Report

Starwood Hotels and Resorts Worldwide, Inc.

Student ID: c7094001Module Title: Hospitality InternationalisationM.Sc in International Hospitality Management

Contents1) Abstract.............................................................................................12) Introduction......................................................................................13) The Dimensions of the firm for their internationalisation.............1-7Products/Services, Brands, Markets, Revenue, Staff4) The Internationalisation History of the firm....................................85) Major Issues regarding the Firms internationalisation.....................96) Conclusion.........................................................................................97) Bibliography......................................................................................

AbstractIt refers to the brief information about the hotel company known as Starwood Hotels and Resorts. The journey of the company from its early ages and till now, the business expansions and various joint ventures and other acquisitions by the company in the global market. It explains the different international dimensions of the firm which highlights their access into internationalisation.

IntroductionStarwood Hotels & Resorts Worldwide, Inc. is one of the leading hotel and leisure companies in the world. The company primarily operates in the US. [Datamonitor , 2010] Starwood hotels are mainly established in the luxury and upscale category of hotels in the hotel industry. The Starwood Group of hotels have a worldwide network around the global market of owned, leased and different joint ventured hotels and resorts. Being established in the category of luxury and upscale hotels, it operates through two main segments i.e. hotels & vacation ownership and residential.

The Dimensions of the Firm for their InternationalisationThe dimensions through which the firm entered the phase of internationalisation are discussed below:1) Products/services: The major products of the firm is the various hotels, accommodation facilities and other such type of quality service which the hotel renders to its guests 24x7 and 365 days a year. The services of the hotel, emphasizes on quality and consistency of room, restaurant and meeting facilities and services, attractiveness of locations & price. The company offers vacation ownership and residential services through Starwood Vacation Ownership and its hotel brands.

2) Brand: The major brands through which the hotel company established its international market reach in the past and maintains it today also are St.Regis, The Luxury Collection, W hotels, Westin, Le Mridien, Sheraton, Four Points, Aloft, Element etc.

a) St.Regis: It is the finest luxury hotel and resorts with full service facilities available all times. They have their in-house guests which are all the high-end leisure and business class travellers from around the world. These hotels are situated in the most breathe-taking locations ever imagined and state-of-the-art design structure for each hotel.

b) The Luxury Collection: It is all together a different segment of hotels which deals with all their high-profile guests providing service to all at a very superior level. This group of hotels includes selective palaces and retreats with a touch of modern technology.

c) W hotels: A W hotel is a very distinctive brand all together from others. The letter W stands for Wherever, Whatever & Whenever as per their brand standards. For example, if you need a Bentley car to be sent for your airport pickup and a R.R Phantom car for your airport drop service, it would be done without any questions asked.

d) Westin: It is a brand related to the various lifestyles of the people and varies accordingly. It is a world renowned hotel for its features such as Heavenly Bed and Heavenly Bath. It also offers a menu known as Superfoods menu which includes food items containing high nutrient and antioxidant content.

e) Le Mridien: This is a European-inspired brand with a French accent. [Starwoodhotels, 2010]. It is famous for their unmatched quality of food and a very classic way of service they provide to the guests.

f) Sheraton: It is the largest brand among all other brands under Starwoods. The Sheraton brand is so flourished that it is located in every city around the globe. The service rendered to the guest defines the brand standards.

g) Four Points: The basic service image they carry is Comfortable, Honest & Uncomplicated. The service atmosphere in the Four Points is casual and comfortable and starts off with experiencing Hi as a welcome greeting.

h) Aloft: The hotels under this brand name are moreover like the trendy & refreshing place on the road side which comes under the motel segment. It is a new brand and was launched in 2005 with the first hotel in 2008. [starwoodhotels, 2010]

i) Element: The brand Element resemble as a hotel, constructed keeping in mind the natural beauty of the environment. It is so designed that it gives a relaxing feel to the guests and experience the bliss of Mother Nature.

