Media Relations Project: Starwood Hotels and Resorts Worldwide, Inc - Case Study Example

ASSIGNMENT FRONT SHEET Please complete all sections electronically 802 Media Relations Faculty: Mrs Gérard Assessment title: Media Relations Case Due date:      Due time:      Word count:       Statement of Authorship I confirm that this work is my own. Additionally, I confirm that no part of this coursework, except where clearly quoted and referenced, has been copied from material belonging to any other person e.g. from a book, handout, another student. I am aware that it is a breach of GIHE regulations to copy the work of another without clear acknowledgement and that attempting to do so renders me liable to disciplinary procedures. To this effect, I have uploaded my work onto Turnitin and have ensured that I have made any relevant corrections to my work prior to submission. Moreover I confirm that my submitted paper version is identical to the version submitted through Turnitin. Student name and signature: _________________________ _________________________ FOR OFFICE USE ONLY(Date / Time / Signature / Stamp of the authorized administration) Date: ……..…… Time: ……..…… Media Relations Case Starwood Hotels and Resorts Worldwide, Inc. Introduction Starwood Hotels & Resorts Worldwide, Inc. has grown to be one of the leading companies in the global hotel and leisure industry (Lodging Hospitality, 2005). This achievement is incredible considering that unlike many of its competitors the company was established less than two decades ago. The company is well known among customers and industry players as having many of the best brands in hotel and travel. The company has been on the forefront of reshaping public perception about hotel and travel experience through its ever fresh innovations, designs and product differentiation. Since its first move into the hospitality industry in 1995, Starwood has dramatically expanded its portfolio over the years though brand expansion and acquisition of other hotels. Starwood’s strategy for leadership in cutting-edge innovation and its approach to design has seen the company work with the most renowned designers, architects and artists to bring the ultimate hotel experience to its customers (Lodging Hospitality, 2001). Starwood Hotels & Resorts Worldwide, Inc. has been selected for this study because of the company’s size and reputation in the hospitality industry. The global reach of Starwood and its scale of operations imply that the company has got one of the most elaborate media relations programs. Similarly, the innovative edge of the company also implies that its media and communication strategies are well established to match its market reputation. This provides a great opportunity to research, analyse and critique the media relations practices of one of the leading companies in the hospitality industry and thus gain a deeper insight into the subject. 1. Starwood Hotels and Resorts Worldwide, Inc. Nature of the business Starwood operates a hotel and leisure business worldwide. The company conducts the hotel and leisure business both directly and through its subsidiaries located in some of the most prime locations worldwide. Starwood has a diversified group of hotels globally including some popular brands like St. Regis, New York; Hotel Gritti Palace in Venice, Italy; The Phoenician in Arizona; and The St. Regis in Beijing, China. The company operates about 850 hotels in a global network of more than 95 countries and employs over 150,000 people (Binkley, 2004). Brief history Starwood was founded by Barry Sternlicht in the early 1990s as a private-equity real estate investment company (Starwood Hotels and Resorts, 2013a). The company entered the hotel business through a series of acquisitions in the miod-1990s. In 1994 the company purchased Hotel Investors Trust, this was a public company combining hotel operations with real estate management. Three years later in 1997 Starwood acquired Sheraton and Westin hotels, two established brands owning hundreds of hotels between them. Later purchases followed as the company expanded and assumed market leadership in innovation, design, and consumer marketing (Lodging Hospitality, 2005). Size: revenue, staff, locations, structure Starwood employs about 150,000 workers in all its properties around the world. The greatest majority of the workers are employed in the hotels owned or managed by the company. Most of Starwood’s hotels are located in major cities in the world like New York, Honk Kong, Beijing, London, Paris and Sydney. The company runs resorts in some most of the best tourist beaches in the world. The company has four main revenue sources including owned, leased, and consolidated joint-venture hotels; vacation ownership and residential properties; management and franchise fees; and other revenues from franchises properties. This adds up to gross profits of about 1.6 billion annually (Starwood Hotels and Resorts, 2013a). Business goals and objectives Starwood’s main goal is to grow its portfolio further and expand