Starwood is ramping up its Asian operations, with 20 new hotels to open in China in 2013.
Having doubled its footprint there in the last three years, Starwood has 120 hotels open and more than 100 in the pipeline, making China the company’s second largest hotel market behind only the United States, and its fastest growing.
Starwood President and CEO Frits van Paasschen, who is in China this week participating in the Fortune Global Forum in Chengdu, said the company will open one new hotel every 20 days in China and that 70% of its pipeline of new hotels under construction and in development are in second and third tier cities.
“We continue to view China as a once-in-a-lifetime opportunity for our business,” he said.
“Whether it’s growing our hotel footprint as part of the country’s massive infrastructure development, or aggressively building our loyalty program in the world’s fastest growing domestic and outbound travel market, we are focused on taking every advantage of our important first-mover position in China.”
Demand for luxury hotels throughout China continues to grow and over the next few years Starwood will double its luxury footprint there.
W Hotels, which just opened the W Guangzhou earlier this year, will open new flagships in Beijing and Shanghai as well as hotels in, Suzhou, Changsha and Chengdu.
St. Regis, Starwood’s ultra-luxury brand, will build on its well-established presence in China in markets including Beijing, Shenzhen and Sanya with new hotels in Changsha, Chengdu, Lijiang, Qingshui Bay, Zhuhai and Nanjing while Starwood’s Luxury Collection will expand in Dalian, Hangzhou, Nanning, Xiamen, Nanjing and Suzhou.
According to the UN World Travel Organization (UNWTO), China is now the world’s number one tourism source market in terms of spending, surpassing Germany and the United States. In 2012, China’s expenditure on travel abroad reached USD$102 billion.
China is now Starwood’s second largest source of travellers behind only North America and in 2012 outbound Chinese travel to its hotels grew by 20%. Already the largest feeder market to Starwood hotels in Asia, China is by far the company’s fastest growing travel market. According to van Paasschen, accelerated Chinese outbound travel is impacting business around the globe, and last year 95% of Starwood’s hotels across nearly 100 countries welcomed guests from Greater China.
Just as important as opening new hotels, Starwood is focused on cultivating loyalty among China’s new mega travellers. Since 2010, the company has doubled its base of active travelers in Starwood Preferred Guest (SPG), the company’s loyalty program. Growth in SPG’s base of travelers continues to grow at a rapid pace, and today, SPG enrolls a new member every 20 seconds in China, and elite gold and platinum members who stay 25+ nights a year are up 53% over last year. Globally, 50% of Starwood’s guests are SPG members, and in China, 55% of rooms are filled through SPG.
Chinese domestic travel also continues to rise. Starwood’s hotels in China are no longer just outposts for Western travelers, and today 50% of guests at hotels there are Chinese. More and more, Starwood and its owner partners are developing hotels in China with the domestic traveller in mind, including new resort product to meet the demands of an increasingly affluent local market with the means and desire to travel.
Over the next five years Starwood will more than double its number of associates in China with 10,000 new hires each year.
Starwood’s long presence in China and proven career track coupled with sophisticated recruiting efforts are helping the company attract top talent. Because of its long tenure and well established teams in China, Starwood boasts a deep bench here, and Starwood’s two most senior leaders in Asia Pacific, Stephen Ho, President of Asia Pacific and Qian Jin, President of China, both joined the company in the 1980s and rose through the ranks to their current positions. Within Starwood’s hotels in China, one third of its General Managers and 79% of its hotel senior Executive Committee leaders are Chinese.