Despite Marriott Merger, Starwood Isn’t Easing Up on Element Hotel Rollouts

When Starwood Hotels and Resorts debuted Element hotels back in 2008, it was marketed primarily as a lifestyle-driven, eco-friendly, extended stay brand, just before an industry-wide sustainability movement took hold. Eight years forward, those core brand elements remain, and the brand’s global footprint continues to grow, despite — or perhaps propelled by — Starwood’s upcoming merger with Marriott International.

Today, there are a total of 22 Element hotels worldwide. By 2018, that number nearly triple to 46. Over the next two years, 22 new Element hotels are scheduled to open in the U.S. and Canada alone, doubling the brand’s current North American portfolio. In the past 12 months, six North American properties opened, and on April 14, the second European Element hotel opened in Amsterdam. Five of the upcoming opening will be dual-branded hotel developments with both the Element and Aloft brands.

So, what’s driving this rapid expansion for this eco-wise extended stay brand? Paige Francis, Starwood’s vice president of global brand management, said Element’s unique positioning as a lifestyle-driven select-service brand has added to its appeal both with travelers and hotel developers.

“Travelers in the select-service category today are looking for more of a lifestyle offering and democratization in design,” she said. “That’s what propelled us to launch these brands [Element and sister brand, Aloft] into this space. Great design had become more affordable and accessible in other areas like fast fashion, for example, but not in the hospitality space at the time. The demand for a great lifestyle offering in this space has been really high, and we continue to see that.”

Whereby Element originally drew inspiration from its Starwood sister brand, Westin, Aloft’s design was influenced by W Hotels, said Francis. Dual-branded properties with Element and Starwood, she said, offer complementary experiences to travelers. “They really fit side by side perfectly in many markets, and that’s what you’re seeing—both stand on their own. Developers see that and choose to build both side by side to expand their offerings in the marketplace with two very unique brands.”

The select-service category remains incredibly strong in the U.S. especially. According to STR’s 2015 Census Database for the U.S., the select-service segment alone accounted for more than two-thirds of all hotels currently in construction in the U.S.

It also probably helps that Marriott CEO Arne Sorenson has repeatedly noted the importance of the Element brand to the combined Marriott-Starwood portfolio once the merger closes this year.

During an investor call on March 21, Sorenson said, “With Element, we have a lifestyle extended stay brand which is a space where Marriott has no brands. We think that as a consequence, this will be a brand that we think will grow quite quickly post merger. We also think Element could be an interesting alternative to some of the housing rental services or shared economy platforms like Airbnrb and some others.”

“I think Marriott is definitely excited about the Element brand because of that space it occupies,” Francis said. “They have the Residence Inn by Marriott, but this is a very different offering. What we’ve built, and combined with the power of Marriott, will continue to propel our brand in the future.”

Some of the Element properties opening in the next few years include Element Dar Es Salaam (January 2017); Element Dallas Love Field (February 2017); Element Austin Downtown (August 2017); and Element London Tobacco Dock (September 2017).

Beyond the merger, it’s clear Starwood will continue to expand its collection of Element properties. “We’re not slowing down at all,” Francis said. “It’s an exciting time, and even before the merger, the brand has really taken off. There’s a tremendous amount of momentum behind it right now and for us, it’s still business as usual.”