its operations so as to assume market leadership in all leading hospitality markets in the world. The company’s objectives include brand building and development of new projects. The first objective is aims at encouraging more customers to stay in the company’s existing facilities while the second objective aims at expanding the number and reach of hotels in Starwood’s chain (Binkley, 2004). Products and services Starwood offers a wide range of products and services in the hospitality industry including hotels and motels; membership hotels; real estate investment trusts; traveler accommodation; and rooming and boarding houses. Some of the company’s most popular property brands include St. Regis and Luxury Collection, Sheraton, W, Westin, Le Meridien, and Four Points (Starwood Hotels and Resorts, 2013b). Target market, customers Starwood targets markets all over the world where there are growth opportunities in tourism and travel. The company has two main types of customers. These include regular consumers of hotel services that stay in the hotels operated by the company, and customers who use the company’s management services and franchise its brands (Starwood Hotels and Resorts, 2013b). The company is currently largely focusing on management and franchise customers for its growth. The table below shows some of the main properties owned by Starwood, the main product offered is hotel accommodation but the company packages it as “lifestyles” and offers eight branded “experiences” targeting different categories of customers. The hotels and resorts do not have any official targets in terms of gender and sex but some of the facilities can handle families and therefore cater for children too. Name of Hotel/ Resort Hotel/Resort type Target Market Rating St. Regis Hotels and Resorts Upscale ,Full-service luxury hotels and resorts Business travellers, leisure travellers, and couples 4 and 5 star Luxury collection (Some are branded as St. Regis, Sheraton or Westin) Upper scale, Full-service luxury hotels and resorts with spectacular settings and magnificent decor Elite clientele of all types: business travellers, leisure travellers, and couples 5 star and 6 star Sheraton Hotels and Resorts Upscale full-service hotels and resorts Business and leisure travellers 4 and 5 star Westin Hotels and Ressorts Luxury and upscale full-service hotels and resorts Families, couples, leisure travellers, business travellers (All ages) 3,4, and 5 star W Hotels Full-service urban hotels Mainly business travellers 3 and 4 star Four points by Sheraton Moderately-priced full-service hotels Families, couples, leisure travellers, business travellers 3 star Le Meridien Full-service luxury and upscale hotels and resorts Families, couples, leisure travellers, business travellers 3,4, and 5 star Aloft Hotels Select-service low-cost hotels Couples, leisure travellers, and budget travellers (largely young people) 3 star Channels to market Starwood utilizes its company website as well as the websites for the individual hotel and resort facilities for marketing. The company also makes use of social media, hospitality and travel industry magazines, television and online hospitality websites for marketing (Starwood Hotels and Resorts, 2013b). Examples of magazines used include CFO Magazine which serves senior financial executives, Java Magazine, Traveller, Durrah, and Information Builders Magazine. An example of websites with Starwood adverts and information is infromationbuilders.com and hoovers.com. Ownership and leadership As a result of several mergers, acquisitions, and restructurings, the corporate structure of Starwood is quite complex now. The company is owned by shareholders who own both a share of the Corporation’s common stock and a share of the Trust. Starwood is led by several important decision-makers including CEO, the Chief Marketing Officers, and President of the Real Estate Group. The current CEO and President of the corporation is Mr. Frits van Paasschen. The current chairman of the Board of Directors is Mr. Bruce W. Duncan while the Corporate Secretary is Kenneth Siegel. Suppliers Starwood has a large number of suppliers for the construction of its properties and hotel management. The suppliers supply all the hotel needs and ensure the smooth running of operations. Some of the major suppliers include Aveda toiletries; Powerade sports drinks, Luna Bars and Rodale magazines. Others include Bliss Spas and Sirius Satellite Radio (Starwood Hotels and Resorts, 2013b). Competitors Starwood’s greatest competitors in the hospitality industry are in Europe and North America. Some of the company’s greatest competitors include Marriot International, Accor SA, Cendant, Hilton Hotels, and Whitbread. Currently, Cendant is the global market leader in terms of net income (Starwood Hotels and Resorts, 2013a). Company statistics Starwood Hotels and Resorts is the largest global high-end hotel company with nine distinct lifestyle brands and over 181,000 associates (employees) worldwide. The company has over 1,175 hotels and resorts in 100 countries all over the world (Starwood Hotels and Resorts, 2013a). 