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.