Our new Starlab has huge ROI—McAveety, Starwood’s brand chief

Posted: December 7, 2014 in general

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Starwood chief brand officer, McAveety

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For Phil McAveety, executive vice president and chief brand officer for Starwood Hotels & Resorts Worldwide,s the 200 people who brainstorm in the company’s newly opened brand, design and digital innovation office in New York City are all about unlocking potential.
Starlab is a design-led incubator that looks and feels like a start-up digital hospitality company. The workspaces are next-generation and the trappings inspirational with art, mood boards and a social-media ticker displaying the latest tweets from the company’s nine hotel brands.
The 46,000-square-foot (4,274-square-meter) facility will act as a lab to, for example, pioneer technology such as a mobile phone app that unlocks guestrooms. The assembled team in Manhattan is charged with pushing the boundaries of how high-tech merges with a high-touch business, and McAveety, who has been with Starwood for almost seven years after spending several years in the advertising world, is charged with leading the team and proving an ROI for this significant investment that gives Starwood a space to show off and entertain developers, marketing partners and designers in the heart of New York City.

Starwood spent about US$12 million fitting the 46,000-square-foot (4,274-square-meter) space.

HOTELS received a sneak peek of the work space in early November just as the team was moving into the building and sat down with McAveety to discuss the opportunities, challenges and plans of the newly assembled team.

What is the expectation from the corporate office for this space?

There are internal and external benefits. The internal benefits are the digital talent, design talent; we’re not competing with the other hotel companies. We’re competing with a whole gamut of businesses looking for similar skill sets. So from an attraction and a retention perspective having a space in Manhattan for a lot of the creative folks, they’re living in Manhattan, Brooklyn, Hoboken. For us to get them and keep them — that in itself has an ROI because recruitment is not cheap.
Beyond that it’s also creating an environment that encourages creativity and makes people feel connected to the spirit of the brands.
Then from an external perspective, when we bring in owners, developers and potential brand partners we can show them what we stand for with rooms dedicated to each of our upscale and luxury brands. These spaces are a representation of our hotels.

Can you talk about the investment in this space?

A little over US$12 million in the infrastructure. … We didn’t buy the real estate. We’re on a long-term lease.

How are you going to measure the investment?

There’s intangible and tangible. I don’t think because we spent US$12 million therefore what we want is a specific return in a certain period of time. But I think a large part of it will be our ability to attract and retain staff.
We don’t have hard ROI goals against this space because we do believe that with lifestyle brands there needs to be a balance between head and heart. Of course, we’re respectful that this has to drive business, but we’re not saying within 12 months we want to have signed 14 new deals and 10 new brand partnerships.
The brand management team needs to be as accountable to the business delivery as any other area, but we want to make sure that we’re finding metrics that make sense.

“My sense is by creating an environment where they can actually work together and play off each other in real time I think we’re going to see a lot more agility in creation and decision making, and hopefully we can then also excite our owners because ultimately this stuff only comes to life in the hotels.” — Phil McAveety

What is your favorite space here, or what’s the most important part of this development?

I oversee the whole brand-management function so I love all my children equally. For me it is the sense of inspiration. It’s not that these functions weren’t working together anyway. But my sense is by creating an environment where they can actually work together and play off each other in real time I think we’re going to see a lot more agility in creation and decision making, and hopefully we can then also excite our owners because ultimately this stuff only comes to life in the hotels. So this is about exciting our ownership community, and they do get excited.
On the partner front it is actually even more helpful because you bring in music partners, fashion partners, lifestyle partners. They feel these are brands that resonate with us. We’re kind of like kindred spirits. It makes sense for us to work together.
We benefit from the fact that actually the hotel business has a lot to offer. It’s a sexy business. People love to be in and around hotels. So, creating an environment where we can talk about the brands where they’re actually feeling it has a lot of value.
The biggest challenge we have is there are so many [Starwood] people who want to use this space. But that’s good. I actually like the energy.