2. Brand Brand One of the greatest attributes of Starwood is brand-building. The company’s marketing an operation strategies aim to convince customers of the superiority of its brands in the hospitality industry. The company indicates that “Westwood is a community of brands; we hope to unite guests with positive, memorable experiences through great services and offering guests experiences that are as different as the locations they are in.” (Starwood Hotels and Resorts, 2013b). Some of the messages associated with the company’s brands include luxury, convenience, and moderately-priced services. Sherwood depends on the strength of the names of its hotel to sell their brands, names such as Sheraton, Westin, and W hotels are well respected brands associated with quality service (Starwood Hotels and Resorts, 2013b). All of the company’s brand names, their logos and taglines were already well established in the market before the hotels were bought by Starwood or they have been well thought to reflect the luxury and quality offered by the company. Company mission statement Starwood’s mission statement is to consistently exceed the company’s guests’ expectations in terms of the products and services provided to its business and leisure travellers. The company strives to create an experience that is responsive to the needs of the guests by utilizing the information received from the latter with responsibility. Starwood is also committed to respecting guests’ privacy and adhering to the principles of applicable data protection and privacy laws globally (Lodging Hospitality, 2005). Company values Starwood has built its values around three main promises: to do the right thing, to go the extra step, and to play as a team. These are supposed to guide the company’s employees and associates in all their actions wherever they are working in the company’s chain of properties. Starwood has come up with a code of conduct intended to help its associates maintain and uphold the company’s values. Everybody associated with the company is urged to act with integrity, keep high standards, and speak up when actions or behaviours of those associated with the company are not in line with the code of conduct (Starwood Hotels and Resorts, 2013a). Key messages Some of the key messages provided by Starwood Corporation are included in its annual company reports and other communication material. Basically, the corporation is dedicated to growth and leadership in the hospitality industry (Blank, 2005). Sustaining innovation is one of the most important messages the company is sending out to its associates and customers, innovation is considered the hallmark of Starwood’s brands that makes it products and services stand out in the market. The company is now turning to the mobile revolution to take its innovative edge to new heights through application of the technology in hotel booking and communication with customers. Another key message from the company is that it is growing where demand is growing and it focuses on satisfying demand in the high-end and luxury travel segment of the hospitality industry. Company tone of voice Starwood’s tone of communication is very subtle and inclusive in all its communications, both internal and external. The company communicates by using terms such as ‘we’ most of the time and tries to create the sense of belonging and working together among customers and associates. The voice of communication is also subtle, measured and deliberate with key messages being delivered in a considerate but firm tone. All of the communicative materials provided by the company carry an authoritative voice indicating a sense of knowledge and understanding of what is best for the company and customers. For example the company CEOand President, Mr. Frits van Paasschen says in the company 2013 annual report “In 2012 we turned our innovation lens back to loyalty. SPG was already the industry’s leading program and we made it even more valuable for members and our hotels by introducing new benefits...”. This tone of information is not just subtle and inclusive but it carries authority. CSR initiatives and community involvement As a corporation Starwood has a various CSR commitments towards the society and environment. The company considers the impact of business on the world beyond the confines of its business and supports initiatives such as environmental sustainability, promotion of human rights for all, giving back to the community and providing a better world for people to experience. According to the company code of ethics, it is has a legacy for caring for the communities in which it operates. Starwood leverages its brands, its relationship, and its global reach to help people in need and to make a sustainable mark in the world. The company environmental sustainability policy focuses on continual improvement in conservation of water and energy, reduction of emissions, enhancement of indoor environmental quality, and examination of the company supply chain (Starwood Hotels and Resorts, 2013a). 