Starwood Hotels in Expansion Mode - Analyst Blog

Leading hoteliers are trying to focus and expand domestically and overseas. Most hotel companies worldwide are busy augmenting guest satisfaction and gain a better foothold in the industry amid stiff competition.

Following the trend, Starwood Hotels & Resorts Worldwide Inc. HOT is also making frequent hotel openings worldwide. Recently, the company announced that it will open a hotel in Indonesia under its brand Four Points by Sheraton and opened one under its popular brand Westin in Cleveland, OH.

The hotel in Indonesia will be called Four Points by Sheraton Makassar and is being developed in collaboration with IMB Group. Four Points by Sheraton has the second largest pipeline of hotels among all Starwood brands. Slated to open in May 2015, this hotel will mark the entry of the brand in the region.

Located at the center of Makassar's new business district, this hotel will feature 261 guestrooms and various other luxury amenities. Once completed, this hotel is expected to have the largest convention center in Makassar.

Currently, the company has 14 properties in Indonesia, which is the Southeast Asia's largest economy. Indonesia, the world's fourth most populous country, is one of the fastest growing markets for Starwood. The company intends to expand its portfolio in the region and has 10 more properties coming up in the region.

The other hotel in Cleveland, OH marks the entry of the Westin Brand in the region. This hotel, which was previously known as Crowne Plaza hotel, has been renovated at a cost of $74.0 million. This hotel has 484 rooms which features meeting facilities spread over an area of 20,000 square feet and various other Westin signature amenities and services. Located near the Global Center for Health Innovation & Convention Center complex and many other hot spots of the city, this luxury brand hotel offers an ideal location for business as well as leisure travelers.

Starwood Hotels is consistently trying to expand its global presence. More than half of Starwood's properties are situated outside the U.S., which give the company wide international exposure unlike any of its peers. With the rise in global travel demand, Starwood expects 2014 to be solid in terms of openings and new agreements. The company will continue to concentrate on fast-growing areas where demand is substantially high but supply remains limited.

Owing to the saturation in the U.S. market, several major hoteliers such as Marriott International, Inc. MAR are also exploring growth opportunities abroad.

Starwood Hotels & Resorts presently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the hotel industry include Hilton Worldwide Holdings Inc. HLT and InterContinental Hotels Group plc IHG, both with a Zacks Rank #2 (Buy).

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