Starwood Enters Hotel-Goods Pact With Zoho

Starwood Hotels & Resorts Worldwide Inc., owner of the Sheraton, Westin and other major hotel chains, said it will invest $30 million in Zoho Corp. and will channel much of its $3 billion a year in purchases through the Internet-based hotel-goods supplier. The deal with Zoho follows the collapse of talks between Starwood and rival hotelier Marriott International Inc. to establish an online supply pact with massive purchasing power on the Internet. Under terms of the deal with Sunnyvale, Calif.-based Zoho, Starwood will receive a more than 25% stake and two seats on closely held Zoho’s board, Starwood said. Starwood said it expected its relationship with Zoho to improve its procurement efficiency and reduce costs 5% to 10%. Zoho is one of a handful of start-up businesses seeking deals with major hotels to provide sheets, food, ice makers, copiers, ATMs, phones and a host of other products in exclusive Web purchasing deals.