3. Target audiences and media relations Target Audiences The main target audiences for Starwood Corporation include customers, internal/ property workers and associates, employees, and the general public. Customers form the most important target of the company communication as these are the first people the company tries to reach. New customers are mainly targeted through marketing communication while repeat customers are targeted with both new marketing communication and other forms of communications that treat them as members (Blank, 2005). The customers targeted are always adults although advertisements may also target children through their parents. Basically, the media strategy is linked to the marketing strategy of the corporation and messages going out to the customers target them in terms of income, location and areas of preference in terms of tour and travel. PSG members, who consist of loyal customers to the company’s hotels are targeted by private communication including newsletters, e-mails and even calls if they are lifetime members. On the other hand communications to potential customers in the way of advertisements depend on their global locations and cultures, these are fashioned to identify with their cultures. Internal or property communication targets important members of the company including the corporate team, the crisis management team, the directors, and the operational managers of the properties owned and managed by Starwood. Communication targeting the public focuses mainly on PR is carried out though press releases and other media channels. Finally, employee communication targets the employees of Starwood at all the various different levels throughout the organization. Starwood’s Media Strategy and Relations Starwood’s media strategy mainly involves utilization of all effective means of communication and media channels to get its information out to its customers and potential customers. The company maintains good relationship with the media in general and particularly targets media that is involved in the hospitality industry for its communications, adverts and other material. The main strategy by Starwood involves having PR leaders on the ground, utilization of strategic press releases for important communications, and creation of positive relations with the media (Blackman and Ritchie, 2008). The company utilizes big data management companies which use analytics to identify the right kind of customers and media outlets to target all over the world since its area of operation is large. Starwood is careful to maintain good relationships with important media in the hospitality industry by working together with them. The company also utilizes its hotel websites and social media pages for communication (Blackman and Ritchie, 2008). Starwood’s PR Agency Starwood employs a number of PR agencies across the world to oversee its PR business in those areas. There are dozens of PR agencies working in different markets and all of them have been selected for their specialization and deep knowledge of their respective markets. For example Luchford APM was appointed the PR agency for Starwood’s hotels and resorts in the Italy and Malta portfolio (Ehotelier, 2014). Similarly, in the Middle East region the company appointed Asda’s Burson-Marsteller as its PR agency. The agencies mainly work as management agencies for the company’s consumer and lifestyle communication programmes across their respective regions. These are mainly marketing and communication agencies and are involved in little else beyond managing the company’s properties brand names (Ehotelier, 2014). Starwood’s Spokespeople Some of the most important spokespeople for Starwood include the corporation leadership and the managers of the various resorts and hotels around the world. Some of the hotels and resorts have their own communication spokespeople or communication teams while others rely on public relations managers. Starwood’s leading spokespeople include the office of the General Counsel, the Chief Human Resource Officer, and the Corporate Secretary for the Corporation (Starwood Hotels and Resorts, 2013b). Currently, the leading PR spokesperson for Starwood hotels is K.C. Kavanagh, she works as the company’s SVP of global communications. Her main duty is to ensure that every day; the brand message is consistent across all communication networks. Apart from the SVP of global communications, Starwood’s CEO and president Frits Paasschen acts as the leading spokesperson for the company (Ehotelier, 2014). Media that covers Starwood Starwood is mainly covered by its own media centre hosted on the company’s media centre website. This centre is responsible for providing press releases and information online on behalf of the company’s properties. The same information is also provided through the press room page on the Starwood hotels website. External media that cover Starwood are numerous and spread all over the world. However the company and its