BETHESDA, MD—When Marriott International Inc. acquired Starwood Hotels & Resorts Worldwide Inc., the company maintained a commitment to each of its 30 brands, assured it could drive distinctions even among those that sat in similar segments. One of the biggest question marks of the acquisition was Sheraton Hotels & Resorts—a brand with more than 80 years of history that, in recent years under the Starwood umbrella, had undergone a series of refreshes and revitalizations in fits and starts with limited success. Now, at the annual NYU International Hospitality Industry Investment Conference, Marriott plans to roll out its strategy for the storied brand, the next step in its plan to show owners how serious it is about Sheraton—and we’ve got the first peek.
“Sheraton’s gone through quite a few transformations over the years. We think we’ve got a unique opportunity to to do it right as part of the new company,” said Julius W. Robinson, SVP & global brand leader, Marriott, Sheraton & Delta Hotels. “We see June as an opportunity to bring some of those elements to life for our owners and investors.”
One key aspect of Sheraton’s repositioning is to avoid mistakes made in the past. Robinson noted that when Starwood was first acquired, Marriott’s impression of Sheraton was one of intrigue. “We were curious to understand why there had been so many versions of transformation stories for the brand,” he said. “What we found is the transformation efforts in the past have been a bit disjointed. One year, it might be a design strategy; one year a brand strategy; one year an operation strategy; and those never had an opportunity to really take hold. Why we think this is different is we’re actually looking at the brand strategy, the guest experience, and the design all at the same time. As we come up with the new design idea, the immediate next step is how does that work from a guest experience perspective. That energy allows us to be a bit game changing in how people will view the brand in the future. We think we’ve got something here that’ll restore Sheraton to the level people had expected it to be for the last 80 years.”
However, he’s also aware that for owners who have been with the brand for years, there’s a fair amount of uncertainty. “Owners were very skeptical because they had heard this story on Sheraton before; they had people like myself stand in front of them and tell them this time it was going to be different,” Robinson said. “As much as we’ve spent the last year and a half doing our research and our ideation, we’ve spent equally the same amount of time talking to our owners and understanding what their immediate concerns were.”
In addition to a more comprehensive strategy, Robinson pointed out there’s another major difference for this refresh—Marriott itself. “We’ve done this before,” he said. “Many people remember the transformation of the Fairfield Inn & Suites brand a decade ago. That brand was left for dead; today, it’s one of the most powerful and fastest-growing brands we have. There was some work that was done with our Courtyard brand; Courtyard continues to be an industry juggernaut. And even more recently, we’re in year four of a five-to-six year transformation of the Marriott brand in terms of its product, and the returns on investment our owners are seeing for hotels that have gone through our product transformation efforts have been huge. The good news is when you can go to an owner and share three case studies of how you’ve done this before and then talk about the fact that we’re looking at design, brand and guest experience together, and why we think that’s going to be different, we’ve been able to change some hearts and minds—but we still have to prove to them that we’re serious. NYU is a big opportunity to showcase tangibly some of the things we’re doing, and after NYU you’ll see us looking at certain hotels as early adopters, bringing our owners through those properties to give them a chance to see it live with guests.”
In the works for well over a year, Sheraton’s repositioning revolves around the activation of public areas, focusing on the notion of community building—a core value for the brand. “Our design perspective on the public area is to take what people are familiar with from the modern-day town square, and bring it to life in a whole new and differentiated way for a more informed, seasoned and interested traveler,” said Robinson.
Examples of the new public areas will be on display at NYU; Robinson noted key elements that are important to Sheraton include how guests engage spaces; how they flow from one activity to another; how the food and beverage concepts will represent this notion of community throughout the spaces; and how to leverage technology.
“Technology has now become table stakes in our industry,” he said. “What we’re interested in is the notion of being able to provide guests with on-demand opportunities, like on-demand food and beverage opportunities, so I can order a small plate from my mobile device as I’m working.
“What’s really interesting for Sheraton is thinking about community as the rallying cry for the brand—not just our guests, but also our extensive amount of rewards members who actually are in those communities, allowing technology to be the conduit to bring people together,” Robinson continued. “It will allow our guests to have the majority of the public area, enjoying that as a working and social space, but it will also allow our folks who are in the hotel on a day-to-day basis to invite rewards members in from the local community and create something we think is going to be special for Sheraton. The lobby and public areas are really where you’ll see the heart and soul of the brand come through in a very 21st-century way.”
