SH Hotels & Resorts, led by chairman Barry Sternlicht and CEO Raul Leal, will be rebranded as Starwood Hotels this month, marking a notable return of the storied hospitality brand name. The company, which is known for its 1 Hotels, Baccarat Hotels and Treehouse Hotels brands, is also in growth mode, recently announcing plans to debut its first U.S. Treehouse, the Treehouse Hotel Silicon Valley, in March. Hotels editor Christina Jelski sat down with Leal during last month's Americas Lodging Investment Summit to discuss the company's growth strategy and evolving consumer preferences in the luxury space.
Raul Leal
Q: What prompted the return of the Starwood name?
A: Barry created that brand, and it's a legacy brand beloved by so many people; I still get calls about Starwood Preferred Guest stuff even though we have nothing to do with it. But we just thought it was the right time, given the growth we have coming up over the next few years. The way it worked is we couldn't use it for a while, but that term expired, and Barry always owned the name. We're going to bring a great version of Starwood this time, thinking about how travel has changed today and who our consumers are among the three brands we have now.
Q: Can you outline what's coming up in the pipeline?
A: This year, we have some great international openings happening. We're opening 1 Hotel Tokyo, the long-awaited 1 Hotel Melbourne in the summer, 1 Hotel Copenhagen and 1 Hotel Seattle as well as two Treehouse hotels -- Manchester, England, and Silicon Valley -- in a few weeks. We have a Baccarat opening in the Maldives in a few years, a resort in Crete and a 1 Hotel coming to Paris. We're also looking at possibly another property in New York.
Q: How are you differentiating your brands in an increasingly crowded luxury lifestyle space?
A: On the lifestyle side, you have to be careful because there are lifestyle hotels that are lifestyle, and then there are pretenders. A lot of people think that if you make the design cool and then you slap a cool name on it, that's it. But these things have to be curated in a certain way. Everything we do has to be curated, from the sense of style inside the hotels to the music and entertainment. Even little things like having the right speakers to convey the proper sound of the music -- that's what gives the environment soul. At the heart of it, successful lifestyle hotels and boutique hotels have to have a real culture.
Q: How are luxury consumer preferences evolving, particularly at the high end with Baccarat?
A: The luxury consumer is changing. You have people who are traditional luxury loyalists, and then you have a whole new generation of money looking for something different. What we're seeing is that consumers want spaces to be activated. They want choices: If they want to sit in the corner and read a book quietly, they can do that, but there could also be something going on in the lounge that's a little livelier. And the luxury consumer has no problems paying if you're delivering, but you have to execute at a very high level to justify those price points. You can't rest on your laurels.
Q: In Los Angeles, you've got the 1 Hotel West Hollywood. How do you view the L.A. market's recovery following recent wildfires?
A: I think we'll come back quickly, probably within about 60 days. Luckily, there was no major damage to hotels or convention centers. A lot of the cancellations are already rebooking with us for the first quarter. The next 45 days will still be tough, with everyone running around 40% occupancy at the moment, but I'm confident we'll bounce back strongly in the second half of the year.