$500 Million to Fix Lagging Sheratons

Three years ago Starwood announced a $100 million effort to revitalize the Sheraton brand. This was mostly about marketing investment, but they made some tweaks using the Sheraton ‘Grand’ moniker and a carrot and stick approach with fees and incentives, to try to get hotel owners to invest in their properties.

They promised to improve the offerings in club lounges, improve hotel design, and bring on new properties. This was back when the chain was still trying to grow on its own even though the board had largely decided to sell.


View from the View from the Royal Orchid Sheraton

After Marriott took over they identified the bottom 50 Sheratons in the U.S.. They got half to make some investment right away. A couple dozen were deflagged. And they began conversations with the rest.

Now Marriott has announced that 25% of Sheraton owners have committed $500 million in renovations.

  • One quarter of the portfolio (as opposed to owners, since some owners have more than one property) would be about 110 hotels and would work out to ~ $4.5 million per hotel.
  • I assume this includes the 25 hotels previously announced as making capital improvements.


Sheraton Denver Tech Center

Here’s what they have in mind,

[T]ransform the lobbies into town square-style gathering areas with what Marriott calls coffee bar-bars (the coffee bar will transform into a regular bar in the evening), partially open small meeting rooms, communal work spaces with locking drawers, and sound-proof privacy booths where guests can duck in to make quick phone calls.

The guestrooms will be modernized with a focus on larger bathrooms and a desk that can be raised or lowered to function as a sitting or standing work station, even a dining room table.

Spending just a few million dollars per property isn’t going to be nearly enough for the more worn in the tooth Sheratons. Installing coffee bars that turn into cocktail bars, and encouraging more activity in public spaces (and greater food and beverage spend, while reducing the need for as much space in guest rooms) isn’t going to make a huge difference.


Sweet Sleeper Bed

This isn’t nearly as big a top line dollar amount as the $4 billion plan a decade ago that didn’t go very far. Half the investment was in new properties, not fixing existing ones. A couple of dozen hotels were deflagged.

Ultimately Marriott wants the revenue from these properties. They can poke and prod owners to spend money. But they don’t want to send too many over the edge and out of the brand. The absolute worst properties undermine customer willingness to stick with the brand and the chain, so some do have to go.

And I still like the Sheraton Sweet Sleeper bed, even more than Westin Heavenly Beds. And I still get choked up at the Belong commercials from a decade ago.

The key is to know what you’re getting – besides the bed – since the Sheraton brand doesn’t tell you much inside the United States, though internationally and especially in Asia it still generally reflects quality.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

More articles by Gary Leff »

Comments

  1. Actually, Marriott deflagged 10,000 Sheraton rooms. So I think that’s more than a couple deflaggings, Gary.

    But regardless, Marriott needs to do what IHG and Best Western did back around 2010. It was controversial. A lot of longtime licensees and franchisees lost their flag, but it was necessary. There are simply too many old, 1960s through mid-1980s suburban Sheraton, Marriott and even Renaissance buildings that, no matter how much lipstick is put on them, are bad reflections of individual brands and Marriott International writ large.

  2. And if Marriott International is trying to drive customers toward food-and-beverage purchases, which is where hotels make their money, then they need to improve their offerings. Most hotels have lousy food, but sell it at very high prices. Even the quality of most breakfast buffets is pretty weak. It’s not any better than whatever Gordon Foods or Sysco sells.

  3. It seems that the Sheraton brand and experience doesn’t appeal to Millennials. The ROS Bangkok, view from which is pictured above, is an outstanding property: great upgrades for SPG elites, fantastic lounge for food and drinks ( arguably the best anywhere in the world), great location on the river, very reasonable rates, often under 80-90 USD…but the average age of the guests seems to be 40-50+
    Millennials want to be walking distance to shops/malls/clubs etc and choose Aloft or W or others.
    The same is true of KL and Singapore.
    I noticed that the ROS is introducing an Aloft-style grab-n-go. Maybe they’re trying to appeal more to younger guests through such initiatives .
    Sheraton still has ‘quality’ tag in Asia but it isn’t translating into higher rates ( fortunately).

  4. Right – the “Belong” ad is quite touching. However, like the current Hyatt “For a World of Understanding” ad, it doesn’t address what is important to frequent business travelers. Neither ad makes me want to stay at the hotel advertised. When I was exclusively a Starwood guy I would try to make my status while avoiding Sheratons. Not easy to do. Now that they are part of Marriott, I welcome an improvement to the brand but it doesn’t sound like enough to improve the perception: tired and boring.

  5. You know what grind my gears? When hotels advertise a updated lobby, while the rooms are old and worn. I don’t care about an area I walk through.

