Marriott Plans Extensive Global Expansion - Analyst Blog

Marriott International, Inc. MAR intends to significantly grow its global portfolio of luxury and lifestyle brands, which currently constitutes 25% of its total pipeline. The hotelier intends to open more than 200 luxury and lifestyle hotels over the upcoming three years, reflecting an investment of roughly $15 billion by its owners and franchisees.

With the global economy as well as the consumer sentiment gradually improving, demand for luxury and lifestyle brands is on the rise. Therefore, Marriott plans to expand its portfolio of lifestyle offerings which include The Ritz-Carlton, EDITION, JW Marriott Hotels & Resorts, Autograph Collection, Renaissance Hotels, AC Hotels by Marriott and Moxy Hotels.

By 2016-end, 15 Ritz-Carlton branded hotels are scheduled to come up in China, Morocco, Egypt, Saudi Arabia, Mexico, Tunisia, China, Bali, Indonesia and Macao. An EDITION-branded hotel will be opened at Miami Beach this year and the brand will debut in New York City's landmark Clock Tower building in 2015. More properties are scheduled to be unveiled at Abu Dhabi, India, China, Bangkok and West Hollywood as well as at the Times Square by 2017.

JW Marriott Hotels & Resorts will debut in Italy in early 2015.  Additionally, the brand is on course to open 23 hotels in the upcoming two years. Further, the company plans to add 20 hotels to its rapidly growing Autograph Collection brand.

Renaissance Hotels was scheduled to open nine hotels in 2014. Out of these, five are already operational and four more are scheduled to be launched. The Renaissance Hotels brand plans to expand its portfolio to more than 160 hotels in 37 countries by 2014-end.  

AC Hotels by Marriott, a brand launched in Europe in 2011 as a joint venture with Spanish hotelier Antonio Catalan, plans to open its first hotel in the U.S. this year at the Cotton Exchange Building in New Orleans. This will be followed by hotel openings in Kansas City and Miami in early 2015. The brand plans to operate more than 30 hotels within the next three years throughout the U.S. and Latin America.

Marriot's Moxy Hotels brand is set to debut in Europe this September at Milan's Malpensa Airport. The brand focused on a pan-European expansion by the end of 2016 which includes locations like Munich, Berlin, and Frankfurt in Germany; Oslo, Norway; London, United Kingdom and Aberdeen, Scotland. In the next 10 years, the hotelier expects around 150 hotels under the brand.

In our view, Marriot's aggressive expansion will enable it to capitalize on the global demand for luxury hotels. Additionally, customers are viewing the brand positioning of lifestyle brands favorably and are willing to pay the higher rates for their exclusive services.

Marriott currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same industry include Wyndham Worldwide Corp. WYN, Intercontinental Hotels Group plc IHG and Marriott Vacations Worldwide Corp. VAC. All these stocks have a Zacks Rank #2 (Buy).