Starwood Ramps up Build of Element Hotels Extended-Stay Brand

The new Element Frankfurt Hotel officially opened this month near the city’s airport, making this the first non-U.S. destination for Starwood Hotels’ sustainable “eco-wise” extended-stay brand.

Element Hotels is one of Starwood’s three select service brands, which together make up almost 50% of the hotel group’s development pipeline across all nine flags. With only 14 hotels in operation since the brand launched in 2008, Element’s room count trails far behind Four Points by Sheraton, which opened its 200th property this year, and Aloft Hotels, scheduled to open its 100th hotel in 2015. Aloft also launched in 2008.

However, Starwood is planning to more than double the present Element inventory with 16 new hotels scheduled to open by the end of 2017, including new assets in Suzhou and Zhangjiakou (bordering Shanghai and Beijing), three in Canada, and one each in London and Amsterdam. New locations include both urban core and airport/business park environments situated in first and second tier cities ranging from Boston to Bozeman.

According to Brian McGuinness, senior vice president of Starwood’s specialty select brands, one of the reasons for Element’s more relaxed rollout is because all Element Hotels are required to be U.S. Green Building Council LEED certified, which can be even more tricky in international markets where a LEED equivalent must be obtained.

Also, in order for Element to scale globally and adapt to a wide range of market conditions, a lot of operational processes revolving around sustainability have had to be fine-tuned repeatedly to deliver a cost-effective guest experience.

“The global customer isn’t ready to pay a premium for sustainable practices at a hotel, because they fundamentally believe the hotels save money doing such things, but the reality is that’s not necessarily the case,” says McGuinness. “So we have to balance out our sustainable initiatives with a great customer experience.”

As an example of not achieving that balance, McGuinness references the Seinfeld episode where Kramer can’t get the shampoo out of his hair due to a low flow fixture. “We absolutely have to avoid that while pushing the envelope in sustainable operations at the same time,” he says, which includes everything from low VOC paints to recycled cushion filler and carpet backing.

With a move beyond U.S. borders, that recycling spirit also includes shifting development into adaptive re-use projects of both historic and modern structures, especially in first tier locations. New development is often prohibitive in Europe’s major cities, so that again brings a whole new set of requirements pertaining to LEED-similar Existing Building certification. One of the first adaptive reuse projects is going to be the new Element Amsterdam opening in November 2015, owned by the same group controlling Frankfurt.

Starwood Brand Positioning

In terms of Element’s brand positioning, all three of Starwood’s select service brands are aligned with three other Starwood full-service brands. Four Points shares Sheraton Hotels’ business travel DNA; Aloft was inspired by W Hotels’ music, art and fashion sensibilities; and Element channels Westin Hotels’ sense of wellness and serenity.

Another way of describing each brand’s identity, McGuinness says Four Points is like a good beer, Aloft is a trendy cocktail, and Element is like a nice glass of affordably priced New World wine.

Element Hotels’ signature in-room product includes a Westin Heavenly Bed and small full kitchens for extended-stay guests. They’re good for cereal and a boiled egg at breakfast, or making a bowl of pasta in the evening, or guests can access the grab-and-go RISE breakfasts in the lobbies.

Elements didn’t originally have bars or restaurants, but that is beginning to change based on demand and individual markets. Frankfurt, for example, required a 3-meal per day outlet. For drinks during multiple nights of the week, Element offers a rolling “Salon Bar” in addition to RELAX wine hour events.

Other brand standards include free WiFi and free bike rentals, the latter of which ties into Element’s “eco-wise” philosophy. McGuinness says the brand positioning around sustainability is a primary business driver, which he anticipates will become more prevalent as Element expands internationally and a younger consumer base begins to demand green accommodations more and more.

How much of a business driver remains to be seen. McGuinness likens the demand for green hotels to the “bed wars” following the introduction of the Westin Heavenly Bed. At the time, the premium bed and the marketing around it were viewed as innovative product and advertising differentiators for a niche customer. Whereas today, a good night’s sleep and white linens are considered standard in most upper mid-market hotels.

On the marketing side, as of now, Element doesn’t have nearly the level of content marketing promotion as many of the other Starwood brands to adequately push the sustainability and smart design storytelling, but that too is going to ramp up in the future.

“The work with LEED certification is now coming to bear where we’re very confident in the operations, we’re very confident that we’re building these hotels green from the ground up, and they’re high performing buildings,” says McGuinness. “So we’re now very confident in the proof points of the guest experience to do that type of marketing.”

Strategic Future Development

Looking ahead on the international stage, Frankfurt and Suzhou were both chosen for their strategic locations to help spur further development. This is where there are some potentially interesting brand communication opportunities targeting the sustainable/smart city enthusiast with more than statistics about potable water saved annually.

Frankfurt Airport’s business park is anchored by THE SQUAIRE complex, which is positioned as a next generation knowledge sharing hub for business executives, with an interesting array of neighbors like the House of Logistics & Mobility think tank.

In China, the Element Suzhou Science & Technology Town will be located five minutes from Suzhou’s new high-tech district named Science & Technology Town, which was purpose built as a smart city to attract foreign investment as an easy alternative base to Shanghai.

So each of the destinations offer some interesting storylines for the business traveler of the future where the Element properties could play a central role.

Also, as first-time gateway cities in Europe and China for the Element brand, both the Frankfurt and Suzhou properties are convenient for potential clients and partners to get a better understanding of Element within the context of their own backyard. In essence, these are basically “billboard” properties designed to sell the Element business model.

“This is a tangible moment for the brand where we can fly in potential developers to Frankfurt, for example, and within five minutes have them at the hotel to experience the brand,” says McGuinness. “Suzhou is also a great story for Element Hotels, accessible via high speed bullet train in and out of Shanghai…. We have seen when we get into key destinations in gateway cities that development spikes with our ability to give a tangible visit to our potential owners and developers.”

Element Hotels Opening Pipeline

• Element Vancouver Metrotown – Opening January 1, 2015
• Element Fargo – Opening February 12, 2015
• Element Suzhou Science & Technology Town – Opening May 21, 2015
• Element Miami Doral – Opening June 25, 2015
• Element Amsterdam – Opening November 2015
• Element Boston Waterfront – Opening Q4 2015
• Element Basalt Aspen Valley – Opening Q3 2016
• Element Calgary Airport South – Opening Q3 2016
• Element Edmonton West – Opening Q3 2016
• Element Orlando – Opening Q3 2016
• Element Orlando North – Opening Q3 2016
• Element London Tobacco Dock – Opening Q4 2016
• Element Moline – Opening Q1 2017
• Element Columbus – Opening Q1 2017
• Element Gainesville – University – Opening Q1 2017
• Element Charleston Historic Downtown – Opening Q2 2017
• Element Chongli – Opening Q3 2017
• Element Syracuse Inner Harbor – Opening Q1 2018

Greg Oates covers tourism and hospitality development. Email him at [email protected].