Starwood Hotels & Resorts Competitor Analysis Essay
Starwood Hotels & Resorts Competitor Analysis
Starwood’s market share should either stay the same or grow in the future. With plans to continue expanding into emerging markets like China and continuing to get out from under their real estate ownership and move toward a more management/franchise focus their revenues should continue to increase over the next few years. Starwood competes by focusing on their brand name. They want the name to evoke thoughts of comfort, style, great service, and a home away from home for the more luxurious clients and business travelers.
Major influences on the distribution of market share are going to be technology, availability, and the economy. With the emergence of travel sites that help search out the best prices while also giving information on amenities and star ratings, hotels will have to be more conscious of their standings on these sites to continue to dominate in their segment of the market. Having your hotels in the best locations, available to the consumers where they need them is going to be a big influence on market share.
Again many brands are expanding into new markets like China to try and keep up with the shift of travelers. In doing this they hope to catch that revenue flow shifting to those markets. The last factor, the economy, is an ever changing issue. With the downturn in America many hotels are turning to other markets to keep revenues coming in. Of course like America, new and emerging markets are also subject to economic swings in the future so the industry must stay aware of those swings and anticipate when they may hit. Financial Performance:
The following ratios were used to compare Starwood Hotels’ financial performance to the industry: Operating Profit Margin, Return on Capital Employed, Sales/Profit / Fixed Assets, Current Ratio, and Gearing. As you will see Starwood Hotels financial performance mimics that of the economy with the downturn after 2008 and the slow rise back up through the past few years. For the next few years there is a prediction that these numbers will continue to get better as the American market comes out of the recession and as Starwood moves into emerging markets.
Starwood competes almost solely on its brand name and what it stands for. Focusing on business and upscale travelers they create an ambiance specifically tailored to this clientele. With chic interiors and extra services offered they provide the qualities this specific audience seeks out in their travels, helping Starwood be the top competitor in the luxury lodging industry. Competitive Position:
Starwood Hotels’ position in the market place is in the luxury hotel market, which they dominate. With hotel brands such as the W, Westin, Sheraton, and ALoft you can physically see the difference in appearance right away with high end decorations and top end comforts. However, they underperform in the everyday hotel market where Intercontinental dominates. Because Starwood is so focused on luxury, great comfort, and that brand name they miss out on the large market share of the everyday travelers who want great comfort but also seek out great prices as well.
University/College: University of California
Type of paper: Thesis/Dissertation Chapter
Date: 3 January 2017
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