Employees are held accountable for actions

0.03

 

 

 

 

Disclosure committee that designs and maintains policies related to periodic reviews

0.03

 

 

 

 

Hotel Reservation Functions

0.05

 

 

 

 

 

 

 

 

 

Threats

 

 

 

 

 

Decline in Hotel REITs

0.03

 

 

 

 

Recession

0.01

4

0.04

 

1

Travelers fears exposure to contagious disease

0.04

2

0.08

 

1

Reduction of business travel

0.05

2

0.1

 

1

Highly competitive market

0.08

 

 

 

 

Changes in operating cost

0.08

3

0.24

 

2

Undervalue hotel properties

0.03

3

0.09

 

4

Vacation ownership properties

0.02

 

 

 

 

1.00

 

3.76

 

 

Starwood

Marriott

Hyatt

Critical Success Factors

Weight

Rating

Score

Rating

Score

Rating

Customer Loyalty

0.16

4

0.64

2

0.32

1

Quality

0.15

4

0.60

4

0.60

3

Property Management

0.18

3

0.54

2

0.36

2

Financial Position

0.17

4

0.68

3

0.51

4

Global Expansion

0.2

2

0.40

1

0.20

1

Market Share

0.04

1

0.04

4

0.16

3

Advertising

0.1

2

0.20

3

0.30

2

1.000

 

2.900

 

2.450

 

Financial Ratios

 

Starwood

Marriot

Hyatt

Current

0.73

1.31

1.03

Quick

0.5

0.84

0.77

Debt to Asset

0.67

0.69

0.62

Debt to Equity

2.08

2.28

1.67

Return on Assets

0.11

0.07

0.03

Return on Equity

0.34

0.28

0.08

Earnings per Share

4.88

1.54

1.5

EPS/ EBIT Analysis

Common Stock Financing

 

Recession

Normal

EBIT

1000

1500

Interest

0

0

EBT

1000

1500

Taxes

300

450

EAT

700

1050

# Shares

215.07

215.07

EPS

0.307

0.205

Debt Financing

 

Recession

Normal

EBIT

1000

1500

Interest

50

75

EBT

950

1425

Taxes

285

427.5

EAT

665

997.5

# Shares

213.48

213.48

EPS

0.321

0.214

50/50 Financing

 

Recession

NNormal

EBIT

1000

1500

Interest

25

37.5

EBT

975

1462.5

Taxes

292.5

438.75

EAT

682.5

1023.75

# Shares

214.27

214.27

EPS

0.314

0.209

Final Recommendation

Expand internationally to Europe and Asia

C:Usersjannette & cristinaAppDataLocalMicrosoftWindowsTemporary Internet FilesContent.IE5LVY55DBFMPj04100810000[1].jpg

Cite This Work

To export a reference to this article please select a referencing stye below:

Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.

Related Services

View all

DMCA / Removal Request

If you are the original writer of this essay and no longer wish to have your work published on the UKDiss.com website then please: