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Starwood Hotels CEO, Frits van Paasschen, Talks About Global Opening Spree
for its Nine Brands and Why Miami Remains an Appealing Market

By Hannah Sampson, The Miami HeraldMcClatchy-Tribune Regional News

April 02, 2012--Starwood Hotels & Resorts Worldwide is on a hotel opening spree. Last year, the global company -- whose nine brands include Sheraton, Westin, W Hotels, St. Regis and Element -- added 81 new hotels around the world.

This year, another 80 or so are on tap to open -- and 2012 has gotten off to a strong start in South Florida, where both the luxury St. Regis Bal Harbour and the earthy Element Miami International Airport have opened since the beginning of the year.

They follow the 2009 opening of W South Beach and W Fort Lauderdale and upgrades at the Westin Beach Resort & Spa in Fort Lauderdale.

Frits van Paasschen, the Stamford, Conn.-based company's president and CEO, was in town recently for opening ceremonies at the St. Regis and Element, where he and other executives demonstrated pedal-powered generators on stationary bikes that will be placed in the brand's fitness centers.

In an interview at the new Element, van Paasschen talked about the company's growth in Miami, why business school was the right move and his first job as a newspaper delivery boy.

Q: Starwood has the St. Regis that just opened and a new Element. One has butler service and here you can power your own cell phone by pedaling. Do you envision that you will have customers who, depending on the circumstance, want to stay at both ?

We want to have brands that are truly distinctive, not just from each other, but in the marketplace. Secondly, we want to make sure they are compelling to a certain kind of traveler. What we find is that same person may be a different traveler depending on the trip....So if I'm having a board meeting, I might have that meeting at a St. Regis. If I'm celebrating my daughter's 18th birthday, I might hold that at a W. If I'm going with my son to a sporting event, we might stay at a Four Points by Sheraton. So each of these brands has a different purpose and a different reason to be.

Q: What is Starwood's growth potential in South Florida?

We continue to believe that South Florida is a great opportunity to grow the hotel business. So we have 14 hotels open today and another five for which we have definitive plans of opening. Most of those are Alofts and Elements, so more in what we call the specialty select segment. That having been said, there are a few things that give us a great deal of interest in this market. Globally, our strongest market last year was Latin America...and we all know that Miami isn't just a gateway to Latin America, in many cases it's also a hub. So that economic growth bodes extremely well for this market, recognizing also that as we put hotels in those markets, we create demand for our brands here in Miami.

Having looked at just pure population growth in Florida and projected growth, Florida continues to outpace the rest of the country -- and some of that has to do with the fact that yesterday we were all standing outside in shorts on March 15 and nobody thought that was unusual. In addition to that, the investments that have been made here in infrastructure -- whether it's the airport, the rail connection in the central station, the new Marlins stadium, the development around conventions -- this is a market that is clearly getting more and more attractive and more and more amenable to inbound and transient travel.

In addition to that, if I look at our own, and I look at the market occupancy statistics for 2011, they're quite strong. So in a market that you could argue has some seasonality to it, to have the occupancy levels that we had in 2011 is very encouraging and points to the fact that we still have plenty of demand. So those are all reasons why we're quite bullish on South Florida.

Q: What does W stand for?

There's some mythology around that, but W is a creative name that reflects a brand that goes its own way. In 1998, it was a way of having a hotel brand that caused people to stop and take a look at it and today, I think, has become iconic and synonymous with a new style luxury brand that has popular culture, music, design, fashion and yet all the convenience of a great business hotel or the comfort of a great resort. So I think W has become an iconic badge of the brand. It stands for whatever you want it to stand for.

Q: You were mentioning the growth potential here and the investment that's been going on...Do you have any thoughts or feeling about the potential for Miami to become a giant casino market and what that would mean to the hotels here?

