LOS ANGELES — Change is coming for SH Hotels & Resorts, but not just yet.
The Starwood Hotels name is coming back, though for now, nothing is official, SH Hotels CEO Raul Leal said. There will be a broader strategy shared once the name change is announced formally with a new logo and website.
Barry Sternlicht, chairman of SH Hotels and founder of the former Starwood Hotels & Resorts Worldwide, has been thinking about bringing the name back for a long time, Leal said. Sternlicht is also the chairman and CEO of Starwood Capital, of which hotel brand management company SH Hotels is an affiliate.
“It’s near and dear to his heart,” Leal said. “It’s a beloved brand still in the eyes of consumers and employees. From our perspective, it’s just going to help us grow the existing platform, the current lifestyle, mission-driven hotels that we have.”
The company currently has four brands, and all of the legacy Starwood hotel brands were sold to Marriott International in 2016. Down the line, SH may add some news brands, but the current focus will be on the name change and its scheduled openings, Leal said.
SH Hotels’ 1 Hotels brand has several hotels set to open this year. The 153-key 1 Hotel Seattle is set to open this spring and has started taking reservations. The 277-key 1 Hotel & Homes Melbourne will open in the middle of 2025 with 114 residences. The 288-key 1 Hotel Copenhagen will open this summer, while the 1 Hotel Tokyo is scheduled to open in the autumn.
Beyond 2025, the 1 Hotel brand has projects underway in Cabo San Lucas; Paris; Elounda Hills in Crete; Austin; Riyadh; and San Miguel de Allende in Mexico.
The Treehouse Hotels brand has two openings set for spring 2025: the 14-story Treehouse Manchester in England, and the 254-key Treehouse Silicon Valley. The brand has additional projects in Adelaide, Australia; Riyadh; and the Brickell neighborhood of Miami.
The Baccarat Hotels & Residences brand is expanding into several global locations in the coming years: Rome; Florence; Brickell in Miami; Riyadh; Dubai; and the Maldives.
“From this point forward, just as SH, we have about five or six openings a year for the next three or four years of confirmed, under construction, on the way hotels,” Leal said. “So, a good pipeline expanding all three brands.”
Some of these hotel openings have been in the works for a long time but faced COVID-19-related delays, he said. Some may have opened a year sooner had it not been for the pandemic and subsequent construction- and labor-related issues, but they’re all coming to fruition now. The company is well-positioned to open them, and it has people in its Asia-Pacific region office to help those properties get up and running as well.
As consumer preferences have changed, people are looking for a different form of travel and entertainment, he said. They want things that are programmed a little more but focused on the mission side of the company, which is what made the 1 Hotels brand so successful, with its focus on sustainability. Each brand has a similar point of view but speak with their own voice.
“I think that our perspective has hopefully helped to improve the planet,” he said. “One hotel at a time is the way that I would say it.”
One of the factors driving the international location-heavy pipeline is interest rates in the United States, Leal said. The goal is to continue expanding in the U.S. as there are more opportunities to grow each of the three brands, since so many projects are done through conversions. If interest rates come down, the company would consider certain secondary markets that could support a nightly rate premium.
“For us, it’s quality over quantity,” he said. “We’re not looking to do 1,000 hotels, so in that sense, it would be different than the Starwood in the past.”
That size goal, of course, could change over time, but that’s not the current focus, he said.
New projects depend on a number of factors, Leal said. There’s the strength of the potential market alongside what the sponsor brings to the table, such as already acquired land, to help offset some of the construction costs.
“Our most important thing is to ensure that, if we've got to do the project, because we're owners ourselves, is that this will pencil in the long term for our partners,” he said. “We pass on more stuff than we do. Some things don't make any sense given construction costs or a segment of the market, and I think we have to be responsible that way.”
Currently, SH Hotels manages all its properties and isn’t planning to switch to the franchise model, he said. The company has benefited from having low turnover compared to the rest of the hotel industry.
“We believe it is because, or so our team members tell us, people are looking for businesses to associate with today that are purpose driven and that do what they say they’re going to do,” he said. “That’s an important thing for business in the future, for people to consider that. If you want people to come back to work, it’s got to be meaningful.”