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Transforming Starwood From Bricks and Beds Into Lifestyle Brands

Submitted by Kathie Gonzalez on May 23, 2012 - 8:59am
Posted in SPG

Last week, Forbes ran a Q&A with Starwood’s Executive Vice President and Chief Brand Officer, Phil McAveety, on how the company stands apart in creating dynamic and innovative brands – including St. Regis, The Luxury Collection, W, Westin, Le Méridien, and Sheraton. It’s a good read and a good overview on how our parent company is working to differentiate the brands. Check it out:

Traditionally, the hospitality industry has been a fairly generic, functional category. Most hotels are transactional commodities, lacking the emotional appeal of classic brands.

Starwood stands apart in creating dynamic and innovative brands, differentiated under a sophisticated overall corporate strategic segmentation approach.

Starwood has over 1000 properties in 100 countries with 9 brands that include the St. Regis, The Luxury Collection, W, Westin, Le Méridien, and Sheraton. The company was hit pretty badly during the recession of 2008-9, as was the travel sector in general, but has rapidly bounced back in the last two years, led by leisure travelers.

Phil McAveety is Executive Vice President and Chief Brand Officer of Starwood. He is responsible for marketing and brand performance worldwide, loyalty programs, Public Relations; Market Research; Interactive and Partnership Marketing. Prior to joining Starwood, McAveety spent nine years with Nike in several positions, including Vice President of Marketing for Nike Europe, Middle East, and Asia.

What are the main the trends that influence your business?

There are three areas that I look to that are sort of macro influencers on our business, because they reflect areas that are of interest to consumers.

One is sustainability. We have a small “green” brand called Element, which we use as a laboratory to learn how to reduce our energy footprint. We apply this learning across our portfolio.

Secondly, we pay a lot of attention to architecture and interior design. Design used to be an elite preoccupation, but 15 years ago you started seeing it democratized through consumer products, and I certainly saw that when I was with Nike.

Lastly, besides sustainability and design, technology is the other big influence on our brands.

Your background is in building great brands, like Nike. How did it influence you in creating the Starwood brands?

I believe in moving away from owning bricks to owning the hearts and minds of customers.

We have been the leaders in the industry in developing lifestyle brands, going beyond the functional, for example, service. We think that great service is price of entry for brands, but it needs to be enhanced by the experience that the customer has with the brand. We think of our brands in terms of the traveler mindset. People have different needs during different occasions, whether it’s business or personal, and we build the brand experience to fit it.

Why is design such an important part of what you do, and of how you view the Starwood brands?

Design creates the experience, the ambiance, and it helps us connect with the guests. Because it is very important to us, we developed a multi-disciplinary brand design team that includes interior designers, architects, graphic designers, and digital designers. We create a design language that can be interpreted the same way everywhere in the world. This matters, because people who travel around the world have consistent expectations of the brand, and a lot of it is consistent design, food, music, fashion.

Your Loyalty Program, Starwood Preferred Guest, has some interesting features like lifetime status for some members and 24-hour check-in. How important is the loyalty program to your marketing?

Our loyalty program is, in many ways, our 10th virtual brand. Five or six years ago, about a third of our room nights were booked through loyalty program members, and now it is half. And because we are better at collecting information, we can service our members better.

How do you extend the brand experience beyond the four walls of the hotel? Do you collaborate with other brands?

We have strategic partnerships both on site and off site. For example, we partner with Coke and Live Nation globally on site, but the W has also had a long standing partnership with New York Fashion Week, and they are developing relationships with fashion weeks around the world. The St. Regis is partnering with American Express on Jazz festivals and Polo, because it makes sense for the positioning to pair both brands. The passion point, as we call it, of Le Meridian is contemporary art and culture, and they partner with the Tate Gallery and MoMA. Le Meridian partners with contemporary art institutions all over the world, which means giving our guests access to exhibits and special events. The notion is to reinforce the core brand position through the partnership.

How did the explosion of technology change your job?

Because there’s a multitude of platforms compared to 20 years ago, marketers can no longer control the message entirely. Instead we have to engage in a conversation with the consumer, and as an organization. You have to embrace that reality. We are very proactive and track comments, and there’s great value to engaging with people because it shows you care. But technology also enables us to become better at translating the data we collect into great service. There are very few businesses that are as impacted by technology as hospitality, because it changed completely the way people are shopping.

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