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Marriott International, Inc.’s (MAR - Analyst Report) wholly-owned subsidiary, The Ritz-Carlton Hotel Company is set to open its first golf resort in Haikou on Hainan Island in China. The Ritz-Carlton, Mission Hills will be developed by the Mission Hills Group – the world’s leading golf brand –and managed by The Ritz-Carlton. It is scheduled to be opened in late 2015.

The Haikou Mission Hills Golf Club project will include 10 world-class golf courses and will be the largest public golf complex in the world. Other features include 201 rooms, a club house, restaurants, bars, tennis courts, swimming pools, a recreation pavilion and 1,480 square meters of convention and meeting spaces.

Back in Nov 2011, the Mission Hills Group and Marriott International had entered into a partnership to manage new Ritz-Carlton and Renaissance Hotels at Mission Hills in Hainan. Both these hotels were slated to open in fourth quarter 2013 but are now set for a 2015 opening.

Hainan has tremendous growth potential for the hotel industry while the nearby city of Haikou is the new center for business and tourism. Besides its pristine white sand beaches, Haikou is also known for its historical sites. This justifies the company’s decision to expand in the region.

Marriott International 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 next 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. 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. (Read More: Marriott Plans Extensive Global Expansion)

We believe Marriot’s aggressive expansion will enable it to capitalize on the global demand for luxury hotels. Additionally, customers are willing to pay higher rates for premier lifestyle brands for their exclusive services.

Marriott currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same industry include The Marcus Corporation (MCS - Snapshot Report), Marriott Vacations Worldwide Corp. (VAC - Snapshot Report) and Choice Hotels International Inc. (CHH - Snapshot Report). While Marcus Corporation sports a Zacks Rank #1 (Strong Buy), Marriott Vacations Worldwide and Choice Hotels International carry a Zacks Rank #2 (Buy).
 

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