Starwood Hotels & Resorts Worldwide Inc., whose chief executive officer resigned in February amid slow growth, is adding a new high-end brand to expand its reach globally.
Starwood Hotels, owner of such names as Sheraton and W, expects to add 100 properties in the next five years under the new Tribute Portfolio brand, debuting with the Royal Palm South Beach Miami, the Stamford, Connecticut-based company said in a statement Thursday. The company’s 10th brand will focus on four-star properties in the upper upscale category, with an initial concentration in North America and Europe, Starwood said.
Former CEO Frits van Paasschen, who resigned in February, was slow to expand through brand additions to reach new markets or add hotels in existing ones, according to Nikhil Bhalla, an analyst at FBR & Co. The hotel company said at the time that it needs new leadership to “accelerate Starwood’s growth, improve performance and sharpen our focus” on its operations.
“Companies launch new brands as another way to grow,” Bhalla said in an interview before Starwood’s announcement. “There are only so many Westins you need in one place. A new brand helps increase the footprint in an area you already have all your other brands in.”
Starwood, now led by Adam Aron, said Tribute Portfolio properties will be located in high-demand areas and markets where members of Starwood’s loyalty program travel but the company has little or no presence, according to the statement.
“We know exactly where they’re telling us to be -- Paris, London,” Aron said at a presentation to announce the brand. “I’d love to see a Tribute hotel in London as soon as we can.”
The next hotels for the brand will be in Asheville, North Carolina; Nashville, Tennessee; Savannah, Georgia; and Charleston, South Carolina, Starwood said.
Starwood has been lagging behind competitors in revenue and hotel-count growth. Starwood’s fourth-quarter revenue fell 0.9 percent from a year earlier, compared with increases of 7 percent at Hilton Worldwide Holdings Inc. and 11 percent at Marriott International Inc.
Marriott, as part of its expansion, acquired Cape Town-based Protea Hospitality Group, started the European boutique budget chain Moxy and bought Canada’s Delta Hotels and Resorts.
Starwood on Wednesday announced the opening of Suiran, a Kyoto hotel that’s the first Japanese location for the company’s Luxury Collection brand of more than 90 hotels and resorts in 30 countries.