properties feature most in hotel and recreation industry magazines, websites and other material (Lodging Hospitality, 2001). Starwood’s thought leaders Starwood’s thought leaders mainly include the director of brand strategy for the company, the director customer loyalty strategy and operations, assistant directors of digital marketing in different markets. The company’s brand leaders provide thought leadership concerning the brand development and growth of the company and they work directly with the CEO. These include the senior vice president, global brand who is also the leader of Sheraton Hotels and Resorts Group; the global brand leader; the senior vice president, specialty select brands; and the senior vice president, global brand leader for Westin and Le Meridien (Starwood Hotels and Resorts, 2013a). 4. Crisis management Tourism is a very sensitive industry that reacts very quickly to slight changes particularly in politics and epidemics or natural disasters (Fink, 2006)). Crisis management plans are therefore necessary for quick response to such threats and crises. A crisis management plan is supposed to consider every possibility and provide options in the case of a crisis happening (Lynch, 2004). Every hotel is expected to have a crisis management plan and contingency as part of its health and safety strategy for customers and employees, Starwood hotel has comprehensive crisis management plans covering all of its properties depending on their locations and contexts. One of the most recent serious crises to hit Starwood hotels was the hurricane Katrina. In 2005 New Orleans, USA was hit by one of the worst hurricanes that caused heavy loss of life and destruction of property. One of the establishments that were affected was the Sheraton New Orleans, a Starwood Hotels and Resorts property. Over 1400 guests were stranded in the hotel for days as the hurricane caused damages and flooded the city. At this time it was the responsibility of the hotel management including the general manager, chief chef, and other employees. Even though this hurricane was a disaster that affected the whole city, it did not come as a surprise because weather forecasts had warned of a potentially bad hurricane in the area days earlier (Ritchie, 2007). This implies that the image of the hotel would have been measured based on its preparedness to deal with the situation. The image of Sheraton New Orleans was at stake as well as that of Starwood Hotels and Resorts International because a lot of the criticism that faced most establishments in the city after the disaster concerned disaster preparedness and management. It was vital that the hotel manage the disaster well by ensuring the safety and wellbeing of its guests and employees during this time. Failure on the part of the hotel management and the whole company to do all in its power to manage the crisis successfully would definitely hurt the image of Starwood hotels and resorts as far as safety and disaster management was concerned. The crisis resulting from hurricane Katrina was handled very well by the management and staff of Sheraton New Orleans because when the hotel learned of a possibility of a hurricane, the management made sufficient preparations and contingency plans for management of the crisis (Barton, 2008). The plans included purchasing sufficient food stocks and disposable utensils, supplies, bottled water, and other necessities. The hotel management also ensured that the power generators supplying alternative power to the hotel were well serviced and there was enough fuel stock. The hotel also made a checklist of material necessary for emergency situations including flashlights, battery-operated radios and televisions, glow sticks and safety jackets. Most importantly the hotel was well prepared when the hurricane hit and the response time was very short. Communication was effective and all guests were quickly organized and assembled down at the hotel ballroom with their essentials. All efforts were made to ensure messages reached guests wherever they were in the hotel, notes were put under hotel doors, voice mail messages left on phones, announcements made on speaker systems and so on. All these disaster management preparations were put in place because the hotel has encountered hurricanes in the city before and they had learned and developed a good disaster management plan for the same. 5. Media campaign proposal Business objective Currently the global conversation is about climate change, resource utilization and green energy. Most businesses including in the hospitality industry are moving towards greater concern for the environment through strategies aimed at reducing carbon emissions, limiting natural resource use, and creating healthier indoor and outdoor environmental quality (Blank, 2005). The business objective proposal for Starwood Hotels and Resorts is to start investing in ‘green’ hotels and resorts. By ‘green’ facilities, the company will be focusing on designing and building or remodelling some current facilities to