Frits van Paasschen is president and CEO of Starwood Hotels & Resorts Worldwide, which operates nine hotel brands including St Regis, Westin, Le Méridien and Sheraton. Van Paasschen previously held executive positions at Coors Brewing Company, Nike and Disney Consumer Products. Since joining Starwood in 2007, he has led the group’s aggressive overseas expansion, in which nearly 80% of its planned openings are outside the US. Van Paasschen spoke with China Economic Review on a recent visit to Shanghai, where he launched the Starwood Personalized Travel program for Chinese outbound tourists.
Q: What does the Starwood Personalized Travel program entail?
A: It will be an opportunity to give our Chinese outbound guests a helping hand as they travel to markets around the world. There are about 25 million first-time Chinese outbound travelers. When they reach Buenos Aires or Paris, they not only want a hotel brand that they know from their home market, but also someone who speaks Chinese and can help them with translation, customs, looking at a menu, or other specific needs. Starwood entered China as an outpost for Western travelers traveling here; now, we’re creating an opportunity for outbound Chinese travelers to benefit from that same basic idea.
Q: What strategies did you use to design this program?
A: About 60% of our hotel guests in China are Chinese – and that doesn’t include overseas Chinese who have returned. We have quite a bit of experience with our 75 hotels open in China today and taking care of guests here. We’ve spoken with many Chinese people who have been abroad or thought about going abroad and asked them what’s important to them – whether it’s congee for breakfast, a tea kettle in their room, or someone they can call if they have a question in Chinese – all of the things to make them feel at home.
Q: Is this only for Chinese travelers?
A: For now, yes. We’re looking at starting similar programs for outbound travelers from Brazil and India, too.
Q: What has Starwood been able to learn from Chinese hospitality?
A: This is interesting because, when we first started opening hotels in China and were training people to run them, we were transferring knowledge here. Now we’re finding there are many things about China that benefit the rest of our business. For example, today we have nearly 30,000 employees working in our Chinese hotels – and in the next five years, that number could triple. This is a rate of hiring, training and creating opportunities on a scale that we’ve never seen before. We’re also learning how to adapt to societies that are more SMS-based. And because dining in hotels is popular in China, we’re trying a lot of new things and taking this food and beverage expertise elsewhere. It’s not just about introducing Chinese dishes at other properties, but how we operate a restaurant. For example, a US chef will take a chicken and see the breast – or the filet of a fish – as the best parts. A Chinese chef would say, “I want the wing of the chicken, the cheek and head of the fish.”
Q: Why did Starwood relocate its whole New York-based senior leadership team to Shanghai for one month this summer?
A: The first reason is growth. About 30% of the hotels we plan to open in the next 3-4 years are in China. So, spending one-twelfth of the year here seems like a reasonable investment for our senior leaders to better understand the market. Another reason is to develop relationships – not only within our leadership group from New York, but also with our colleagues in China. Spending a month here allows us time to meet with owners and partners. And because we’ve been able to meet with each other and have traveled to certain markets together, when we return home, we can make decisions over the phone more easily. I think it’s difficult to really understand a market until you’ve bought groceries there; until you’ve had time to live, listen to people and watch what’s going on. My goal for this month of relocation was to provide our executives with a bit of that immersion experience.
Q: How would you describe the high-end hotel market in China?
A: The Chinese market is at a very interesting stage right now. The absolute size of the travel market – whether it’s outbound travelers or people going on internal domestic trips – is as large as the US. But the hotel base is actually much smaller. We believe we’re entering a phase of enormous growth in the years to come. The competitive environment is a result of many brands recognizing that, if you want to be a global player, you have to be a major player in what will likely be the largest hotel market in the world – and that’s China.
Q: What do you like about working in hospitality?
A: As a global hotel company, we have an extraordinary vantage point to see what’s happening in the world: where development is happening, what’s happening among brands, and how people are relating to brands through technology. We get to participate in this extraordinary growth happening in many markets around the world. Another aspect I love is going to each of our hotels and seeing the spirit and enthusiasm of our employees. When I arrived at Starwood, I thought my job would involve going to hotels and being inspirational. But it’s been the opposite: Each time I visit a hotel, I leave feeling much more inspired by the pride of our employees.
