Barry Sternlicht: Revenge of the Hotel King

Revenge of the
Hotel King

Barry Sternlicht revolutionized the hotel world as he built Starwood into an $12.4 billion empire. Now he has to prove himself again. But will he ever satisfy his harshest critic?

Condé Nast Portfolio
October 2007 issue

By Daniel Roth

Barry Sternlicht’s chauffeur-driven black G.M.C. Yukon rolls up to a crumbling brick building on the wrong side of the Stamford, Connecticut, train tracks. It’s a warm fall morning, and a nearby field of dumpsters casts a rank smell over the block. The site was a heavily used auditorium and dental clinic for workers at the Yale & Towne lock factory. When the plant closed in the late 1950s, the building started its inexorable decline: The windows are blacked out or broken; the front-door frame is stripped and exposed; inside, wires hang from where lighting fixtures have been ripped down. But for the next few months, this littered wreck is going to be the unlikeliest launching point for the greatest second act in American real estate.

Sternlicht is the 46-year-old founder, former C.E.O., and ex-chairman of Starwood Hotels. Just two years ago, he was the most influential person in the hotel world, commanding one of the industry’s largest operations: 733 hotels, 231,000 rooms, 120,000 employees and more than $5 billion in revenue. Starting with a small, nearly bankrupt real estate investment trust he bought in the mid-1990s for $120 million, Sternlicht gobbled up name brands like Sheraton and Westin; dreamed up a new chain, the W, that appealed to the young, Kenneth Cole-wearing executive class; and transformed the St. Regis from a stand-alone hotel in New York into a worldwide luxury chain.

He was the thirtysomething fireball of the hotel business, revolutionizing the industry and stealing customers and glory from slow-moving giants like Marriott and Hilton. In the process, he created countless enemies outside the firm by openly mocking his competitors’ conservative ways and, internally, by ignoring veterans’ opinions and relentlessly hounding his senior executives.<

“In the hotel industry, he embarrassed a lot of people,” says Ted Darnall, chief operating officer of HEI Hotels & Resorts and former head of Starwood’s North American operations. “He had the vision and strategy that the so-called experts didn’t see or said wouldn’t work. And very little of Barry’s vision was wrong. That’s going to result in a lot of people wanting to see him fail.”