incorporate greater aspects of environmental conservation. Many consumers are now very conscious of the goods and services they consume because of environmental concerns of global warming and pollution. The hotel can move towards ‘green’ facilities with less carbon dioxide production through higher percentages of clean energy, plush green environment indoors and outdoors, roofs that allow natural light, room occupant control of light and thermal environment, and provision of food produced organically and with environmentally friendly methods. Most important, Starwood should ensure that its customers and the general public is aware of this move. Strategy, tactics, channels The media strategy for going ‘green’ should involve a sustained campaign aimed at selling the image of the company hotels and resorts as transforming themselves towards greater environmental awareness and conservation. The tactics to be utilized will involve brand repackaging of the hotels and resorts to include ‘green’ considerations in energy use, water use, food and drink, and other services provided. The company should start by sending the message out to its existing customers through usual communication channels about impending transformations. After that the company should then go about planning and implementing the real changes that are required in going ‘green’. Finally, the company should re-advertise its facilities and services using graphics that illustrate some of the ‘green’ considerations that have been implemented in the facilities. The consideration may involve giving options for customers to pay extra to access completely ‘green’ facilities and organic foods. The channels for the media campaign need not be different from what the company is using now but since this campaign will be much more effective with illustrative graphics then it is essential to utilize magazines, television, and internet (social media and company websites). One of the best tactics would be to be to collaborate with some environmental groups and organizations in their activities and to get their endorsements through symbols as well as appearances on the adverts. Target media and target audience(s) The target media would be both internal and external. Hotel and recreation industry media including televisions, websites, and magazines should be targeted for the media campaign. The messages should target all customers that utilize hotel services. Specific activities The specific activities in the project ‘green’ campaign will include; Identification of a project team from the organization and creation of its structures Identification of target media partners Framing of media campaign objectives and sharing of responsibilities Design and editing of media campaign material Launching of the actual campaign (Including its monitoring and evaluation) Improvement and sustaining the campaign Proposed timelines, resources, measurement tools The project can be implemented with short-term targets of two to five years and long term targets of five to ten years. The project can therefore be rolled out starting 2015 to 2025, thus the full implementation period would be ten years. Resources will include personnel like interior designers, architects, landscapers, artists, media personnel specialists in environmental campaigns and project managers. The outcomes can be measured using media surveys, big data analytics to measure customer response, and direct surveys involving customers. References Barton, L., 2008. Crisis leadership now: a real world guide to preparing for threats, disaster, sabotage, and scandal. New York: McGraw-Hill. Ehotelier, 2013. Starwood Hotels & Resorts presents strategy, brand positioning and outlook to media and investors, Ehotelier, [online] Available at: Fink, S., 2006. Crisis Management: Planning for the inevitable. New York: American Association for Management. Lynch, M., 2004. Weathering the Storm: A Crisis Management Guide for Tourism Businesses. Leicester: Matador. Ritchie, B.W., 2007. Chaos, crisis and disasters: a strategic approach to crisis management in the tourism industry. Tourism Management 25, pp. 669-683. Veal, A.J., 2006. Research Methods for Leisure and Tourism: a practical guide. London: Pearson Education Limited. Blackman, D. and Ritchie, B.W., 2008. Tourism crisis management and organizational learning. Journal of Travel and Tourism Marketing 23 (2), pp.45–57. Starwood Hotels and Resorts, 2013. A Better Way to Experience the World: 2013 Proxy Statement and 2012 Annual Report. New York: Starwood. Starwood Hotels and Resorts, 2013. Social Media Policy, 2011. New York: Starwood. Binkley, C., 2004. Starwood to Build Two Designer Hotels in China. Wall Street Journal, 7(1), pp.37. Blank, D., 2005. Research details strength of the industry, Hotel & Motel Management, [online] Available at: [Accessed April 8, 2014]. Lodging Hospitality, 2001. Starwood adopts Six Sigma plan. Lodging Hospitality, 57(3), pp. 13-17 Lodging Hospitality, 2005. 2005 Is Starwoods HOT Year. Lodging Hospitality, 61(7), pp. 132-134 Read More