Don't know if you've noticed it, but we definitely see a trend: Merger or not, Starwood isn't letting up on its brand development investments anytime soon. It'll be interesting to see how much it can differentiate a legacy brand like Le Meridien when positioned against Marriott's Renaissance Hotels or AC Hotels brands.
Thanks to a brand reinvention project initiated by Starwood three years ago, Le Meridien is embarking on more ambitious expansion plans and reinvestments in its existing properties that total more than $300 million, including the renovation of Le Meridien Etoile in Paris, the brand’s very first property. That investment is largely being driven by its hotel owners, as well as Starwood management’s investments in marketing, loyalty, and technology.
In the past three years, the brand has grow in North America and Asia Pacific by nearly 25% and more than 50% of its properties in Europe and the Middle East have been renovated. Today, there are more than 100 Le Meridien hotels around the world in 37 different countries — more than the higher profile sister brand W Hotels — and over the next four years 30 more are slated to join the collection.
“Starwood acquired [Le Meridien] as a growth vehicle, but we didn’t really see that growth until we did the repositioning,” said Brian Povinelli, global brand leader for Le Meridien, as well as for Starwood’s Westin brand. “With the repositioning around ‘Destination Unlocked,’ there was a much clearer proposition for the brand positioning. Owners saw a chance to create a niche in the marketplace and return the types of returns they were looking for, and it’s unique to see this kind of growth in the upper upscale segment.”
Povinelli said that with the new positioning, new Le Meridien hotels saw 10% increases in market share within the the first two years of being converted or opening.
Can Le Meridien’s Brand Positioning Withstand the Merger with Marriott?
Povinelli says Le Meridien’s positioning is built on the macrotrend of exploring a destination.
“How do we define a lane within arguably what’s already a crowded segment of the industry and provide an experience that is different from the competition in a way that we believe would generate greater returns on our owners’ investments?,” he said. “So we built the brand off a global consumer insight inherent in travel — that people want to explore the destination.”
He said Le Meridien focused on that concept of exploration through sophisticated design, lobbies that served as coffeehouses by day and lounges by night, and signature food experiences, all based on three core concepts: culture, cuisine, and coordinates (in a nod to the hotel’s namesake, referencing geographic coordinates). Povinelli also said consumers can expect to see more programming related to meetings and weddings going forward as well.
But will it be enough to differentiate Le Meridien from Marriott’s brands with similar brand messages? It’s anyone’s guess, but Povinelli is confident Le Meridien will continue to flourish and coexist with all of the brands under the combined Marriott and Starwood.
When asked, for example, if there are similarities between Starwood’s Le Meridien and Marriott’s Renaissance brands, Povinelli said, “If you look at those two brands specifically, you see very little overlap in footprint — it’s less than 20% I believe. So there are lots of opportunities for either brand to come into different markets, and there are pretty big differences in the way both brands express their individual lifestyle positioning. I think they can complement each other.”
Povinelli’s statements are similar to ones made by other Starwood executives speaking about the company’s significant investments and expansion plans for Tribute Collection, a soft brand collection, and the Element and Aloft brands.
What’s Next for Le Meridien
While the brand has doubled its portfolio within the last several years, Povinelli sees tremendous growth opportunities for Le Meridien within North America, where it currently only has 22 properties.
“It’s, in essence, a new product to this continent, and I think there’s a lot of upside,” he said. “A lot of key cities are already saturated with other brands so where there are opportunities for new upper upscale product, we provide great opportunities for owners.”
The second region where he sees future growth for the brand is in Asia because of the brand’s “natural fit” with emerging destinations such as Bhutan where there are currently two Le Meridien hotels, for example.
The significant amount of investment being put forth by Le Meridien hotel owners, Povinelli added, will only continue to accelerate the brand’s momentum.
The multi-million-dollar renovation of Le Meridien Etoile is expected to be complete by September and by the end of this year, the Visconti Palace Hotel in Italy will become Le Meridien Visconti Rome, following a $20-million conversion.
New properties in Saudi Arabia, Georgia, China, India, and Malaysia are expected to open with in the next two years, and new Le Meridien hotels are also coming to Fort Lauderdale, Denver, and Houston in 2017.
Subscribe to Skift Pro
Subscribe to Skift Pro to get unlimited access to stories like these ($30/month)Subscribe Now
Photo Credit: A rendering of a guest room from Le Méridien Visconti Rome, which is expected to open by the end of this year following a $20-million conversion and renovation. Le Meridien/Starwood Hotels & Resorts
U.S. Hotel Performance Slips While China Roars Back to Life
The U.S. and China are riding a hotel performance see-saw where one goes up as the other comes down. But travel analysts and executives are downplaying the notion the Delta variant is going to lead to a travel doomsday scenario over the fall and winter.
Cameron Sperance | 2 days ago
Marriott’s Post-Pandemic Growth Story Is Outside the U.S.
A cooled-off construction market for hotels in the U.S. gives owners an opportunity to charge even higher rates during the recovery thanks to less supply in the market. But Marriott needs to show shareholders signs of growth. Hello, Asia and Europe.
Cameron Sperance, Skift | 5 days ago
Europe’s Hotels Will Wait Until at Least 2025 for Full Return of International Business Guests
Be wary of everybody’s favorite word at the moment: pent-up demand. Your typical leisure traveler can book a trip and pack their bag in minutes, but companies will keep employees on a tight leash for years to come.
Matthew Parsons, Skift | 6 days ago