Market Overview

Starwood's Affiliated Hotel Group Takes On Sector Competitors

Starwood's Affiliated Hotel Group Takes On Sector Competitors

On Thursday, Starwood Hotels & Resorts Worldwide Inc (NYSE: HOT) introduced Tribute Portfolio, a new brand for high-end hotel owners to remain independent while taking advantage of the Starwood's marketing network and Starwood Preferred Guest (SPG) loyalty points program.

Starwood stands to receive an approximated 10 percent cut of room revenues under this "soft brand" arrangement – where the property doesn't actually fly a Starwood flag – and hopes to add 100 Tribute hotels globally over the next five years.

Tribute Portfolio properties will be located in high-demand destinations and markets where SPG members travel and Starwood currently has little or no footprint.

Related Link: Starwood Hotels Introduces Tribute Portfolio

Tale Of The Tape – Past Year


Starwood's nine other brands include Sheraton, Westin, W and St Regis and are part of a 1,200-strong family of hotels located in over 100 countries.

On Wednesday, Starwood announced the opening of the Suiran hotel in Kyoto, which is the first Japanese property flagged under Starwood's worldwide Luxury Collection brand of 93 hotels and resorts.

The Luxury Collection was launched in 1994, and these properties are considered to be one notch above the new Tribute Portfolio target market.

Stiff Competition

According to the Wall Street Journal who broke the Tribute news Wednesday night, while this is the first new Starwood brand in nine years, competitors Marriott International Inc (NASDAQ: MAR) and Hilton Worldwide Holdings Inc (NYSE: HLT) have been active as of late.

"Marriott launched its soft brand, the Autograph Collection, in 2010, and it has grown quickly to more than 80 hotels worldwide, including the Triada Palm Springs and Cotton House Barcelona.

"Hilton introduced its brand, Curio, last year and says it has five hotels open and agreements for 23 more. Curio recently added the Hotel Astor Saint-Honoré in Paris to the collection," reported the Journal.

Related Link: Wyndham Vacation Ownership Takes Home ARDA ACE Community Service Award

C-Suite Changes

In February, Starwood's former CEO Frits van Paasschen stepped down; therefore, this initiative is being spearheaded by interim-CEO and board member Adam Aron.

The friction in the boardroom has certainly been a contributing factor to Starwood's recent underperformance versus its peer group.

First Tribute Property – REIT Owned

According to the company announcement, "The brand will make its debut today with its first featured hotel, the iconic Royal Palm South Beach Miami and will soon open new hotels in Asheville, North Carolina, Nashville, Tennessee, Savannah, Georgia, and Charleston, South Carolina.

"Dating back to 1939, the Royal Palm features 393 guestrooms, including more than 100 suites, two swimming pools surrounded by contemporary cabanas, a fully equipped gym, and more than 10,000 square feet of modern meeting and event space."

This iconic South Beach property was recently renovated and is owned by $1.9 billion cap Chesapeake Lodging Trust (NYSE: CHSP), a hotel REIT that currently pays investors a dividend yield of 4.4 percent.

Image Credit: Public Domain


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