Westin Plaza & Stamford no more, soon(1)

Westin Hotels & Resorts will be moving out of the landmark Westin Plaza & Stamford at the end of 2001, following a decision by Raffles Holdings to take back the two hotels.

The decision is not unexpected. Industry watchers had been waiting for Raffles Holdings to make its move to hand the two hotels to its hotel management company, Raffles International, since it went public earlier this year and announced aggressive expansion plans.

Two employee meetings were called July 21 by chairman and chief executive officer of RI, Richard Helfer, and acting Asia/Pacific president for Starwood Hotels & Resorts, David Shackleton, to break the news to the more than 1,500 staff.

All employees, apart from Shackleton who has served as managing director of the hotel since 1994, are on Raffles Holdings' payroll and should not be affected by the changeover.

A senior staff, who has been with the hotel for over nine years, said of the staff meeting, "We were not surprised. Most of us had expected it so it wasn't a bombshell or anything."

In fact, he said, "It was very unemotional but maybe that's because we are inscrutable Asians. But really, most of us had expected it."

The issue of branding remains unclear. According to staff at the meeting, Helfer sidestepped the question when it was raised as to what the new name of the hotel would be.

A Business Times report speculated that the Westin Stamford may become a Merchant Court. However industry watchers say this may be unlikely.

Another bet making the rounds is that the hotels could just be marketed under the name of Raffles Towers, offering a two-tier product in the 26-storey Westin Plaza which has recently been upgraded to the tune of S$45 million and the 73-storey Westin Stamford. Westin signed the 15-year management contract in 1986.

"We have been working with Raffles Holdings for the last nine months to find a solution moving forward but we could not reach agreement," Shackleton told TravelWeekly East.

He said he was very disappointed as "it is a major revenue generator and a major hotel in a major gateway city".

"We are obviously looking for alternatives."

For Raffles, the task of managing this 2,046-room property will be a daunting challenge. Westin has consistently run the hotel at high occupancies and healthy average rates.

Last year, it did an average occupancy of 75 percent on an average rate of S$165.

A good chunk of the business comes through the Starwood distribution system. Delivery systems include the Starwood Preferred Guest programme, believed to generate a great deal of business, the Starwood Preferred Planner programme, 30 global sales offices, central reservations offices, the Website and the global distribution system.

This was one area of concern raised by the staff interviewed who wondered if there would be ramifications in marketing. "We have a lot of support in the international arena but with the expansion plans announced by Raffles, perhaps this will be addressed."

Asked how the change in working for an international brand versus a Singapore-based brand would affect staff individually, the staffer said, "Generally, we will miss working for an international chain. We are waiting for Raffles to roll out benefits for the staff. We get perks at Starwood, for example, which include free stays at their hotels and they have so many hotels compared to Raffles.

"For management, working for an international brand also means better prospects for transfers and growth. But Raffles has announced expansion plans and we are excited to see those."

Raffles International manages eight hotels. It will manage an additional six hotels opening in 2002 and 2003, including the Raffles Resort on Mallorca, Raffles Resort Bali and Merchant Courts in Berlin and London.

Its goal is to add five or six hotels a year to its portfolio.

Most of the senior executives at RI worked with Westin - including Helfer and names such as Jennie Chua, Diana Ee Tan and Richard Ong.

The Westin Plaza & Stamford will be sorely missed within the Starwood network. It is the group's flagship and has a strong profile in the corporate and meetings market.

"On the positive side, hotel companies can occasionally lose contracts and Starwood has grown by 22 percent in the last two years to 72 hotels. We have 12 new hotels under development and we are a company that's continuing to grow," said Shackleton.

It was also not the company's most profitable Westin, he said. Based on EBITDA (earnings before interest, trust, depreciation and amortisation), the Westin Tokyo is the brand's most profitable property.

Shackleton said Starwood's share prices have also been on the rise in recent months and the company is expected to announce second quarter earnings shortly. Nevertheless, there is no denying that the passing of the baton to Raffles will mark the end of a chapter for Westin's history in Asia.

The best and brightest of Westin's talent has passed through its doors - general managers, in order, have been David Paulon, Bill McCreary, David Hayden, Giovanni Angelini, Bernard Agache and now Shackleton.

The first marketing man to put it on the map was the late Steve Maroney, considered by many to be one of the hotel world's best sales person. Maroney took many people through the then-construction site in the early 80s and painted vivid pictures of what this futuristic project would look like, and would do to Singapore's hotel scene.

It transformed the city's landscape in more ways than one.