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Hotels

Starwood’s Room Growth Below Expectations, and Lifestyle Brands Don’t Help

Dennis Schaal photo
Dennis Schaal

Photo Credit: Starwood hopes to form a collaborative partnership with Design Hotels as a means of spearheading growth. Pictured is Hotel Vernet in Paris, a Design Hotels property. Design Hotels

Skift Take

Lifestyle hotel brands such as Starwood's Aloft and Element are growing substantially, but the smaller number of rooms in these properties is weighing down Starwood's growth. Starwood is looking at some creative ways and partnerships to jumpstart room growth.

Starwood's growth in hotel rooms in 2014 is below its expectations, and some of the sluggishness can be attributed to roadblocks and financial issues in China, as well as the shift in product in North America toward lifestyle hotels. Starwood, which reported its third quarter earnings yesterday, indicated that net room growth this year is around 2%, well below the 4% to 5% forecast at an investor day in 2013 in Dubai. "Part of the drop is a function of longer development lead times in a few markets, especially China," CEO Frits van Paasschen told analysts during the earnings call. "As you've just heard, our hotels are performing well in China, but as our development pipeline has shifted to large mixed-use developments in Tier 2 and Tier 3 cities. These projects are

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