Marriott Looks Forward to Sheraton Success [Download Chain Report]

by | Sep 10, 2018 | Chains

Since Marriott acquired Sheraton in 2016, one of the biggest stories in the hospitality industry has been how Marriott plans to revive this ailing and aging brand. We take a look at how Sheraton’s success could mean big money for Marriott.

The Sheraton revival

Much has been made of Marriott’s plans to revitalise Sheraton. Their main strategies in this regard are upgrading and modernising Sheraton’s brand identity and by converting existing underperforming or redundant Sheraton properties into different Marriott brands, such as Courtyard or Four Points. Co-working has been a big part of this new strategy, and Sheraton properties are going to see big changes to their communal spaces, as reported by TOPHOTELNEWS over the summer.

Although Sheraton has proved difficult not only for Marriott but also for Starwood in the past when they were in charge of the brand, Marriott seems to be making inroads into making Sheraton a success. Sheraton is now Marriott’s third biggest brand, and, like it or not, it is in their interest to put every effort into making Sheraton work. Hotel owners have committed to the revamps, and reports from Sheraton Transformation say that the renovation of 444 properties is due to be completed by the end of the year. A spokesperson for Marriott commented that “60 percent of Sheratons globally are committed to undergo renovation by 2020 … We have estimated half a billion dollars committed in investment for renovations by owners in the U.S. alone.”

How Sheraton can succeed

A new research report conducted by Skift analysed three key areas that explore Marriott’s history of successful brand overhaul in an attempt to see how Sheraton could itself succeed. These three areas are RevPAR Index, RevPAR, and Loyalty Contribution to Occupancy. Findings from analysis on the RevPAR Index of Marriott branded hotels that had undergone a revamp in the guest rooms indicated that the RevPAR Index increased by 6.3% in a year following the room overhaul. Entire Marriott properties that have been renovated have seen a 9% increases on the RevPAR Index, Marriott confirmed in June. If this data is extrapolated to include the proposed renovations and upgrades to Sheraton properties, the report estimates that increased revenue to the tune of between $75m and $150m could be returned. Read more on the report here.



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