“They just went f*cking bonkers and lost all fiscal discipline”: Sternlicht

Starwood chief lets loose on spending deal, Airbnb, Amazon at Miami conference

Barry Sternlicht at the University of Miami Real Estate Impact Conference (Credit: University of Miami)
Barry Sternlicht at the University of Miami Real Estate Impact Conference (Credit: University of Miami)

Tax reform, the spending bill, the Starwood-Marriott merger, the state of retail, Amazon as Darth Vader and much more got Barry Sternlicht going at a real estate conference in Miami on Friday.

Sternlicht, chairman and CEO of Starwood Capital Group, called it “unbelievably irresponsible” for Congress to pass the $300 billion spending package on the heels of passing tax reform legislation, comparing it to “throwing kerosene” into a fire.

“They just went fucking bonkers and lost all fiscal discipline,” he said at the University of Miami Real Estate Impact Conference. The uncertainty in the equity markets is reflected in the stock market’s recent volatility, he said, adding, “the equity markets are like quaking.”

In a conversation with moderator Cathy Marcus, head of PGIM Real Estate, Sternlicht covered a range of topics. Nothing, it seemed, was off-limits.

Regarding Marriott International’s $13 billion acquisition of Starwood Hotels & Resorts last year, he said: “I was really happy with the merger. I really didn’t want the Chinese to buy it.”

The online travel agency business? It’s in trouble, he said, comparing Expedia’s upcoming contract negotiations with Marriott International to World War III. “We’ll see who wins,” he said. “There’s a war coming.”

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Airbnb, which Sternlicht called, “effectively a global distribution company,” will stick around. “It’s not like people didn’t rent houses before. They made it easy.”

He underlined the importance of adapting to change.

“My goal is to not be Kodak. How did that happen? How did Kodak miss the digital film revolution?”

Last year, Miami-based Newgard Development Group announced it was partnering with Airbnb on the first Airbnb-branded apartment building in the U.S., just outside of Orlando.

When asked about the retail industry, Sternlicht joked, “Do we have to?”

Starwood, he said, owns 23 malls. “I would be lying if I said I wanted to own them.” He did predict malls will survive, but they will be repurposed to include new apartments or hotels.

And as for Amazon? The ecommerce giant may “become Darth Vader,” Sternlicht said, but the Walmart vs. Amazon war was a “fascinating battle. [Walmart] has the cash or the resources to really take them on.”