Starwood Hotels & Resorts Worldwide Inc. (HOT:US) is leading a $350 million plan to renovate Sheraton hotels, its largest brand, in cities from New York to Beijing in a bid to lure more travelers seeking high-end lodging.
The work includes the $160 million makeover of the Sheraton New York Hotel & Towers, which involved room expansions and a new air-conditioning system and is the costliest remodel of an individual property, said Hoyt Harper, senior vice president at Starwood’s Sheraton unit. The remodel is scheduled for completion at the end of this month. As much as $60 million is being spent on the Great Wall Sheraton Hotel Beijing, and $30 million to $40 million will be used to renovate the Sheraton Rio Hotel & Resort, Harper said.
Starwood, the Stamford, Connecticut-based hotelier that also operates the luxury St. Regis and W brands, and owners of Sheraton properties have already spent $6 billion in makeovers and expansion over three years starting in September 2008. They are expecting the additional improvements, which include updating fitness facilities and lobbies, to increase demand at Sheraton hotels, Harper said.
“By raising the quality and consistency of Sheraton hotels, we expect to gain more high-end business and leisure travelers,” Harper said in a telephone interview from London.
The “overwhelming majority” of both the $6 billion investment and the extra $350 million was contributed by the owners of the hotels Starwood operates, Harper said. An additional $5 billion that’s lined up for the development of 104 Sheraton hotels over the next three years is completely “other people’s money” rather than Starwood’s, he said.
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