As W Hotels approaches its 20th year, the luxury-lifestyle brand may be going through something akin to a midlife crisis.
Acquired by Marriott International last September along with the rest of Starwood Hotels & Resorts, the W brand continues to add a handful of hotels a year, but it has fallen in guest-satisfaction polls, highlighting what could be an identity issue among both guests and travel agents.
Earlier this month, W fell to last among the nine luxury hotel brands ranked in J.D. Power’s most recent annual North America Hotel Guest Satisfaction Index Study; it had been eighth out of nine last year. While never a strong performer in that poll, W finished as high as sixth out of 10 in the 2013 poll. W also ranked below average in this year’s Harris Equitrend poll of 10 luxury hotel brands after finishing atop that list last year. Meanwhile, Marriott’s Ritz-Carlton and JW Marriott brands tied for the top spot in this year’s J.D. Power poll.
“The W can be somewhat of a polarizing brand,” said Rick Garlick, practice lead, travel and hospitality at J.D. Power. “It’s hip, trendy, cool and dark, and you can walk in there and say, ‘This is not for me.'” Still, both Garlick and Jack Ezon, president of New York-based Ovation Vacations, allowed that the brand has struggled with consistency.
“Within the course of mass expansion, especially into secondary and tertiary markets, the brand standards became inconsistent,” said Ezon. “You need to know your W Hotels.”
Marriott denied that the brand was posing any specific challenges, with Anthony Ingham, W Hotels’ global brand leader, asserting that the brand is “more successful than ever.”
Indeed, W Hotels last year had an average room rate of $351 across the brand, which was about at the midpoint between JW Marriott’s lower-priced hotels and Ritz-Carlton’s more expensive rooms. Still, while Ritz-Carlton and JW Marriott’s North American properties’ revenue per available room advanced about 2% last year, W’s fell 2.5%.
While some of that decline may be attributable to the brand’s exposure to New York, where rates fell as more supply came online, the proliferation of independent lifestyle and boutique hotels could also be affecting W’s room demand, according to Bjorn Hanson, clinical professor at the New York University School of Professional Studies, Preston Robert Tisch Center for Hospitality, Tourism and Sports Management.
“In the last year or so, there have been more introductions of services, tie-ins and themed marketing by independent boutique hotels and even other brands that might make W seem less cutting-edge,” Hanson said.
Spearheaded by former Starwood CEO Barry Sternlicht, W Hotels debuted in 1998 with the reflagging of the old Doral Inn in Manhattan’s Midtown East district and quickly became known for its properties’ vibrant lobby and bar scenes coupled with a modern design approach. The brand has since expanded to more than 50 properties worldwide and plans to add 25 by 2020.
“W Hotels was not originally intended to be a luxury hotel brand, but consumers loved the product, and demand drove the nightly rate up,” said Ingham. “When guests are paying luxury rates, they have luxury expectations — rightfully so — but our guests’ definition of luxury is different.”
To that end, Starwood and its hotel owner partners had been sinking money into the brand before the Marriott acquisition. In 2013, Starwood said about $400 million had been invested across a half-dozen of its Manhattan properties, including the original W New York and two other W properties.
Ingham added that W hotels in Chicago, Seattle and Los Angeles, which he referred to as “generation one” properties, had also recently undergone major renovations.
If any company is up for the challenge of applying branding standards across the board, it’s Marriott, according to Garlick. “Marriott is the ruler of brand consistency,” he added. “They will help tremendously.”
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