Starwood founder: CEO switch addressed THIS concern

Sternlicht: Starwood moving slowly
Sternlicht: Starwood moving slowly   

Starwood Hotels founder Barry Sternlicht told CNBC on Thursday that the CEO change at the international hotel chain reflected a concern about lagging innovation.

"They're moving up slowly, and Marriott and Hilton have done a better job addressing the millennials," he said in a "Squawk Box" interview. "And they hadn't done a lot innovating. It was soft innovation, technology but [not] as far as new product lines ... like the Hilton Gardens and the Courtyards."

Frits van Paasschen, CEO since 2007, resigned "by mutual agreement" with the board, the company announced Tuesday. Adam Aron, a Starwood director since 2006, will be serving as interim chief executive until a permanent replacement can be found.

"It is very important that a leader in the hotel industry be both creative, I think, and compassionate," said Sternlicht, who does not have any involvement in the hotel chain anymore. "You're running a firm that has a 100,000-plus employees that have to go into battle for you everyday."

Frits van Paasschen, CEO of Starwood Hotels and Resorts.
Patrick Bucci | CNBC
Frits van Paasschen, CEO of Starwood Hotels and Resorts.

"I think that was not [van Paasschen's] greatest strength," said Sternlicht, who added that he thought van Paasschen is a very smart. "It's an industry where you need a very charismatic leader."

The Starwood Hotels company grew out of Sternlicht's Starwood Capital Group, an investment firm that currently has more than $42 billion in assets under management. Sternlicht served as Starwood Hotels chairman and CEO from 1995 to early 2005. Starwood Capital does not own the stock.

"We were a very innovative company ... when I ran the company," said Sternlicht. "We need to get back to that spirit of innovation, leading not following."

Addressing the seemingly abrupt management change, he said, "Clearly something bubbled up." But he added, "What happened, I have no idea."

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