Starwood Unveils Franchise Concept

Tomb says the expected costs are $90,000 to $95,000 per key, not including land and with ADR of between $100 and $125. He said so far, there have been 13 express non-binding letters of intent with developers planning 10 hotels each. He expects the hotels to be out of the ground in three years. Starwood will have a "tighter control" over the initial rollout, Tomb says. In total the company expects more than 500 by 2015.

Starwood expects XYZ will create a new category with its urban inspired loft-like guest-rooms, landscaped outdoor space for socializing day and night, and an energetic lounge scene, providing a lifestyle alternative to brands such as Courtyard by Marriott and Hilton Garden Inn. The new franchise was put in place due to demand by developers looking to build a W-inspired product at a lower price point in cities like Raleigh-Durham, Tampa, Minneapolis, Palo Alto, CA and Cambridge, MA. In addition, the Canyon-Johnson Urban Funds, a joint venture between Canyon Capital Realty Advisors and Magic Johnson, have signed an expression of interest to develop XYZ properties in densely populated, ethnically diverse cities such as Los Angeles, Miami, Chicago, New York and San Diego.

At XYZ, guests will have all the comforts of home. Each will feature anywhere from 90 to 180 loft-like guest rooms designed more like a downtown dwelling. Starwood has more than 750 properties in more than 80 countries. Starwood is a fully integrated owner, operator and franchisor of hotels and resorts including: St. Regis, the Luxury Collection, Sheraton, Westin, Four Points by Sheraton, W brands, as well as Starwood Vacation Ownership Inc.