In line with its continued band revitalization initiatives, Starwood Hotels & Resorts Inc. (HOT - Analyst Report) recently completed an extensive makeover of its iconic hotel, Prince de Galles, Paris under its upscale brand, The Luxury Collection Hotels & Resorts. The hotel reopened following a two-year renovation.
Situated in Avenue George V in Paris, the hotel enjoys excellent positioning. Prince de Galles, Paris, which is famous for its Parisian Art Deco (a visual art design usually used in the 1930s and 1940s), has witnessed high footfall since its opening in 1928. Starwood, in association with ERTIM Architectes SA and two other world-renowned famous architects, Pierre-Yves Rochon and Bruno Borrione, revamped the heritage hotel.
It is the last property that was scheduled to undergo a restoration as part of a $200 million project. The company initiated the refurbishment project to reinvigorate some of its most renowned Luxury Collection branded properties in Europe. The company has already revived Hotel Alfonso XIII in Seville and Hotel Maria Cristina in San Sebastian in 2012 and Gritti Palace in Venice in early 2013.
In a concerted effort to strengthen its position in a cut-throat environment, most of the hoteliers have been striving to improve guest satisfaction. Therefore, brand conversion and renovation have become a trend.
Starwood, one of the leading players in the hotel industry, is committed to refurbish most of its brands including W, The Luxury Collection, Sheraton and Westin. Starwood is primarily focusing on reviving its older properties operating in dynamic markets in order to maintain consistency with the newer ones. Where necessary, Starwood is also resorting to brand conversion via remodeling.
It is also remodeling the Le Meridien branded hotels across the world, for which it plans to invest about $3 billion in both existing and new properties. Additionally, this Zacks Rank #3 (Hold) company also plans to inject an additional $1 billion into the business to improve its total hotel portfolio.
Major hoteliers such as Marriott International Inc. (MAR - Analyst Report), Hyatt Hotels Corporation (H - Snapshot Report) and InterContinental Hotels Group (IHG - Snapshot Report) are also walking the same path. Renovation work, however, hurts revenues in the near term when construction is on. But after completion of the work, renovated properties are more rewarding due to its improved services, which we believe is the main reason for such back-to-back restoration projects by hoteliers.