Why Did Starwood CEO Frits Van Paasschen Resign?

Starwood Hotels & Resorts announced on Monday that CEO Frits van Paasschen had resigned by “mutual agreement” with the board of directors as President, chief executive and a director.

Adam Aron, a Starwood director since 2006, has been named CEO on an interim basis, while the board hunts for a permanent CEO that will include both internal and external candidates, a statement said.

The timing of Frits van Paasschen’s resignation will have caught many by surprise. In line with the operator’s growth in emerging markets, he was an increasingly familiar face in the Gulf – and only this week he was in Dubai to attend the signing for new Element and Aloft properties. The perception was business as usual.

But clearly this wasn’t the case. Board Chairman Bruce Duncan has been quoted as saying it wants to “sharpen its focus on operational excellence”, which implies this was one sticking point among executives and investors.

Van Paasschen had become adept at expanding Starwood’s portfolio but now the global operator wants to manage costs more aggressively and drive “top line growth” – effectively focus more on the day-to-day task of filling its rooms, MICE facilities and restaurants.

His non-hotel background and commercial prowess in other fields was initially seen as an attribute as it gave Starwood fresh perspective and impetus competing in tough global markets. But did this lack of operational experience ultimately count against him?