What are the challenges of incorporating the various teams in this space — digital, design, brand, and so on?

The big leap is actually integrating our design brand and digital teams because our digital team was somewhat separate. We’ve added a huge amount of resources to our digital and technology teams over the last several years to the point where we actually didn’t have anywhere to house them. They were in temporary offices. So now we have brought them together.
To be clear, we still have a pretty strong design and digital presence in Stamford, Connecticut (the corporate office). We’re actually working between the two spaces. This gives us optionality, which I think really, really helps. I always say that New York City is one of the capitals of design and innovation. And you know what? If you have corporate offices somewhere in this neighborhood it doesn’t really make sense for you not to take advantage of the talent that’s available.

What is the sales and marketing component in this building?

Our luxury brand teams are here, and they oversee all aspects of marketing. Our direct sales office is located in a different area, but they interact very closely.
But marketing strategy comes out of this office?

Strategy, media and communications. We do have something of a demarcation between sales and marketing. Brand management as opposed to marketing is a necessary and different skill than sales, so thinking about creating the experience, communicating the experience and taking the message and driving training and understanding is what the team here is doing.

Among the inspirational spaces at Starlab is the library.

How dramatic of a shift has the media-marketing strategy made since everything has gone digital?

There has been a really dramatic change in the last decade, but it’s almost like watching a kid grow. We’ve been living it so we haven’t really noticed how dramatic the change has been.
We still do some print promotion — it’s really image placement and relationship driving as opposed to we really think we’re going to be in a driving business tomorrow. It’s really about storytelling — which platforms, which mediums can you best tell your story in? And they need to be stories that people are interested in.
But one of the things we want to not lose sight of is that sometimes you can get so excited and blinded by the great new app, the great new functionality, that it actually becomes what you do. Guests don’t stay at an app. If an app or a piece of digital functionality can improve and enhance a stay, great. But we don’t like funky stuff for funky stuff’s sake.
The guest experience is at the center the role of this team here. We think about all of the touchpoints, and your price of entry still is delivering the fundamentals.
Increasingly, we think one of the fundamentals is making sure we’re connected because people want to be connected. But we think about how we activate the physical spaces, how technology intersects to increase the experience and how we really drive service delivery. Without the fundamentals you don’t get that. And now we’re moving to how do we use our knowledge about our guests? How do we use big data to really personalize the experience?
When we talk about personalization sometimes we forget that there are certain human truths and human needs that are there and don’t change. The oldest hotel in our system is the Hotel Goldener Hirsch in Salzburg, Austria. It opened in 1407. The general manager’s office is on the first floor, and they actually built a tunnel from his office that looked over the front desk. So when guests arrived he’d see them and step out to welcome them.
Whether it was 1407 or 2014 there’s nothing nicer than going to your favorite restaurant or bar and they greet you by name and they make sure you feel comfortable.
We started thinking that a lot of these digital platforms are really just the 21st-century version of that tunnel. We want to leverage what technology can do for us but not lose sight of the fact that we’re delivering an overall experience.

This is among the many mood boards found around the Starlab office

So where do you take this space from here?
McAveety: For now we’re going to allow this one to bed in. Clearly our business is very, very global, so we want to use this resource very closely with our Asia Pacific hubs in Shanghai and Singapore, with Brussels for Europe and Miami for Latin America.
We all think sometimes that the whole world is getting closer together, which it is. But there are incredible nuances, whether it’s in terms of the hardware that people prefer to use in different parts of the world and even the social-media platforms.

Are you creating any satellite Starlab offices?
McAveety: We have design hubs in Shanghai and Singapore and in Brussels, which are really about the execution of the hotels. We have architects, interior designers and project managers who are going to work very closely with this office. So our brand design team, which is led by Mike Tidey and created this space, works directly with the brand design leads and the architectural design leads in Shanghai, Singapore and Brussels. For Latin America again it’s Miami. We work out of here as well.

Interview courtesy: Hotels.com

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