I should start by saying we're not in the casino business. We do operate alongside casinos and in some cases with casinos adjacent to our properties. But it's not a space that we are directly in the business of managing. Having said that, where we've seen casino development, it can be a quite positive thing for the hotel business. We're on the verge, for example, of opening the largest hotel in our system in Macau. So we're certainly well-acquainted with the casino opportunity as a demand generator. I suppose from a purely pragmatic standpoint, as a way of generating tax revenue and creating more of a destination, it can be quite positive.

Q: What do you like to do in Miami when you're here?

I went to Art Basel for the first time, not this December, but the year before, and enjoyed not just the event itself but engaging in the Miami art scene. I've also been down to Miami with my family in the colder months up north and enjoyed some quiet time next to the pool, on the beach, going for a ride in the morning and walking around. I think I do what people typically like to do when they come down here.

Q: Where do you stay?

I've stayed in a range of properties, the Westin Diplomat, the W Fort Lauderdale, W South Beach, I stayed here [at the Element] earlier this week, just last night at the St. Regis Bal Harbour....I do enjoy being able to see different neighborhoods in any city and I think what's the mark of a real city is when you have neighborhoods with distinct personalities and areas that are not better or worse, but have their own atmosphere and their own vibe.

Q: What class do you think every business school student should be required to take?

I think that right now what is so important to recognize is that the world is on the cusp of an extraordinary rate of change and between the rapid emergence of the middle class and a higher class around the world and the exponential growth in technology and how it influences people's behaviors and perceptions, what anybody should be doing, whether they're in business school or in any job, is trying to understand what the implications are of that massive shift on their business and on what it takes to succeed.

I say that not remembering very much at all from what I did in business school. But if asked whether I thought it was worthwhile, my answer is unequivocally yes, because I met my wife [Laura] there... who reminds me somewhat regularly that she did better in business school than I did.

Q: BlackBerry: blessing or curse?

I think it's a knife that cuts both ways. What I think being connected does on the negative side is it really does blur the distinction between leisure and business. And email or thinking about work is a small motion of your thumb away at any moment. For those of us who really do like our work and love the people we work with, it's very easy to slip into work -- and yet there's real value in disconnecting. Q: What was your first job?

I started delivering newspapers [The Seattle Times] in sixth grade and the way it worked at that point was you delivered the papers, you got a bill from the newspaper company, and you had to collect from the people to whom you were delivering. And so in effect you were running a small business.

Q: What's the first thing you read in the morning?

I usually turn on my two devices [BlackBerry and iPad]. For the most part, I read newspapers online as opposed to in print just because I'm always in different places. I like to read The New York Times and The Wall Street Journal or [International] Herald Tribune or the FT [Financial Times]....I like to read history. There are so many things changing today, what I look at in history are lessons in how people dealt with other situations and what lessons we can draw today.

Q: Is there a historical book that you've found most enjoyable?

I guess I have to reveal my bias towards my Dutch heritage. There's a wonderful book called The Island at the Center of the World by an author named Russell Shorto who talks about Dutch New Amsterdam -- which of course is New York today -- and the influence that that had on the forming of America.

Q: What keeps you up at night?

Climate change and the need for a new view toward sustainability as society would be one. I suppose also from a business perspective having lived through, not directly, but as a citizen of the world, 9/11 and then the financial crisis, the idea that with the enormous change that's happening in the world today and the great opportunity that it represents, a recognition that coupled with that is a greater degree of volatility and the thing that you're not worrying about right now that you should be worried about. The unknown unknowns, as it were. But I have to say, I'm a pretty incurable optimist, so I describe myself as a mildly anxious optimist.

Q: What is a great day for you?

If I get to have some exercise, time with my family and a chance to learn something, that's a pretty great day.

Q: Do you have a favorite beer, based on your history?

My favorite beer was and remains Blue Moon....What many people don't realize is it is a Coors Brewing Company product.

Q: With an orange or without?

With an orange.


(c)2012 The Miami Herald

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