Starwood plans to double hotel portfolio in region

Starwood plans to open the Westin Hotel Golf & Spa in the capital in 2009 (PATRICK CASTILLO)


Starwood Hotels & Resorts could double its current operating portfolio of 50 hotels in the Middle East in the next five years as it continues to bolster its presence in the region, a top company official said yesterday.

The company, which operates 50 hotels with another 20 under development, is currently negotiating 60 leads and projects in the region that have yet to be signed, its Middle East vice- president and regional director Guido De Wilde said.

"To convert half of these to management contracts is 30, and that already [takes us to] 100 hotels. We could probably double our current operating portfolio over the next five years, that's not unrealistic," said De Wilde.

The global hotel giant expects to add 80-100 hotels around the world to its portfolio this year, up more than 50 per cent from the number it opened in 2007.

"We operate at very high margins in the Middle East and this has to do with the fact that we're achieving high rates, high income levels, and our operating costs are well kept within a certain record," said De Wilde.

"The margins achieved in the Middle East are among the highest in the industry in the world. We're operating a very solid economical model in the Middle East and we're trying to sustain that," he added.

De Wilde also said Starwood currently has no plans to operate a Middle East brand or to own properties in the region, but added it could incorporate a franchise business.

"What can be introduced – and that's the other side of owning – is franchising. We have no franchise contract as we speak but that could over time very well change. Once we have confidence that there is a management structure in place that could merit our brand then we could eventually consider it," he said.

The company is also looking to diversify its portfolio with more economy level brands and four-star products. Its new lifestyle brand, aloft, currently has a hotel under construction in Abu Dhabi, and is expected to open in 2010.

"There is huge potential for the four-star segment in the region, as long as it's developed in the right location, which isn't necessarily in the centre of a city," De Wilde said.

He added Starwood currently has no plans to enter the vacation timeshare market in the UAE, but said the possibility exists as the company is positive about the opportunities specifically in Dubai. The move would make the Middle East the company's first timeshare venture outside of North and Latin America.

"We're thoroughly analysing the opportunities. We're sincerely interested because of the sincerity of the developers in the market. Over time it is possible there could be timeshare in Dubai by Starwood."


Plan to solidify UAE presence

Starwood is looking to solidify its presence in the UAE and aims to have all nine of its brands represented in the country. "This is our main prime market in the Middle East [and we want to] further grow our brand footprint," said regional director Guido De Wilde.

The company is currently introducing more brands to Abu Dhabi with a five-star St Regis hotel on Abu Dhabi's Saadiyat Island – set to open in 2009 – and the $354m Westin Hotel Golf & Spa opening in the capital in 2009.

Two W hotels are also planned for Dubai – on Palm Jumeirah and in Dubai Festival City – and expected to open in 2010.