Spangler Auditorium filled quickly last Wednesday with students eager to hear Starwood Hotels & Resorts CEO Frits van Paasschen talk about “The Age of Great Change,” hosted by the Hospitality & Travel Industry Club.
Prior to his role at Starwood, van Paasschen held several executive positions across various functions at national brand-led corporations like Nike Inc. and Coors Brewing Company. An HBS alumnus from 1988, he started the session by reminiscing about his days as an MBA student in an era when “Spangler was a student, not a building.”
Over the last five years, van Paasschen has successfully led Starwood in expanding its brand globally, furthering its digital dominance, and increasing its market share of “rising wealth around the world.”
A marketer at his core, van Paasschen argued that “brand loyalty is our most important asset.”
Starwood has been exporting and adapting its brand rapidly outside of North America, with more than 80% of its new hotel openings being in emerging markets. Inline with the globalization phenomenon, China and India are leading in terms of new member growth.
The company has additionally taken major steps to stay ahead of its competitors in the digital space. Helped by the fact that there are almost as many cell phones as people on the planet, Starwood’s mobile applications saw a 300% increase in traffic and revenue between 2010 and 2011,.
Starwood is now taking steps to get ahead of competitors with personalized recommendations for guests by leveraging digital tools like social media. In the evolution of brands since the Industrial Revolution from representing “reliability” to “personality” to “purpose”, the company sees “personalization” as the next direction.
van Paasschen also spoke of the opportunity to capitalize on increasing wealth as well as a growing middle class, which he states will grow from 2 billion to 5 billion people by 2030. Factors like urbanization and expanding airline fleets in many parts of the world are making now “a good time to be in the travel business.”
The opportunity to capture increasing luxury travel demand is tightly linked to the company’s globalization efforts, and supported by the fact that Asia now has more millionaires than anywhere else in the world.
While van Paasschen claimed he would “not joke about you sleeping with us,” he concluded with a series of photos of some of the amazing properties Starwood has recently built all over the world.
“I’ll hazard a guess that most of you will travel a lot,” he said, and encouraged students to consider Starwood for future travel. Of course, it didn’t hurt that students attending the presentation were given “Gold” status to the Starwood Preferred Guest program.
van Paasschen was accompanied by seven other Starwood executives, all HBS alumni leading a range of diverse groups from M&A to hotel operations. He discussed the value of an HBS degree in the hospitality industry and how the leadership learned here is complementary in nature to working with those with more hospitality-related backgrounds.
“This is a great time to be at HBS,” van Paasschen commented, “and a lack of experience is now not as much of a liability.” In an era of great change and innovation, van Paasschen inspired students with a hopeful note for the future.