3) Markets: The Starwood hotels & resorts company has a total of 992 properties across the globe and the major markets and its density of their hotels in it is as follows:

Number of PropertiesRooms

North America533175,000

Europe, Africa and the Middle East24460,000

Asia Pacific15551,200

Latin America6012,300

Total992298,500

Figure: 1.1 shows the market reach of the company in different countries.

Figure: 1.2 shows the market reach of the company by different types of properties under their name.(a)Includes wholly owned, majority owned & leased hotels.Number of PropertiesRooms

Managed and unconsolidated joint venture hotels440153,800

Franchised hotels476116,300

Owned hotels(a)6321,500

Vacation ownership resorts and residential properties136,900

Total properties992298,500

[Starwoodhotels, 2010]4) Revenues: Starwood generates revenues through two business divisions: hotels (85.7% of the total revenues during fiscal year 2009) & vacation ownership & residential (15.5%) [Datamonitor, 2010]

Revenues by Division: In 2009, the hotel division recorded revenue of $4,038 million, a decrease of 16.9% as of 2008.The vacation ownership & residential division recorded revenue of $674 million in 2009, a decrease of 24.6% as of 2008.

Revenues by Geography:

The companys largest geographical market i.e. United States of America accounted revenue of $3,401 million in 2009, a decrease of 16.2% as of 2008.Italy accounted revenue of $175 million in 2009, a decrease of 52.7% as of 2008.All other international locations accounted revenue of $1,136 million in 2009, a decrease of 14.3% as of 2008. [Datamonitor, 2010]

5) Staff: By December 31, 2009, approximately 145,000 people were employed at our corporate offices, owned and managed hotels and vacation ownership resorts, of which approximately 34% were employed in the United States, and also approximately 39% of the U.S.-based employees were covered by various collective bargaining agreements providing, generally, for basic pay rates, working hours, other conditions of employment and orderly settlement of labour disputes. [starwoodhotels, 2010]

The Internationalisation History of the firm (When, Why & How)The company Starwood hotels & resorts worldwide, Inc. Was formed in 1969 and was built-in 1980. In 1998, Starwood launched W hotels, a new brand of business hotels, in the U.S. [Datamonitor, 2010]. In the year 1999, the company sold The International Golf Club in Bolton, Massachusetts for about $25 million to Arklow of Massachusetts. In 2004, the company acquired Bliss Spa from LVMH Moet Hennessy Louis Vuitton, a luxury goods group. As the part of it, starwood also announced to launch Bliss spas in its W hotels. In the year 2005, in Taiwan Starwood and Ilan Sky Line Entertainment entered a franchise agreement to operate the first international resort, the Sheraton Yilan Resort. In 2006, Starwood sold a 460 room Westin Long Beach in California for $88.4 million to a joint venture between Noble Investment Group and AEW Capital Management. In the year 2007, the launched the re-designed website, LeMeridien.com. Starwood opened its first Westin property in India, The Westin Sohna Resort in 2008. In February 2009, acquired five new projects in China including, St. Regis resort in Sanya and four other properties. In July 2009, the company announced the opening of Four Points by Sheraton San Antonio Northwest which was the company 450TH hotel in United States. In September 2009, the company made its debut of The Luxury Collection brand in Russia. In November 2009, Aloft entered the Middle-East with the opening of Aloft Abu Dhabi. In January 2010, Starwood sold the Bliss spa to Steiner Leisure Limited for $100 million. [Datamonitor, 2010]In the year 2000, the company sold Desert Inn Hotel and Casino to Stephen A Wynn for approximately $270 million. The company also acquired the minority stub of CIGA for approximately $300 million. In 2008, the company signed a binding agreement to sell assets in Venice Lido and Asolo Italy to EST Capital for E156 million (approximately $229.5 million). Starwood continued its global expansion with the opening of the St. Regis in Mexico City and W Santiago and The Residences at W Santiago in August 2009. In March 2010, Starwood was named as The 2010 Diversity Inc Top 50 companies for its use of measurable diversity best practices and in the same month the company opened its 1000TH hotel Sheraton Qiandao Lake Resort in China. [Datamonitor, 2010]Major Issues Regarding The Firms InternationalisationThe company since its establishment in the year 1969 has being into various activities into the expansion of the company and also launching new brands. The various other business related expansions such as joint ventures, agreements, purchasing properties in different countries etc. The company opened a golf-oriented vacation ownership resort, the PGA Vacation Resort in Port St Lucie, Florida in 2000. In the same year, the company sold Desert Inn Hotel and Casino to Stephen A Wynn for approximately $270 million. In the year 2004, the company and Grande Asset Development signed an agreement for Starwood to manage a new Four Points by Sheraton Patong to be built in Phuket, Thailand. Starwoods also completed an agreement with Intrawest to operate Intrawests new 222-suite luxury condominium-hotel under the brand name Westin in Ontario, Canada. Starwood and Abu Dhabi National Exhibitions Company (ADNEC) launched a new Element hotel in Abu Dhabi, the first of its kind in the Europe, Africa and Middle East. The company also announced the opening of six new Westin hotels: The Westin Hyderabad Mindspace, The Westin Mumbai Garden City, The Westin Pune, The Westin Tianjin, The Westin Washington Dulles Airport and The Westin Lake Mary. The Four Points by Sheraton Punta Gorda Harborside earned place in the Florida Green Lodging Program, a state-wide initiative recognizing hotels that conserve and protect Floridas natural resources in May 2010. [Datamonitor, 2010]

