Q & A

As development activity heats up in the select-service hotel sector, Starwood Hotels & Resorts Worldwide is stepping up plans to roll out its new affordable brand — aloft. The select-service brand was created by the same team that developed Starwood's stylish W brand. Stylish and hip, aloft will stand apart from its competitors by infusing an urban, loft-like design into the mainly franchised properties.

Capitalizing on the growth of affordable select-service hotels (also referred to as limited-service hotels), which typically do not offer restaurants or conference facilities, Starwood hopes “aloft” will deliver a lifestyle experience, which has historically been absent in this segment. NREI recently talked with Ted Darnall, president of Starwood's real estate group, about initial development activity and how aloft differs from other select-service brands, including Marriott's Courtyard, Hilton's Hilton Garden Inn, and even its own Four Points.

NREI: Starwood already has the Four Points select-service brand. So, why did the company decide to introduce yet another brand into this segment?

Darnall: It's important to have multiple brands in the same space (such as Starwood's upper upscale Westin and Sheraton). As we've worked to define and reposition our brands, expanding into the upscale, select-service market was a natural evolution for us. We also found that developers want to build a new, fresh product in existing markets.

We looked at buying into the select-service space by acquiring another brand, but then we concluded that we'd be investing in a me-too product. That's not what we're about. We built our company around innovation and style, and we wanted to offer developers a clear alternative.

NREI: How exactly is aloft different?

Darnall: The brand will revamp the stagnant select-service segment by infusing energy and a lifestyle element into hotels that will cost about the same amount to develop ($90,000 per key excluding land costs) as competing flags, such as Hilton Garden Inn. Featuring 130 to 150 guest rooms, aloft hotels will also raise the bar in the select-service category by featuring guest rooms with 9-foot ceilings and oversized windows, 100% wireless Internet access, and a comfortable common area. Rather than a lobby, this will be a social area with inviting chairs and couches, like you'd find at Starbucks. We think we'll be able to deliver something to the market that adds a social environment back into a functional setting.

The hotels will not have restaurants but instead will offer Re:Fuel, a 24-hour-a-day place to go for stocking up on food, snacks and drinks. Some properties will also feature Fresh air, an open-air outside area to socialize and gather; and Splash, an indoor or outdoor pool.

NREI: What type of response have you received from developers?

Darnall: We have received overwhelming interest from the hotel development community since we announced the brand last June. We consider this to be a big opportunity and hope to have 500 properties worldwide by 2012. Twenty-six development and ownership groups have executed letters of interest, each expressing their interest to develop at least 10 properties. Starwood has also announced five company-owned sites that are in various stages of development. These first properties will be located in Tucson, Ariz.; Lexington, Mass.; Cherry Creek, Colo.; and near the San Francisco and Philadelphia airports. The first hotels should break ground in early 2006 and open in early 2007.

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