NEW YORK—The writing was all over the wall in early March. That's when news broke that REIT Chesapeake Lodging Trust had closed on its acquisition of The Royal Palm in Miami. No huge deal; REITs buy hotels with high frequency. What was eye-catching was this line in the release: "The Trust entered into a new franchise agreement with Starwood Hotels & Resorts, where the hotel will be affiliated with Starwood’s new brand for independent hotels."
New brand for independents? Starwood, at the time, hadn't announced anything. Our wheels starting turning, and Hotel Management contacted Starwood for comment on this "new brand." We got hold of a Starwood rep, who would neither confirm or deny anything.
But it didn't take a genius to see what Starwood was doing: launching a soft brand to steer independent hotels into its vast distribution network.
A month later, it's confirmed. Starwood has formally launched Tribute Portfolio, a soft brand focused on the upper-upscale independent hotel space. The 10th brand for Starwood is a sort of sister brand to Luxury Collection, Starwood's soft brand for luxury independent hotels.
Under the agreements, Starwood will get about 10 percent of a hotel’s room revenue.
The brand's tagline is "Stay Independent," and beyond Miami's Royal Palm, properties are reportedly to follow in Asheville, N.C., Nashville, Tenn., Savannah, Ga., and Charleston, S.C.
The goal: 100 Tribute Portfolio hotels by 2020.
In a release, Starwood CEO Adam Aron (pictured) said, "With Starwood’s history of brand innovation, design leadership and our leading global high-end footprint, we believe Tribute Portfolio will be an exciting solution for hotel owners of distinct properties who wish to maintain their independent spirit, yet benefit from Starwood’s powerful distribution, loyalty and sales platforms."
And that's really the benefit of a soft brand: it allows owners of independent hotels to stay indie but plug into the vast and far-reaching global reservations systems of large hotel companies.
Tribute Portfolio joins a slew of other soft brands that have been introduced in recent years. From Marriott's Autograph Collection and Choice's Ascend Collection, to Best Western's BW Premier Collection and Hilton's Curio. Expect soft brands to come from the likes of IHG and Hyatt.
Tribute Portfolio certainly is going after a large untapped inventory of independent hotels in the U.S. and abroad. According to their numbers, nearly 50p percent of upper-upscale hotels in the U.S. are independent, and 60 percent of four-star hotels globally are not affiliated with a brand flag.
The brand is also a new option for Starwood SPG members to collect points and new experiences. According to a recent survey of SPG members conducted by Communispace in the SPG Advisory Community, 89 percent said they are interested in staying in independent hotels. Additionally, nearly 70 percent of members said they have already stayed at an un-branded hotel property, representing a strong opportunity for the company.
After Royal Palm, here's the list of hotels we have, now, that will be affiliated with Tribute.
In Asheville, the BB&T Bank building will be converted into a hotel and open in 2017 as the Vandre Nouveau Hotel, a Tribute Portfolio Hotel. The property is a partnership between McKibbon Hotel Group and Tower Associates and will include 150 guestrooms.
Starwood is also working with Rockbridge to open three Tribute Portfolio hotels. Debuting in 2016, the Noel Place Hotel in the Printers Alley area of downtown Nashville will undergo a renovation and feature 166 guestrooms. Also slated to open in 2016, a new-build hotel in Savannah with 173 guestrooms. Then, in 2017, Tribute Portfolio will debut in Charleston with a 100-guestroom hotel.