Starwood Hotels & Resorts Worldwide, Inc. has said the company will open 20 new hotels in China in 2013. Having doubled its footprint here in the last three years, Starwood has 120 hotels open and more than 100 in the pipeline, making China the company’s second largest hotel market behind only the United States, and its fastest growing. Starwood President and CEO Frits van Paasschen who is in China this week participating in the Fortune Global Forum in Chengdu said the company will open one new hotel every 20 days here and that 70 percent of its pipeline of new hotels under construction and in development are in second and third tier cities. “We continue to view China as a once-in-a-lifetime opportunity for our business,” said van Paasschen. “Whether it’s growing our hotel footprint as part of the country’s massive infrastructure development, or aggressively building our loyalty program in the world’s fastest growing domestic and outbound travel market, we are focused on taking every advantage of our important first-mover position in China.”
Early Foothold in China Continues to Pay Off; Starwood Poised to Double Luxury Portfolio
Starwood’s presence in China dates back to 1985 when the Sheraton Great Wall Beijing debuted as the first international hotel in the People’s Republic of China. Today Starwood is the largest high-end hotel operator in China with more hotels here than competitors Marriott, Hilton and Hyatt combined. In 2012 Starwood opened 25 hotels and signed 36 new hotel deals – a record number of openings and deals.
With over 170 cities with population over 1 million, the runway to grow in China continues to be long. Adding to Starwood’s long established presence in China’s major cities, the company is focused on expansion in second and third tier cities. Starwood’s upper upscale Sheraton, Westin and Le Meridien brands continue to be sought after for new central business districts and government administrative centers in second tier cities. Starwood’s Four Points by Sheraton and Aloft brands fit well in newly developed high-tech, industry and university parks as well as near high speed railway stations and cities in early stages of urbanization, in addition to ongoing expansion in established markets.
Demand for luxury hotels throughout China
continues to grow and over the next few years Starwood will double its luxury footprint here. W Hotels, which just opened the W Guangzhou earlier this year, will open new flagships in Beijing and Shanghai as well as hotels in, Suzhou, Changsha and Chengdu. St. Regis, Starwood’s ultra-luxury brand, will build on its well established presence in China in markets including Beijing, Shenzhen and Sanya with new hotels in Changsha, Chengdu, Lijiang, Qingshui Bay, Zhuhai and Nanjing while Starwood’s Luxury Collection will expand in Dalian, Hangzhou, Nanning, Xiamen, Nanjing and Suzhou.
China is Starwood’s Second Largest and Fastest Growing Traveler Market
According to the UN World Travel Organization (UNWTO), China is now the world’s number one tourism source market in terms of spending, surpassing Germany and the United States. In 2012, China’s expenditure on travel abroad reached US$102 billion. China is now Starwood’s second largest source of travelers behind only North America and in 2012 outbound Chinese travel to its hotels grew by 20%. Already the largest feeder market to Starwood hotels in Asia, China is by far the company’s fastest growing travel market. According to van Paasschen, accelerated Chinese outbound travel is impacting business around the globe, and last year 95% of Starwood’s hotels across nearly 100 countries welcomed guests from Greater China.
Just as important as opening new hotels, Starwood is focused on cultivating loyalty among China’s new mega travelers. Since 2010, the company has doubled its base of active travelers in Starwood Preferred Guest (SPG), the company’s loyalty program. Growth in SPG’s base of travelers continues to grow at a rapid pace, and today, SPG enrolls a new member every 20 seconds in China, and elite gold and platinum members who stay 25+ nights a year are up 53% over last year. Globally, 50% of Starwood’s guests are SPG members, and in China, 55% of rooms are filled through SPG.
Starwood Opening New Resorts in China to Cater to Affluent Local Market
Chinese domestic travel also continues to rise. Starwood’s hotels in China are no longer just outposts for Western travelers, and today 50% of guests at hotels here are Chinese. More and more, Starwood and its owner partners are developing hotels in China with the domestic traveler in mind, including new resort product to meet the demands of an increasingly affluent local market with the means and desire to travel. Starwood will soon have more resorts in Hainan Islands (often referred to as China’s Hawaii,) than it does in Hawaii. Likewise the company has opened new ski resorts in China such as the Westin and Sheraton resorts in Changbaishan and also urban retreats including the Sheraton Huzhou and the nearly 4,000-room Sheraton Macao, Starwood’s largest hotel anywhere in the world.
New Hotels Driving Demand for Talent — Starwood To Fill 10,000 New Positions a Year in China
Over the next five years Starwood will more than double its number of associates in China with 10,000 new hires each year. Starwood’s long presence in China and proven career track coupled with sophisticated recruiting efforts are helping the company attract top talent. Because of its long tenure and well established teams in China, Starwood boasts a deep bench here, and Starwood’s two most senior leaders in Asia Pacific, Stephen Ho, President of Asia Pacific and Qian Jin, President of China, both joined the company in the 1980s and rose through the ranks to their current positions. Within Starwood’s hotels in China, one third of its General Managers and 79% of its hotel senior Executive Committee leaders are Chinese.
