[photopress:hotel_Miguel_Ko.jpg,full,alignright]Starwood plans to set up at least 30 hotels a year in China over the next three years to sidestep a looming recession in its main U.S. market.
Starwood has 41 hotels in China, the world’s fastest growing major economy, and its Asian business has been bolstered by a regional travel boom. However, Asia Pacific President Miguel Ko said, ‘We will, in the medium and long term, be quite immune from a downturn in North America. In the short term, about 25% of our business is still from outside of Asia — 12% from North America — but that percentage is decreasing.
‘In the old days, the yield for Asian business was lower, but that has now changed. The Asian business is now yielding as attractively as the North American and Western European businesses in average room rate, consumption of food and beverage, and use of the facilities for the hotel.’
Starwood owns, operates, or has franchised 896 hotels across the world. It has 136 hotels in Asia.
The firm has sealed deals for two joint ventures to set up ‘Aloft’ hotels in China, each costing between $10 million and $15 million.
Starwood is reducing its investments in real estate and increasingly focusing on franchise agreements and management contracts. According to its website in 2006 it sold 43 hotels for approximately $4.5 billion.
In China, the firm’s Sheraton brand is the most popular although the brand faces difficulties in the United States through uneven standards.
Rising wages, higher costs of living and a growing need for trained talent putting pressure on firm’s development plans.
Starwood plans to add 15,000 staff in Asia over the next three years — 98% to be hired locally — to add to the 36,000 staff already in the region.
Miguel Ko said, ‘I think the day when you needed a Caucasian man standing in the lobby as general manager to signal that it is an international style hotel is over.’
Source: The Guardian