Starwood Hotels & Resorts Worldwide Inc. (HOT) said on Monday it will introduce a new lower-priced version of its successful W Hotels (search) chain in an attempt to win business at the lower end of the market with a more trendy, youth-oriented hotel.

The new hotels, code-named "Project XYZ" by the company, will feature loft-like guest-rooms and landscaped outdoor space for socializing, the company said. Starwood plans to open more than 500 "XYZ" hotels by 2015, with the first scheduled to open in 2007.

"We have over a dozen development partners that have all committed to build substantial numbers," said Starwood CEO Steven Heyer at the New York University (search) International Hospitality Industry Investment Conference on Monday.

"We are very optimistic this will be a footprint that will exceed 100 hotels over the next couple of years," said Heyer. "I think it's a massive market opportunity, I think it's a growth opportunity."

Starwood will spend about $85,000 to $90,000 per room on the project, Heyer said at the conference.

Starwood shares were down 40 cents at $57.36 on the New York Stock Exchange (search).