Crisis has not derailed globalisation
As we draw near to the end of the first quarter of a new decade, I realise I've spent much of my time this year recapping how Starwood survived the economic challenges of 2009. Now, I am excited to put these events in the past and focus on what is to come for our company and industry in 2010 and beyond.
In the near term, I believe we have reason to be optimistic about the state of the industry and the global economy. For example, at Starwood, we saw leisure travel come back last fall. And now we are seeing the return of business travel with occupancy levels getting back to pre-crisis levels in many markets. It's clear that companies are out there going after the topline again. That's good news for Starwood, for business destinations throughout the Middle East and for the recovery overall.
We can also be optimistic because at Starwood we're seeing continued opportunity to grow our hotels, create jobs and enhance infrastructure in markets around the world. This year alone, we will open more than 80 hotels, which will add 12,000 new jobs to the global economy when the world needs them most. And that is on top of the more than 12,000 we created last year.
Now, I can't say we won't see a new set of challenges this year – or that all industries or markets can expect full recovery. I can, however, say that while 2010 may not look like the hotel industry's high point in 2007, it won't look anything like 2009 either – and that is something for which we can all be thankful.
Looking beyond this year, long-term secular trends represent an outsized opportunity for global hotel brands and globally minded markets. When I look at these trends, I am bullish about our industry's prospects in the Mideast and around the world.
Fundamentally, we have to remind ourselves that the financial crisis did not derail the unstoppable forces of globalisation, capital flows, emerging middle class and the demand for infrastructure. Secular changes will create more business and leisure travel to and from less developed markets as three billion people are seeing a rise from poverty to prosperity over the course of a generation.
Nowhere is that better exemplified than in China and India. In fact, by 2015, 400 million Chinese and Indians will have significant incomes to travel abroad. And by 2020, the Chinese will generate more than 100 million outbound trips a year.
When travellers from these rapidly emerging markets begin to travel internationally, they will look for destinations with solid infrastructure, ample airlift and best-in-class hotels. This has profound implications for both the Middle East and Starwood as we both work to attract these travellers by building the attractions and hotels they seek.
Fortunately, at Starwood we are not starting from the ground up as we look to grow in the Middle East. We first entered the market in 1966, and today, we are an established leader here with 50 hotels around the region from Bahrain to Yemen. Looking ahead, we see great opportunity and are committed to more growth with development planned in key cities such as Abu Dhabi, Doha and Dubai. Over the next five years, we plan to open nearly 20 hotels in the Mideast, further solidifying our position as the market leader and industry innovator. While the Sheraton and Le Méridien flags are already well known here, we are now delighted to debut exciting new hotel brands to the Middle East as we recently did with W Hotels in Doha and the launch of Aloft Hotels in Abu Dhabi.
We are also seeing meaningful expansion of our luxury portfolio with new St Regis hotels and resorts in Doha, Abu Dhabi, Bahrain and Dubai, as well as new hotels and resorts under The Luxury Collection flag, including the recent re-branding of the iconic Grosvenor House in Dubai, marking the debut of the brand in the UAE. And we look to continue to grow our Four Points by Sheraton brand with four new hotels in development.
For Starwood, these new hotels mean increased access to the growing number of travellers who seek the one-of-a-kind experiences only the Middle East can offer. And for the Middle East, these new properties will bring additional infrastructure and career opportunities, while further enhancing the region's reputation as one of the world's premiere destinations.
- The writer is President and CEO of Starwood Hotels & Resorts. The views expressed are his own
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