ConclusionBy going through the whole report of the Starwood hotels and resorts worldwide, inc. The major thing which it focuses on is the various activities of the company in context to the expansion of the company. The company has worked on their brand equity by flourishing their brand in each and every country and city with all their brands all over the globe. They have a major market hold in every market segment with all the categories of hotel. The company is also been going through a down-fall in terms of their revenue from there major revenue markets. The company has also achieved major goals such as opening up their 1000TH hotel in March, 2010. The major markets of the company are United States of America, Italy and Other international locations etc.BibliographyIntroduction of the hotel - (Available from: < www.datamonitor.com>) [Accessed on 1st November 2010]Le Mridien: This is a European-inspired brand with a French accent. (http://www.starwoodhotels.com/corporate/company_info.html) [Accessed on 7th November, 2010]It is a new brand and was launched in 2005 with the first hotel in 2008. (http://www.starwoodhotels.com/corporate/company_info.html) [Accessed on 7th November, 2010]Markets: The tables of number of properties in different countries and hotels managed or franchised etc. (http://www.starwoodhotels.com/corporate/company_info.html) [Accessed on 7th November, 2010]Revenue Section: Starwood generates revenues through two business divisions: hotels (85.7% of the total revenues during fiscal year 2009) & vacation ownership & residential (15.5%) (Available from: < www.datamonitor.com>) [Accessed on 1st November 2010]Staff Section: (http://www.starwoodhotels.com/corporate/company_info.html) [Accessed on 7th November, 2010]The company Starwood hotels & resorts worldwide, Inc. Was formed in 1969 and was built-in 1980. In 1998, Starwood launched W hotels, a new brand of business hotels, in the U.S. (www.datamonitor.com) [Accessed on 1st November, 2010].Major issues regarding firms internationalisation: (www.datamonitor.com) [Accessed on 1st November, 2010]

S.W.O.T AnalysisThe S.W.O.T analysis of the company is as follows: Strengths: The company has a strong hold on the international market and has established hotels in each segment of the market. The company is well-known for their use of materials through which they encourage minimum wastage of resources. The hotel has a better loyalty program which is named as SPG (Starwood Preferred Guest).Weakness: The company focuses more on the upper scale and high-end hotel segments wherein they do not have a major hold on the mid-range segment market and also the hotels which can target these markets for excessive revenue generation. The companys revenue is on a down-fall which is a disadvantage for the company.Opportunities: The companys revenue generation by the selling of rooms to the guests and through which the revenue per room is in a improving state and can be increased by introducing some new techniques. As a result, there is also a growing scope in the lodging industry.Threats: The companys profit levels are uneven due to some political issues in the markets and so it is declining day by day. The companys division of Vacation Ownership Interest is also declining due to improper managerial aspects and policies.