Kellogg Business Design

Competition 2011: Starwood Hotels

Team:
Calvin Tam
Tyler Evans
Ethan Ambabo
Starwood is luxury hotels

64.7%

% of
revenue from
85.7% hotels
Occupancy Rate
The Problem
Starwood needs to find ways to increase
occupancy without reducing the price it
charges per room.

How?

Find the people who Find the people

travel most frequently. whose loyalty can
be captured.
Opportunities to Highest Volume Business
Capture Loyalty of Usage

Travelers
US Market Size:
$246 Billion
What is business travel?

Business Travel
• Who are the key stakeholders?
• Who is the customer?
• Who is the consumer?
• What are their real needs?

Hotels
“Whenever I arrive in a new city, I fee
completely lost. I don’t know where t
go or how to get anywhere”.
“When I leave the office, I usually just
stay in my hotel room. I feel lonely
going out alone.”

“I want to be comfortable, but having a

life on travel is difficult. The wrong
charges always end up on my expense
report. I don’t want my boss seeing
that.”
“I never bother asking the concierge–
they have no clue what I like. I’d
rather just ask a friend”.

“I want to focus on getting business

done. It’s always planning something,
getting directions. Calling a cab. Help
with this would make me more
productive.

Yet, at a good hotel...

“When I’m inside the hotel. I’m taken care of.”
The Business Travel Routine
 When they arrive, they feel

?
Business travelers see
their journey beginning
in their home city, not
the hotel.
insecure. Business travel is
lonely. They want to
unwind. This is not home.

They want help. They want to be well

They need equipped to do business.
reservations; a cab. Not to have to worry
They’re on a about expense reports.
schedule.
Corporate Travel Planner’s Perspective

“We need to keep costs low.”

“There needs to be better ways to track

expenses. I can’t benchmark.”

“I can’t find ways to encourage

employees to come in under budget.”

“Consolidating receipts, verifying- this

process is too complex.”
 Businesses need to

$
keep costs low,
benchmark, and find
the best deals in a
streamlined way.
What is business travel?

Business Travel

Hotels
 This is a classic two-sided market.

Business Traveler

Travel Planner

$
?
This solution is not unique to the
business travel industry.

Analogies:
Starwood needs to transform itself from a
simple hotel, into an integrated business
travel platform
The Starwood Business Travel Platform consists of 5
new digital experiences that resolve the conflicts in
this 2-sided market.

1. Community Concierge
2. OneCard Solution
3. Unified Expense Report
4. Social Connection
5. Seamless Connectivity
It’s not about spending the money to extend the
hotel’s services all throughout the city, but about
saving money by pulling all of the city’s services
into the hotel.

Starwood
Hotel

Starwood Experience
The New Starwood Platform

Business
Travelers Employers

Transportation Restaurants Entertainment Hotel

The New Starwood Platform

Business Employers
Travelers
Receive: Provide: Receive:
Provide:
Consistency Loyalty (Preferred provider
Consolidated Hosting
Consumer Insight
Amenities status) Spending Controls
Loyalty
Transparency

Starwood
Platform

Local
Businesses
Provide: Receive:
Access Fees Customer Traffic
To Starwood Advertising channels
Consumer insights
1) Community Concierge

A friend-of-a-friend
relationship between the
consumer and local
My Starwood businesses, mediated by
Starwood.
My Itinerary >

Expense Manager
Concierge > allows for easy tracking
S
of per diem, business
W expenses, and budget.
Expense Manager >

Transportation > Book transportation, get

recommendations based on
your tastes, get directions.
Help Desk >
Ask a person for help.
2) OneCard solution
Room card + Charge card + Loyalty card + Discount card

Loyalty Discount
Room Card Charge Card
Card Card

SPG ONE CARD

$
3) Unified Expense Report
Starwood Web Expense Report for:
Joe Smith

$
Travelers and planners can see
12/18 Starbucks $4.08 B
reports in real time. Feedback
12/18 Taxi $25.00 P system helps benchmark,
encourage saving.
12/18 Il Sole $198.08 B
12/19 Walgreen’s $15.01 P
12/19 Taxi $38.00 B
$10.59 Receipts are no longer an issue.
12/19 Roger’s Deli B
Limits are clear. Data collection
drives recommendation engine.
Per Diem Spend: 135.25 / 150.00

Client Development: 753.08 / 500.00

Your saver score: 500 points

4) Social Connection

KaleidESCAPE ™
by Starwood
The Mix is Always Changing!

Get activity alerts

?
Edit Profile Preferences
on your smartphone Login: KaleidESCAPE is a spontaneous,
zero- commitment event club for all
current guests. It organizes simple
activities based on a critical-mass of
Group of 10 or participation. If the activity sounds fun,
more meeting at jump in.
REVO GRILL at
7:30 pm.
Live music starts at
9:30 pm.

Interested No Thanks
5) Seamless Connectivity

A wireless network card that gives people constant

access to the internet, and the hotel’s services,
wherever they are in the city.
 Concept messaging

• Push B2B strategy to

target customers

• Pull strategy to bring

in consumers.
THIS IS YOUR HOTEL
Impact

Increase in occupancy: 1-3%

Expected increase in revenue: $250-$750 million

/ year (5% - 16% increase)
Additional Opportunities

• Gain-sharing of savings created for businesses

• Advertising and promotional tie-ins on
Community Concierge