Starwood Quietly Restructures Sales Force

Early last Wednesday, White Plains, N.Y.-based Starwood Hotels & Resorts Worldwide held its 2010 Investor Day in New York City and outlined the company's initiatives through 2013. As I listened in on the hour-long webcast, it seemed the usual round up of talking points: Own less and manage more, accelerate growth prospects in Asia and Latin America, and continue the focus on driving rate to rebound revenues and increase profit margins. Nothing new there. That is, until the topic turned to the company's new Sales Force Optimization Initiative, when suddenly this gem (which never even garnered so much as a footnote in any of this year's quarterly earnings reports) was casually dropped: It turns out that in the past several months Starwood has been quietly piloting a new selling strategy in the Atlanta market (where it has 15 properties) with very encouraging results. In short, the company is eliminating many individual, on-property sales positions in favor of regional teams known as "metro market sales clusters," which will sell across all of the company's brands.

"It has really been a cutting-edge initiative, which will give us the ability to out-perform our competitors," said Denise Coll, North America division president at Starwood in describing the company's new approach. "We have created an above-property sales team -- a single point of contact when buying in any individual metro market. Our priority is to ensure we are selling in a way that the customer wants to buy." According to Coll, the new sales structure has allowed Starwood to eliminate redundant sales efforts and redeploy those efforts to under-served markets. What's more, she said, the initial results have been so encouraging -- volume from large corporate accounts has increased by as much as 20 percent in the Atlanta market since implementation of the new sales program -- that Starwood plans to have metro clusters in place in at least 10 North American markets by year-end 2011, including New York City (where it currently has 35 properties), Boston (where it has 18) and Scottsdale (14).

If this strategy sounds familiar, it should. In 2007, following a two-year reorganization effort led by David Marriott, Marriott International rolled out a similar program when it eliminated many on-property sales positions and redeployed its national sales force to act as primary points of contact, selling across all brands, from extended-stay to its luxury Ritz-Carlton brand. And Marriott was met with resistance from many meeting planners, who voiced their frustration at the global giant for sacrificing the time-honored, one-on-one client relationship in favor of streamlining operations. How planners react to Starwood's new selling approach, says a longtime former Starwood executive, will depend on just how closely they have been paying attention to the chain's back-office maneuvers. "Starwood is being careful to not make this look like Marriott's blundering attempt to consolidate national sales. But, that's exactly what it is. I'm sure customers will see through this. Or will they?"