*Hotel Chain Revamps Rewards Program

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NEW YORK -- Starwood Hotels & Resorts Worldwide Inc., White Plains, NY, debuted a new loyalty program here yesterday that it touts as one of the easiest to understand and use in the industry.

The Lacek Group, Minneapolis, will handle the direct mail campaign. Information also will appear on its Web site, www.preferredguest.com, as well as print ads in newspapers and magazines. The direct mail pieces will be sent to members of frequent-flier programs and travelers who are in Starwood's database. The hotelier hopes the reported $50 million ad campaign will raise the stakes against rival rewards programs offered by Marriott International Inc., Hilton Hotels Corp. and Hyatt.

"This program could be the most important loyalty program the company will bring to market this year," said Barry Sternlicht, chairman/CEO of Starwood. "We spent a lot of time asking frequent travelers what they cared about, and the result was a program that is easier to use."

Along with the launch of Starwood Preferred Guests, the hotel chain launched its first reward offer, which is valid through May 31. Members can receive up to three free nights at any Starwood hotel, including Sheraton, Caesar, Westin, W and the St. Regis/Luxury Collection. Members also will be able to trade points for airline miles, AT&T phone minutes or merchandise from Saks Fifth Avenue, Lands' End, Franklin Covey and the Sharper Image. A new offer is being planned for the fall.

"This offer is unique in the terms of size and length," said Hoyt H. Harper II, vice president of marketing programs at Starwood. "We expect the response to be high since we are targeting business travelers."

The Preferred Guests program replaces the Sheraton Club International and Westin Premier programs. Harper said one of the company's goals was to create synergy between the hotels in its network. The print campaign, which began this week, suggests that a business traveler who stays at a downtown or airport Sheraton can redeem points to stay at one of Starwood's deluxe resorts.

"Sheraton lacked marketing muscle, and Westin had limited distribution -- so we created a program to cover all of our hotels," he said.

The incentives are based on studies that were conducted with frequent travelers who expressed problems with other loyalty programs.

"Travelers were complaining about not being able to go where they wanted or not being able to redeem their tickets when they wanted," said Jim Berra, director of member communications at Starwood.

For every dollar spent at a Starwood hotel, it awards two Starpoints. Members won't experience blackout dates and won't be forced to travel during specific times of the year. To earn a free night, Starwood said a member must spend $1,000.

"Some other programs will make you choose a destination like Phoenix and then say you have to come in July when nobody wants to go to Arizona," Berra said. "Our program, by contrast, will not black out any time period. Guests who want to redeem points at our Sydney, [Australia], hotel for the 2000 Olympics may do so."

With 1,500 properties worldwide, Marriott's program has become the industry standard, but the hotel chain has received several complaints from consumers criticizing how confusing its program is. Starwood has 690 hotels and casinos and is expecting its new program to boost its occupancy rate 4 percent to 5 percent, which Sternlicht was quoted as saying would be worth "hundreds of millions of dollars."

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