Look beyond Asia,
Starwood exec says
The CEO for the owners of
By Russ Lynch
Sheraton and Westin says
Europe has potential
Star-BulletinHawaii won't see its Asian tourist business recover this summer, or even next summer, because the Japanese aren't in a spending mood, says the top executive of a major new player in the state's hotel industry.
But even though that market may not rebound until late 1999, that's no reason for Hawaii's tourism industry to sit around feeling depressed since there are other strong and growing markets, said Juergen Bartels, chief executive officer of Starwood Hotels & Resorts Worldwide.
"You may be artificially depressed here because you keep looking to Asia," Bartels said yesterday at a media briefing at the Sheraton Waikiki.
Starwood now owns both the Sheraton and Westin hotel businesses, which operate a total of nine hotels in Hawaii. Bartels is in Hawaii as part of a seven-week world tour to look at selected hotels out of Starwood's portfolio of 664 properties, meeting with hotel employees and the press.
At the Sheraton hotels in Hawaii, Asia business appears to be down about 10 percent compared with last year,Bartels said. But mainland business is up by about the same amount, due to the strong economy there, he added.
Europe is booming too and there is a new generation of well-off, free-spending Europeans that can be tapped for tourism, he said.
One idea from Bartels: "The governor should take three famous chefs to Europe. If you got your chefs on French television and they (viewers) look in the pot and see what's cooking" it will make a strong impression and encourage tourism. Such a tour could combine Hawaiian music and culture with cuisine, he said.
Meanwhile, Hawaii isn't really doing poorly, said Bartels, who said the state's hotel occupancy is higher than it is in most places.
"It's hard for me to sign on, to think depressed, at 80 percent or 83 percent," which is about the occupancy of the Sheraton hotels in Hawaii, he said. The U.S. average this year is expected to be 65 percent or less, Bartels said.
The German-born Bartels, 57, who has been in the hotel business since he was 16, joined Westin Hotels & Resorts in 1995 as chairman and chief executive after top executive positions with the Ramada and Carlson hotel chains.
Phoenix-based Starwood Hotels & Resorts bought Westin in January and completed its purchase of ITT Corp., with its Sheraton hotels and Caesars casinos, in late February. The parent company has since split its hotels and gaming businesses into two separate operations and Bartels was given the top job in the hotel group in March.
In Hawaii, Starwood operates eight Sheraton hotels, six of them owned by Japan-based Kyo-Ya Corp. and two under other ownership, and one Westin hotel, the Westin Maui.
Starwood has embarked on an expansion plan, which Bartels said will mostly consist of part ownership and management contracts with existing hotels as well as buying hotels.
Much of the expansion will be in foreign countries, he said. Unlike the United States, where property values have soared, many overseas properties are undervalued, he said.
Bartels said the company plans to add 150 hotels this year and has already signed deals for 116, 59 of them in North America and 39 in the Asia-Pacific area.
The company's growth has been rapid.
Bartels said Starwood had 10,800 rooms in 1995, grew to 19,900 the following year and 30,055 in 1997 before the Westin and Sheraton acquisitions. Now it has 139,018 rooms.
The company has 337 hotels under the Sheraton brand, plus 53 in the Luxury Collection brand that was developed by Sheraton, 75 using the Four Points by Sheraton brand, and 113 under the Westin name. The rest are "others" bought by Starwood that were already operating under management deals with other hotel operators.
Those are being transferred as fast as possible into Starwood management, Bartels said.
The company, meanwhile, has seen its profits skyrocket. Today, Starwood Hotels & Resorts reported that its first-quarter profit rose more than fourfold thanks mainly to its acquisitions.
The real estate investment trust earned funds from operations of $150 million, or 70 cents a share, up from $31.1 million, or 60 cents, a year earlier.
Bartels heads next to Australia, then to Hong Kong, South America and Mexico. He also plans to visit the United Kingdom and Europe, ending what the company calls his "road show" in the Middle East in mid-June.