  6. I view Sheraton somewhere between the Crowne Plaza/Doubletree/Courtyard type offering and more sophisticated offerings like Marriott and Hilton. Somewhere in the last couple of years it’s lost some of its brand appeal. The thing with millennials is when traveling for pleasure they don’t want to stay in a boring corporate hotel. A more sophisticated offering still has appeal, but middle of the road corporate offering has no Instagram appeal. It might be time to retire the brand and redistribute Sheraton properties to either Westin, Marriott or those that aren’t great to Courtyards/4 points etc.

  7. The Sheraton Centre Toronto is corporate owned and even with recent renovations, the lobby is dark with dated furnishings and 1980’s brass railings. The front desk is hidden away with no flow except overflow of people. They have an SPG check-in desk off to the side but most of the time it is closed.

    The exterior of the building is concrete which is grey and dirty. They should look into covering it with modern cladding.

    My point is… if a corporate property looks like crap then how do you expect to lead by example?

  8. The figure of speech is “long in the tooth,” meaning OLD. A google search for “worn in the tooth” nets precisely one result — your blog post. Congratulations on coining a new phrase. 😉

  9. @Iv: I doubt many buildings will add cladding after-the-fact in the wake of Grenfell Tower, where experts seem to agree cladding was the cause.

  10. Some of the worst properties I’ve stayed in are Sheratons. 90’s color schemes, lots of shiny brass, beat up furniture and bathroom fixtures that seem old and about to break. When I’m searching for a room on SPG’s site, I find I tend to skip past the brand.

  11. @FNT Delta Diamond – oh I see the phrase appears twice in the piece, there’s both “A couple of dozen hotels were deflagged.” And also “A couple were deflagged” missing the word dozen as it appeared elsewhere. I will go back and add the missing word. Thanks!

  12. I have thought for many years that Starwood missed the boat when launching Four Points. Instead of trying to launch “Four Points by Sheraton” as a new midscale brand, it would have been a great opportunity to reflag downmarket Sheratons in a way that accurately reflected the product they had on offer. No reason they couldn’t have concurrently opened new properties with that flag, but it would have gone a long way towards reasserting the Sheraton name as having premium cachet.

  13. As you said, too little too late. All the more reason to ditch the hotel chains and choose best in class hotels in every location. I very seldom see a Marriott, Sheraton, Hyatt, Hilton that rates as one of the top hotels. They rest on their laurels and get away with it because of all the business travelers who are only care about accruing nights to maintain status. I’m coming to the conclusion that the Citi Prestige 4th night free on any best in class hotel you can find is the way to go.

  14. Some of these old Sheraton properties, like some of the old Marriott properties from the 1970s and 1980s, need to be gutted. There’s nothing more annoying that a renovation that only includes new paint, new carpeting, a new TV, maybe some new furniture or a new bed but leaves the old phones, the old light switches, the old bathroom fixtures, and the old clock. Lipstick on a pig. IHG and Best Western grew pairs of balls and just kicked out all the old hotels around 2009 or 2010. What concerns me about Marriott’s Delta brand is it is reflagging some of the older Marriott properties to Delta. Delta seems to be a dumping ground, which is too bad because it’s basically an unheard of brand in the United States and could have been a great opportunity to build something from scratch.

  15. Looks like the Sheraton JFK got the cut
    What a total turd of a property cramped noisy rooms due to horrible sound proofing and sky high rates Wouldn’t even qualify for a sub par 4 points hotel
    Starwood milked the cash cow until the udders fell off
    As much as I hate Marriott I have to give them credit for cleaning house
    However their phone customer service with 1 hour hold times and a Mexican call center as well as closing elite phone lines has me running to book elsewhere

  16. Sheraton, like Le Meridien, to me evokes an image of stodgy, musty hotels that are basically glorified motels with depressing decor schemes. At least the Aloft brand has a younger and more trendy feel to it. As someone else mentioned, the chain hotels are often failing to be best in class but they want to charge a premium over non-chain hotels. Over Sheraton, I would and have picked brands like Radisson Blu, courtyard, etc. that are in a similar price range. I’m not against chain hotels even as a younger traveler, but if I am staying at one, it needs to be well-reviewed and have something up on comparable properties.

  17. The biggest problem with Sheraton is that in the US, they lost brand awareness decades ago. With that loss went discretionary travellers. SPG had such magnetism that business travellers hold their noses to earn stays, etc. Marriott should ditch the Sheraton brand just in the US. Change those hotels and remake US Sheratons into some other brand.

  18. The comment I found most interesting was the one about the desks-this from Marriott that was going out of its way to ditch every desk they could not that long ago! I agree 110% with Jack about the lobby investment-much ado about nothing in my opinion. And if Marriott wants me to spend $$ on F&B, then ditch the glorified McDonalds for room service-was in a Renaissance in April that has gone that route & it was awful. With options like Ubereats and GrubHub, I will spend my $$ on an external option before I support that again.

Leave a Reply

Your email address will not be published. Required fields are marked *