Starwood appears to be a well run business when using the metrics of the hospitality industry as the measuring tool.
They do not have excess employees hanging around with nothing to do. Executive and other professional positions are a small percentage of the total number of employees. Most are engaged in facilities maintenance, gardening, housekeeping, food service, and similar lower wage jobs.
They cannot cut the minimum wage that many are paid. It's the law. Minimum is minimum. In fact, overall, you may be surprised to know that Starwood and other branded hospitality companies are extremely efficient at operations management. It is what they do.
I want to start by saying that I have stuck up for Starwood many times in the past and I generally do not make a point of saying negative things about them on this forum. As you know I travel to Starwood's TS's anywhere from 8-12 weeks per year. I spend a lot of time getting to know the employees and observing what is going on. I was also in the hospitality industry for 13 years so I have direct experience in managing lower wage employees while providing proper quality, service, and cleanliness. Based on these facts, here are my comments:
1. Metrics of hospitality industry / productivity- In addition to our TS travel's we spend 4-5 weeks per year traveling to other resorts (Hyatt, Marriott, Hilton, Private Label, etc.). There is an obvious lack of productivity at the Starwood TS's vs. resorts that we visit. At the TS's, I often see the employees standing around chit chatting and not focusing on servicing their guests (this is opposite of what you have stated above but I see it almost every month when I am at a Starwood TS). For this reason, I often find less employees per guest at resorts while the service at the resorts is almost always better. I also do want to say that I have had some great service and there are some wonderful SVO employees.
2. Wages- I have talked to many of the employees at the resorts and most of them are making well over minimum wage. I realize that the servers and bellmen work on tips and thus may receive a lesser wage. The maintenance, security, and housekeeping that I have spoken with are all paid well over minimum wage and more than the going or competitive wage for their position. I have not had conversations with management about what they are paid but with the lack of access to proper information, it is impossible to guage this. The bottom line is that I do not trust Starwood with this when I see them making such poor purchasing decisions (furniture that doesn't wear well), bad construction decisions (showers at WLR), and the excessive rise in MFs.
I will say that Starwood TSs generally (not always) have the worst service that I have experience at any (nicer) TS or resort. We stayed at the Royal Sands in June. I was impressed by the productivity and efficiency of the low wage labor at these resorts. The service levels and attentiveness of the staff was also amazing. The resort was much cleaner and better maintained than any Starwood TS that I have visited. The MFs are about half of what they are at WLR. I know that there might be a few justifyable reasons for some of this but the bottom line is that SVO is poorly managed.
SVO maybe a "business" but it will not be able to survive if they cannot compete with the competition. This is what I see:
1. Reservation system- SVOs is terrible compared to the competition!
2. Decision Making and Communication- SVO has a history of making decisions that are very bad for their customers and that often lack integrity. Then they are terrible at how they communicate these decisions.
3. MF Increases- SVO MFs are much higher than competitors.
4. Service- As I stated above, the service levels are generally worse than we experience elsewhere. I tip very well and treat employees great but I regularly receive and see others receiving less than proper service.
5. Construction Quality- WKORV was much better built than WPROV or WLR. The quality of these newer results is really bad!
We chose SVO for their locations (HRA, WKORV, WLR, and WPORV). I guess that I am almost hoping that SVO is acquired or merged with a company that can properly manage their properties (unless we proceed with selling them all first). The bottom line is that I do not see how SVO can justify their large MF increases given the service levels, competition, and current economy. I see this as a business being run as a bureaucracy and their lack of proper openness and disclosure is part of this. SVO will not stay in business like this for very long before significant changes (buyout, merger, bankruptcy, or bailout) will happen.
Not only is it appalling, it's a terrible business move that slights the company's supposedly best and most "brand loyal" customers.
