In the battle between Hilton and Starwood Hotels, the latter has come out victorious. To give you a background, the Starwood Hotels had sued the Hilton Hotels over an espionage suit, accusing it of stealing documents in order to develop a new luxury hotel chain, Denizen. As part of the settlement, Hilton will be banned from creating this “boutique” hotel chain. Two of Starwood’s former employees had defected to Hilton and it seems had taken confidential material that had been used to develop Starwood’s W chain.
This material apparently was used to design Denizen. The W brand was launched in 1998 and has proved to be a major success. Not surprisingly, Hilton along with other hotel brands has been trying to replicate its success. But Hilton’s plans will be stalled for the next two years till it can start something new. It will also not be able to hire any Starwood employees from now on.
Frits van Paasschen, president and chief executive of Starwood, said: “Starwood is proud of its leadership position in creating lifestyle brands that connect with consumers, drive loyalty and are highly profitable for our owners. Given the facts, we had no choice but to stand up and protect our brands on behalf of our investors, associates, owners and customers. This settlement reinforces this protection and restores a level playing field for fair competition.”