* Starwood sees 10 new Luxury Collection hotels in 3 years
* By 2012, Marriott sees 25 Autograph hotels
* Independent reward program "Stash" has 146 members
By Helen Chernikoff
NEW YORK, May 3 For hotelier Sant Chatwal, the
decision to align one of his boutique hotels with lodgings
giant Starwood Hotels & Resorts HOT.N was not an easy one.
The hotel in question, the luxury Chatwal New York, is an
Art Deco theater district landmark with suede-covered walls and
heated terraces. But would becoming a link in a chain dilute
the Chatwal's carefully crafted personality?
In the end, Chatwal decided his hotel's quirky qualities
were safe and would benefit from access to Starwood's
reservations platform and marketing prowess. The Chatwal became
the first New York City property in Starwood's Luxury
Collection last week.
"There are very few brands on the planet that allow you to
retain your own identity," Chatwal's spokesman, Brendan
McNamara, said of Luxury Collection, which has assembled more
than 75 independently owned properties under one label.
Yet since the 2007-2009 recession, such brands have
proliferated, and independent hotels are more open to joining a
larger entity in order to gain access to more potential
"Independents got hit harder," said Jan Freitag, a vice
president of Smith Travel Research, whose findings show that of
over 21,000 non-branded hotels in the United States, only about
400 could fit the image Luxury Collection or Autograph are
trying to project. "A larger program can buffer you from a
downturn, or a sluggish recovery."
ADOPT AN INDEPENDENT
Starwood, which plans to add 10 properties to the Luxury
Collection by mid-2014, saw an increase in interest from
potential members during the downturn, spokeswoman Gigi Ganatra
Marriott International MAR.N started a similar brand,
called Autograph, in 2010, while Choice Hotels International
Inc (CHH.N) launched Ascend, in 2008.
"When everything slows, you can see the penetration of the
larger brands," McNamara said.
As a Luxury Collection member, the Chatwal will enjoy more
aesthetic freedom than franchisees of, say, St. Regis, a
Starwood luxury brand whose look and service style is
consistent across properties.
But the Luxury Collection and similar brands do charge fees
and require compliance with specific standards, which may deter
The Hotel Teatro in Denver, Colorado, opted not to join
Autograph because Teatro felt the mandated revisions of its
marketing materials would undermine its credibility as an
independent. It also was not willing to pay $300,000 in fees in
the first year alone, said spokeswoman Kelly Cox.
Those fees are part of why Starwood and Marriott are in the
independent business, said Robert Mandelbaum, a director at
PKF, the hospitality consultancy.
Starwood and its peers try to avoid the risk of owning real
estate and instead make money by franchising brands and
managing properties. They must take care not to cannibalize a
market with their own competing products, and adopting an
independent solves that problem.
The big chains also appreciate a little indie cred,
Mandelbaum said. Boutique hotels cast a halo of hipness back on
the parent company.
THE STRIP JOINS UP
Autograph's 15 hotels generate nominal fee revenue compared
with Marriott's other properties, said spokeswoman Catherine
According to STR, Marriott is the third-largest hotel
company in the world by room count. About 3,400 hotels bear its
"The numbers are small," she said. "It's about introducing
Marriott to a new customer -- an anti-chain customer."
Marriott knew that independent hotels were struggling and
would be more open to an approach in a soft economy, Leitner
By the end of the year, Autograph will have 25 hotels, she
Even the newest addition to the Las Vegas Strip, the
Cosmopolitan, is on Autograph's roster. In October 2010, Las
Vegas Sands Corp's (LVS.N) resorts, the Venetian and the
Palazzo, agreed to pay InterContinental Hotels Group (IHG.L)
for access to its sales force and loyalty program.
For hotels like Denver's Teatro that want to stay
independent but still recognize the importance of loyalty
programs in customer retention, there's Stash, a rewards system
started last year by a group of e-commerce veterans.
Stash members earn five points per dollar spent at any of
146 participating hotels, and can redeem those points at other
hotels in the network.
"Some people book because you're independent," said Cox of
the Hotel Teatro. "We wanted to go after people who like
independent hotels and want to stay in them."