Ritz-Carlton to Debut in Langkawi - Analyst Blog

Hoteliers like Marriott International, Inc. MAR are constantly looking to expand in the faster-growing Asian markets. Recently, the Ritz-Carlton Hotel Company, L.L.C. — a wholly owned subsidiary of Marriott — signed an agreement with AJ Resorts SDN BHD to open its first resort on the island of Langkawi, Malaysia, in 2015. With this hotel, the Ritz-Carlton brand will double its Malaysian presence.

The 132-room luxury resort – Ritz-Carlton, Langkawi – will be surrounded by lush tropical rainforests and offer a scenic view of the Andaman Sea. Additionally, it will have a private cove and beach. The resort will include 42 villas, three swimming pools – one especially for children — Ritz-Kids Club — a signature program for children —, multi-cuisine restaurants, a spa and spacious banquets. The resort is located close to the Pulau Payar marine national park, a popular local attraction.

Popularly known as the Legendary Island and the Jewel of Kedah, Langkawi has been famous for its dive locations, beaches and diverse local culture. In our view, Marriott is looking to cash in on the popularity that the scenic island enjoys among travelers.

Malaysia has been one of the top destinations for both leisure and business travelers in the recent years because of the diverse world-class attractions and services it offers. In its long-term forecast, the World Tourism Organization, in 2010, stated that international tourism will continue to grow at a steady pace in the next two decades (2010–2030), with international tourist arrivals worldwide increasing at an average rate of 3.3% annually. This has led to a surge in the demand for luxury hotels.

In fact, Malaysia's growing appeal as a tourism destination is contributed by its numerous tourist destinations and unique culture. We believe Marriot is seeking to capitalize on the demand for luxury hotels in the region.

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).

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