Design Hotels to become ‘the 11th Starwood brand’ – adds great London options

Design Hotels is a marketing alliance for 280 design-led, modern hotels around the world.  It operates in a similar way to Leading Hotels of the World, allowing independent properties to gain access to a central marketing and reservation system.

In the UK, for example, it represents high-end hotels such as Blakes, Boundary (the Terence Conran hotel in Shoreditch), all of the Firmdale properties (Ham Yard etc), South Place and The Town Hall Hotel.

It is fair to say that I would be willing to stay at any of them.

What I didn’t know is that Starwood has been the majority investor in Design Hotels since 2011, albeit on an arms length basis.  That is now going to change.

Design Hotels is going to become the 11th Starwood brand, sitting alongside Sheraton, Westin, W etc.  This has the power to be transformational – it would take Starwood from, in effect, a bit of a joke in the UK to the chain with the most attractive high-end hotel portfolio.

The details have yet to be ironed out but Starwood has been releasing some information to investors.  This appears to be what will happen:

All Design Hotels properties will be invited to become part of the SPG ‘system’

They would be obliged to take part in Starwood Preferred Guest, both for earning and burning, and to recognise SPG elite member benefits

The hotels will be bookable via spg.com

The Design Hotels brand will remain

Some things are not clear.

It is very unlikely that all of the Design Hotels properties will want a closer relationship with Starwood.  Design Hotels does not have a loyalty scheme and there will be many properties who are fundamentally against the idea of treating certain guests differently due to their status.

The Starwood ‘last room availability’ guarantee for rewards will also cause problems for some – SPG hotels are obliged to make rooms available for redemption as long as they still have cash rooms available for sale.

What will happen to those hotels which do not want to join SPG?  Will Starwood agree to list of all of the hotels whilst allowing some to opt out of SPG (a handful of hotels already do this)?  Alternatively, will hotels who refuse see their Design Hotels membership terminated?  Will we see a breakaway grouping of hotels emerge?

The ‘hands off’ model of hotel branding has become hugely fashionable in recent years.  Marriott has Autograph.  Hilton has Curio.  Starwood has Tribute.  All three chains comprise independent, generally luxurious, hotels which refuse to sign up to ‘brand standards’ but who are increasingly happy to pay a fee in return for access to a huge base of loyalty programme members.

The response of the Design Hotels membership to the helping hand being offered by Starwood will be a good proxy for how far this trend will eventually go.

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