Sheraton & St. Regis MD: “The slump hasn’t brought our occupancy down”

Contrary to the market trend, Sheraton Grand Macao Hotel, a brand under Starwood Hotels and Resorts, saw its business in the city post positive growth for 2015, whilst the Group’s newly opened The St. Regis Macao also reached full occupancy for the recent Christmas holiday, according to the Managing Director of the two hotel properties, Ms. Janet McNab. She told Business Daily in an interview that the key for the company to outpace the market is its diversification of products from the get-go – relating to leisure, family-friendliness, and MICE Latest official data shows that both the city’s visitor arrivals and hotel occupancy posted year-on-year declines for last year compared to annual growth for the previous few years. How has the downturn affected Starwood’s two hotel properties here – the Sheraton and St. Regis? It’s interesting that we haven’t felt the downturn in occupancy so much. However, we feel it more in the rates that people are paying. In fact, our cash business is in the best [situation] that it has ever been. I tend to perceive that there are always opportunities when markets change. Meanwhile, Starwood is such a strong company that the distribution channel is so strong. We very much address [the question] as to what we are going to do as a market changes – in order to aggressively meet that challenge. We see that some of our sectors are really positive. But, of course, there are some sectors that we need to sacrifice, which is our daily rates. Our room rates are a little bit less than what they were before. You mentioned at a public event recently that the business performance of Sheraton actually posted annual growth for 2015 amid the city’s downturn… Yes, for some of the segments. What are the factors boosting Sheraton’s growth, in contrast to the general trend of the market? As you look at the company Starwood, we have very good programmes appealing to our MICE customers and our leisure customers. We have very strong retail channels; we have good people and we have good relationships with our customers. That’s why developers signed with Starwood because we have all these things in our toolbox. That’s also why some of our cash segments have performed better than before because we have the relationships and we’re always ready to go. The St. Regis was launched last December. How has the performance been; does it meet your expectations? Sure. As you know, there’s always a ramp-up period in the opening of any hotel. If it comes with 100 per cent [occupancy] from day one, you’re in a very special market place which doesn’t happen anywhere in the world. I think we’ve opened well. We had a fantastic opening event. We had the ballroom filled with 340 people. We had the whole Christmas period running with 100-per cent occupancy. So it’s a real start with fire. For now, it’s just about ramping up and getting the relationships, not just those we enjoy with Sheraton, but also others coming over with St. Regis. That’s the beauty of working in Starwood, as we’re brothers and sisters both working together hand-in-hand. Hence, our interests are in both of the properties. Both of the properties are located on the Cotai Strip, facing competition from nearby hotels plus those on the Peninsula. What are the marketing strategies of Starwood projecting the brands vis-a-vis other operators? One of the things that Sheraton did very well when it opened quite a few years ago was saying ‘yes’ to staying with the gaming business. But we don’t control it. It’s controlled by others. What we did is to come up with a very comprehensive marketing plan [revolving] around the family market, the meetings market, as well as the leisure market. Even though the market has changed, we’ve been doing this since we opened. And I think we’ve done a very good job. The benefits from doing that are now shining on our cash business, compared to the rest of the market. And I think that will continue. In my opinion, the family products will just grow. Meanwhile, with more new competitors coming into the city, it is very good. It’s because what it does is that they give us opportunities to sell Macau as a destination first. After all, you’re competing against many other destinations in Asia. Hence, sell Macau first then fill our own hotels. It has to be a little bit of collaboration amongst all the hotels; not only those on the Cotai Strip but all those on the Macau side as well. We’ll all benefit from that eventually. From what you say, you believe there will be more demand if there’s more supply? However, our annual visitor arrivals still posted drops for last year… That’s only a one-year statistic, right? What goes down must come back up. I’m not a predictor. I can’t predict when it will happen. However, if you have the right strategies, you can attract the market. If you do nothing, you get nothing. With the new ferry terminal opening, coupled with the plans of [LRT] and the bridge to Hong Kong – there are a lot of activities and a lot of things offered for the family market. Consistently, our marketing team must have something to say. For all businesses, competition exists. It’s about how you try to attract the visitors here to this destination, which is the most important thing. There are some new highlights coming to the Cotai Strip this year, there will be new attractions coming, and I think they will bring people in, anyway, which is the good thing. In addition, it’s a good thing for us working with Macao Government Tourism Office (MGTO), and attracting the meeting business to the destination, which is another good segment. MICE boost What are the advantages of developing MICE in the city? The meeting business can fill our restaurants; it can get people to go to the attractions and stay in our hotels. As such, I think it’s very important that we work collaboratively as a destination to attract people and big meetings. There are very few destinations globally that can accommodate one meeting in such a close surrounding with no traffic, which is the key advantage for Macau. For example, just within the Sands Group on the Cotai Strip, there will be 13,000 rooms by the end of this year. Within the Starwood hotels alone, we have some 4,500 rooms. As such, we can certainly accommodate a big piece of business. I met with a very key meeting planner that uses Sheraton and one of the properties on the Cotai Strip. They said that [if you want] an international forum Macau is your only destination in Asia if your event is over 3,000 people as it’s so easy to deal with. I’ve worked in a lot of destinations in Asia and I need to say it’s not that easy in all those [other] places. Price War Many competitors, hotel operators, have released different accommodation packages in order to attract more visitors. Is this one of the strategies of Starwood, as well, amid the economic downturn? It depends on who you are talking to. We don’t want to do that but the market is driving [rates] down. I think this is not a good strategy ultimately. It’s because customers are getting a lot of good value for their money here. But that’s competition, no? You have to [accommodate] the market and to move in the way the market pushes you. At the same time, you need to make sure you’re well differentiated so that customers will choose St. Regis or Sheraton over our competitors. And that’s what we do internally as a team. How do you see the trend for the city’s hotel rates for the rest of the year if competition intensifies? I think 2015 was a quite difficult year because of the change. It has been talked to death and printed to death. I actually think 2016 will be very similar. I don’t think you will see many major decreases or major increases. But I think when all the new supplies come in, in 2017, and depending on what’s happening on the macro-level with the government’s legislation on visas and all that kind of stuff we will see a change. Besides, new supply will probably double the current 12,500 hotel rooms to 24,000 by 2017. Hopefully, I don’t see it taking more dips or dives. Directions How are hotel bookings for the Sheraton and St. Regis for Chinese New Year? Very strong. We’re looking at 100 per cent occupancy over the whole period for both properties – St. Regis and Sheraton. We’re very proud of that. So that means a busy time. It looks like it’s going to be a very positive Year of the Monkey. We hope that good luck will stay close to us! Sheraton has recently updated to Sheraton Grand. What are the directions for the grand hotel as well as St. Regis for this year? We’ve just launched the Sheraton Grand. We opened up another 105 new rooms, 80 of which are suites. The Monkey King [a theatrical acrobatic show based on a Chinese fable] will potentially be launched in June this year. We’re looking to do more packaging and make them more interesting in order to attract more customers with families. We will definitely be looking at that segment and we will definitely be looking at the MICE segment as well. On the other hand, for St. Regis it’s a bit different as it’s a luxury product. We’re building its reputation which may take a bit longer to do. Hence, for St. Regis it’ll be more about communicating to the market that they have choices of these two fantastic brands side by side. For the meeting market, these two properties will work together. They jointly have a total of 21,000 square feet of meeting space. In addition, one planner would be able to enjoy the benefits of both St. Regis and Sheraton, which is fantastic as not many operators can offer this. There are really a lot of exciting things ahead for us this year. You’ve been in Macau for a few months now. What do you think of the city? I like Macau. It’s a very dynamic destination. I worked in Thailand – a place that is really different from Macau. It’s actually quite lucky here as it blends Portuguese culture and Chinese culture. It’s a really dynamic destination that’s got a lot to offer tourists.