Sheraton held a design competition, pulling in firms from around the world, asking them to come up with visual and functional executions for what the hotel lobby could look like. “It was fascinating what came back. As much as there was varying levels of ingenuity and ideation in the process, in some respects, there was this core element of how people work together in the future that really permeated every single one,” Robinson said. “That put the stamp on it for us that we were on to something special, and that’s what’s going to allow us to really differentiate this transformation from what you may have seen in the past from Sheraton.”
While public areas will be a focus for Sheraton, the team has also revitalized guestrooms. “The guestroom is a great example of how we looked at the Sheraton economic model,” Robinson said.
With almost 500 properties in 75 countries, it’s Marriott’s most global brand—meaning how people think about Sheraton varies greatly.
“We’ve got two iterations of our guestroom. The first iteration is primarily for our North American public. We opened up the space and focused on comfort; whether they’re working at a table that allows them the flexibility of standing and sitting, or working from a couch or chair in the room, comfort and the ability to get things done has been our primary focus,” Robinson said. “For the North American version of our room, we’ve reduced the cost by about 30% from what it was two years ago before the companies came together. From an owner perspective, we have a more efficient room that actually serves a purpose that guests have told us they’re looking for.”
Rooms elsewhere across the globe will follow a different model. “In many places like Asia, the Middle East and even parts of Europe, Sheraton is perceived as more of a luxury brand; we’ve developed an elevated room that still has similar functionality, but style and finishes are much more elevated and still represents that luxury, premium aspect of what a Sheraton room is,” he said. “But the notion of comfort permeates both of those guestrooms.”
According to Robinson, the refresh was a group effort. “Leadership starts at the top. Our CEO was one of the first people to really say Sheraton has a massive role in our company,” he said, noting the brand talked to guests, owners and associates to “really make sure we pull out the essence of what’s important to this brand and never stray away from it. The one thing we want to stay core to is the heritage and culture of the brand; everything we do has been rooted in that.”
The transformation will take time. “So much of the work has to do with the physical plant—changing the guestrooms, changing the bathrooms, changing the lobbies—so we see this as a multi-year effort,” Robinson said. However, the brand has already started implementing some changes as it relates to guest experience. “We also are very encouraged that now that Starwood is part of Marriott, plugging into all of our systems, plugging into the new rewards program—that has commercial upside for the brand. We expect to see those sorts of things in the short term, but longer term, the next two to three years is when you’ll start to see the transformation of the products come to life.”
Of course, not every hotel will make the cut. “When I look at the other transformations we’ve done on the other three brands I mentioned, there was a fair amount of exits as part of that strategy,” Robinson acknowledged. “There are some assets that, over time, whether it’s the market or the asset, have probably lived their useful life as a Sheraton. And so we look for other opportunities. We’ve exited hotels in Sheraton since we acquired the brand; we will continue to exit hotels. Some will leave the brand family entirely and others might find their way into one of our other 29 brands. We think with partnership and cooperation from our owner community that we’ll get there on most of the hotels, but Marriott’s proven to be a bit more aggressive in exiting hotels than maybe Starwood had been in the past.”
With close to 100 hotels in the pipeline, mostly in Asia-Pacific, Robinson said, “The pipeline for Sheraton is actually good. I’d like to increase the pipeline in North America and Europe, but the brand today, even through all of its challenges, still has a pretty robust pipeline. So there’s a very mixed signal for Sheraton depending on where you are in the world—but overall, the investment confidence is still there.” He noted that the development teams have been given a special incentive to go out and find opportunities for Sheraton specifically.
“We think the combination of renovations, exits and new-builds is the right formula for the brand because it signals to the owner community that we’re serious,” he said. “And the new hotels signal to guests that the brand is not just in a stability mode—it’s always growing, always evolving.”
Stressing how serious Marriott is about Sheraton, Robinson said, “It’s one of the largest revenue generators and third in terms of number of rooms, so it’s very important that we see Sheraton as a long-term player to the financial success of our business overall.”
Once the transformation is complete, Robinson expanded on how Marriott would like Sheraton to be perceived by owners and guests alike. “If our guests today in some parts of the world think it’s tired, the future vision would be that Sheraton is modern,” the executive said, noting that Sheraton needs to be timeless. “While we need to have a more modern aesthetic, I think people need to see the brand design as a timeless design, because we need to represent a broad variety of hotels across a really strong culture for the brand. I would want people to say words like ‘change,’ ‘timeless,’ ‘cool’ and ‘technology forward,’ because those are also big elements we’re investing money into, and I’d also want them to see the brand as welcoming. Sheraton’s been one of the first brands in many pioneering cities around the world, so this notion of welcoming hospitality has been part of the brand for 80 years. Whatever we do, we can’t abandon that, because that ties to the core and heart of how our guests view the brand.” HB