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Case 7 Teaching Notes WESTIN IN ASIA – DISTRIBUTING HOTEL ROOMS GLOBALLY Jochen Wirtz and Jeannette Ho Pheng Theng Synopsis The three Westin hotels in Singapore, Bangkok and Manila have been enjoying high occupancies and buoyant markets. The economic crisis that hit Asia in mid-1997 however, saw business and ICM arrivals into the three countries declined by some 15% to 25% in 1998. This resulted in a decrease in occupancy rates of approximately 10% to 20%, and average room prices declining rapidly. To compound things, the pre-crisis economic boom had seen a proliferation of five star international hotels in the three cities. Travel management trends in Asia were also undergoing rapid changes. Many of the hotels’ corporate clients were not local companies but multi national corporations (MNCs), that were increasingly centralizing their purchases of travel related services at overseas corporate headquarters. In view of the shrinking market conditions, intense competition and changing travel management trends, the three Westin hotels in Asia have to critically reassess their own marketing and distribution strategies. A new opportunity presented itself in late 1997, when Westin’s parent company, Starwood Hotels Resorts Worldwide Inc., acquired ITT Corporation, making it the largest Hotel and Gaming Company in the world, with over 650 hotels in 73 countries employing more than 150,000 associates. Uppermost in the mind of David Shackleton was the need to leverage on the size and global marketing strength of Starwood, to develop new business for his hotels and gain market share from the competitors. Teaching Objectives This case introduces students primarily to the importance of distribution and marketing strategies, crucial elements in the success of the firm to reach out to its target customers. The teaching objectives of the case are: To highlight the importance of using global distribution channels to reach out to target customers for an international hotel. To unde