Starwood Hotels & Resorts Worldwide, Inc. announced an unprecedented managerial endeavor to move its Senior Leadership Team to China for one month. From June 8th through July 11th, Starwood President & CEO Frits van Paasschen and the company’s top executives will be headquartered in Shanghai, where they will conduct day-to-day business on a 12-hour time difference with their “usual” operations in White Plains, New York. This unique relocation underscores Starwood’s game-changing growth in China, which recently became its second largest market outside of the U.S. and its fastest growing. The move also reflects Starwood’s innovative approach to cultivate a more global culture in a company that grew up largely in the United States.
“With properties in nearly 100 countries, Starwood is no longer an American company that happens to run some hotels overseas. Today, we’re a global company that happens to be based in New York,” said van Paasschen. “Eighty percent of our future pipeline is outside of North America, and nowhere is more emblematic of our global growth than China, where we will open one hotel every two weeks this year. China’s spectacular transformation is hard to grasp unless experienced firsthand – it’s the proverbial, ‘you can’t really understand a culture until you buy groceries there.’”
From their home base in Shanghai, van Paasschen and seven members of his Senior Leadership Team will conduct daily business in an unconventional effort to understand, appreciate and ultimately leverage different cultural perspectives and approaches to business. In addition, more than 20 Starwood executives from the U.S. and international locations will join the team throughout the course of the relocation. The group will delve into Starwood’s extensive business in China, meeting with local customers, partners and developers, while also touring new properties throughout the country.
“Starwood has a card to play with the growing number of affluent Chinese tourists, they still have a lot of work to do with adjustements in their global strategy and deeply understanding the expectations of this new generation of Chinese travelers. ” said Pierre Gervois, CEO of China Elite Focus.
Impact of Chinese Travel Market Extends Beyond its Borders
During its month abroad, Starwood’s Senior Leadership Team will also bolster the company’s guest loyalty outreach among Chinese travelers. As one of the world’s fastest growing travel markets, with 100 million outbound travelers expected by 2015, China will play an outsized role in global travel within the next decade. The country continues to be the richest source of new loyal travelers for Starwood, with Chinese enrollment in Starwood Preferred Guest, Starwood’s loyalty program, jumping 71 percent in 2010.
Most “Globally Fluent” Companies Will Win
Based on the anticipated success of Starwood’s managerial experiment in China, the company intends to implement a month-long global relocation annually. Its next high-growth target markets include Brazil, the United Arab Emirates and India.
“It is not just language that gets lost in translation, but also cultural nuances. The companies that will break away in an increasingly global world will be those that are most globally fluent,” said van Paasschen.
China Illustrative of Explosive Growth in Emerging Markets
Starwood’s global relocation is also a symbolic trip, as the company reaches a new milestone: for the first time in its history, Starwood has more hotels outside the U.S. than inside. As the world’s most global hotel company with more hotels in emerging markets than its competitors, Starwood is on the frontlines of globalization, and is experiencing explosive growth in India, the Middle East, Africa and of course, China. Starwood enjoys a first-mover advantage in China dating back to 1985 with the landmark debut of the Great Wall Sheraton Hotel in Beijing, which was the first international branded hotel in the People’s Republic of China. Today, Starwood has more than 70 hotels in China flying eight of its nine brands’ flags and another 90 properties in the pipeline.