Making a rare appearance at a hotel investment conference,
the chairman of Starwood Hotels talked about thinking outside the box, service,
AI and more.
NEW YOK CITY – Starwood Hotels Chairman Barry Sternlicht
went analog when summing up his company’s mission in an ever-changing and
dynamic hotel industry: it’s still about service, he said on Tuesday morning at the NYU investment conference.
On stage to accept the Jonathon Tisch Active Citizenship
Award and interviewed by Tisch himself, Sternlicht entertained with glib comments and also emphasized that differentiation
in a hotel product is the key to pricing power. “You have to think outside the
box,” he said. “The instinct is to go like everyone else, and that’s exactly
the wrong strategy to adopt… Today those piranha brands are eating the lunch of
the old brands in the United States.”
Having recently revived the Starwood Hotels name and
management company, Tisch asked Sternlicht if new brands are coming beyond the
group’s 1 Hotels, Treehouse and Baccarat. Sternlicht admitted that at least one
new brand is in the works but would not elaborate.
These new brands are much easier to launch through social media… People are willing to try things, and they can find them on social media. It’s not about your million-dollar marketing budget. It’s about connecting to the right people with a tight mission and then drawing that group into your property.
Barry Sternlicht
But Sternlicht followed up by saying the industry and consumer
tastes are evolving. “The rise of independents are hurting older brands. They
have to stay relevant today… These new brands are much easier to launch through
social media… People are willing to try things, and they can find them on
social media. It’s not about your million-dollar marketing budget. It’s about
connecting to the right people with a tight mission and then drawing that group
into your property.”
He expanded on the importance of service suggesting guests
like hotel design, but they compliment the people who take care of them. “It’s
not a hard business. Pay attention. Do everything a little better,” Sternlicht
said. “A lot of people don’t do that. Taking costs out is for monkeys; driving
revenue is the hard part, and you need to really focus on return on investment.
Think about each department and how you can maximize the returns.”
The conversation also briefly addressed artificial intelligence
and Sternlicht implored the crowd to “treat AI as your genius child. You just
have to figure out how to get the genius out of it, working 24/7 for you, and
you will be astonished.”
Staying on bigger picture subjects, Sternlicht also talked about the
importance of a liberal arts education, being curious, critical, and assuming
you know nothing. “Those are the things that will bring you success in the long
term,” he said.
Sternlicht added that he loves the hotel business and believes it
will always grow, especially because of emerging middle classes in China and
India. “You’re in a growth industry and you have a good mission, which is
helping people in their lives.”
He continued, “If you like people, be in this industry, if you
don’t go code in a garage in Mongolia. This is a fun business. It’s really
fun, and it should be fun… And it’s good to be in an industry that’s good for
the world… Nothing is like the hotel industry, and you should be all excited to
work in this dynamic industry where there’s something for everyone to do.”