It’s a big day for Dilip Puri. Starwood Hotels and Resorts, of which he’s the Managing Director India and Regional Vice-President, South Asia, has opened yet another hotel – this one a Westin in Velachery, a suburb of Chennai. Puri is strutting around like a proud father. And, why not? The new Westin is Starwood’s 37th hotel in the country. Among the largest hotel operators of four- and five-star hotels worldwide, Starwood has a portfolio of nine brands that run the gamut from the premium St. Regis and Sheraton to Le Meridien and Aloft. In a couple of years, Starwood will have eight of its nine brands present in India. The group expects to have a 100 hotels under operation and development or management contracts by 2015. In this interview, Puri, a 27-year hotel industry veteran, talks about how the group plans its hotels for the Indian market, its aggressive loyalty programmes and the growth in the Indian market. Excerpts:

Starwood has several brands in its fold. How do you decide which brand comes up in which area?

The decision is often suggested by the promoter of the property himself. So when an owner comes to talk to us, chances are that he has already done some research on our brands and those of our competitors as well. But for us, the most important is to make sure that it is the right place, the right partner and the right product. Often, there are some trade-offs, simply because we don’t find that commonality of objectives between what the owners are looking for and what we are.

Some people tell us they want to build St. Regis (Starwood’s most premium hotel) in a Tier II town. Clearly, it’s not going to work. So, I should first look at whether the owner is looking for ROE or ROI, ROE being return on ego. Very often, owners get into building hotels as it is a status symbol to own one, maybe because they are in the real estate business. If that happens, to them big is beautiful. They may want a big, opulent hotel. Often, that opulence may not suit the chosen brand. Because, to provide the consistency of a brand you can’t have one hotel which has a 10,000 sq. ft. lobby, and another which has a 2,000 sq. ft. lobby.

Besides, we also have a policy not to allow the same brand within a particular radius of the other property. So, we have to consider all this. But it’s not that easy to convince owners. We have to strike a balance.

Do you invest in real estate yourself?

No. We invest in building brands. The brand philosophy is important to us simply because that’s all we are. We spend millions of marketing dollars in building awareness for the brand and that’s where my investment is. Not in real estate. Most of our owners are already looking for our marketing ability, our distribution, our loyalty programmes, our operating capabilities, and that’s what we really invest in. For example, our new customer contact centre in Delhi is a multi-million dollar centre we have built so that we can drive more business to our hotels.

Do you have loyalty programmes for each brand separately?

No. We have the SPG (Starwood Preferred Guest) programme which is a common thread that runs through all our brands. Through it, we sell all the brands. So far, we have always been driven by price. Now, we are beginning to see the emergence of a class of Indian traveller whose travel decisions are based on loyalty programmes.

And loyalty programmes work best when you have redemption options. One is to earn points and burn them as well. So you earn on business, and you burn on leisure. Your holiday is free. Like in the airlines business, when you travel on frequent business trips, you earn your free miles, and you spend them travelling on a holiday.

How is growth in the Indian market?

There are well established domestic brands such as The Taj and Oberois. Our own international competitors are in India now – Hyatt, Marriott. And, none of us is going to get away. We all believe in this market and the future of this market. It is a question of how you are going to distinguish yourself and get away from your competitors. Compared with the Indian brands, I think the big advantage that we are bringing in is the distribution of loyalty.

You have so many brands, but not many know they all belong to Starwood …

That distinctness of our brands works well for us. If you notice, all our competitors have one mother brand. There is Marriott, then there are its extensions such as JW Marriott and then Courtyard. The same with Hyatt. You have Park Hyatt, Grand Hyatt, Hyatt Regency. How different is Park Hyatt from Hyatt Regency? For many, they are all Hyatt. There is no such confusion for us. We have distinct brands, and we leverage that very effectively so that we can position ourselves better in different segments of the market. We see that as a very big competitive advantage.

Are you poised to grow faster in India?

In all, we have 36 hotels. Nine of them are in partnership with ITC, and the rest of them are distributed among Westin, Meridien, Sheraton, Aloft and Four Points.

Now, for Aloft and Four Points we work on both the management and the franchisee model. The Aloft in Chennai, for example, is owned and managed by a company called Auromatrix Hotels and they have licensed the brand from us. They have built five Aloft hotels with us. Now, we are building our newest Aloft in Bangalore in association with the Prestige group – and we are going to run the property. Similarly, four of our Four Points are franchised and the first to be managed by us opened last week in Ahmedabad. We will open two more Sheratons this year, one in Chandigarh and one in Greater Noida.

If you take Chennai, Starwood is the biggest with 1,400 rooms distributed between Meridien, Grand Chola (part of The Luxury Collection, a premium brand), Westin, Sheraton and Aloft.

In total, we have 25 properties under development. That gives us a total of 61 hotels. This growth happened only from 2007, because prior to that we were a pure ITC-franchise company in India. Now we are building our own Sheraton. We took the Sheraton brand back from ITC and gave them the ‘Luxury Collection’ brand. It works brilliantly for both of us because ITC gives us the distribution in India, and we have the distribution globally.

Won’t all these brands cannibalise each other?

No. It’s purely driven by what brand a guest is familiar with and wants. Sheraton’s core elements are very different from that of Westin’s. They are both five-star hotels, they both probably have the same average rate, but the kind of guests who would choose to use the Sheraton or a Westin have a different purpose of visit. You are constantly connected, you are constantly wired, everything is available at your fingertips, that’s what a Sheraton is, for the real road warrior-corporate traveller globally.

Westin is for a slightly more sophisticated level of traveller, who wants modern business conveniences, Westin’s Heavenly Bed, Super Foods, which are a part of the brand’s wellness positioning.

These are all based on research that goes into it. For example, our Meridiens globally get most of their customers from the advertising industry. It’s a brand which we are focusing on design, art and creativity that relate to people in creative industries. You will see a lot of investment bankers using Westin. It’s a matter of research, an experience. What does the customer expect in that hotel? A consulting guy could be spending 2-3 weeks on a project working with one of the clients. His needs and expectations are very different from a guy who is on a two nights’ stay.

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