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Marriot's (MAR) W Hotels Brand Marks its Entry in Shanghai

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A Marriott International, Inc. (MAR - Free Report) unit, W Hotels Worldwide, recently announced the opening of W Shanghai – The Bund. In fact, this is the first property in Shanghai and the third in Mainland China, under this brand that is part of Marriott’s luxury brands portfolio.

The 374-roomed hotel is perfectly positioned between the Suzhou Creek and the Huangpu River, and is owned by Sinar Mas Group. Moreover, the property encompasses large meeting and event spaces, a spa, and five food & beverage outlets.

This new property at Shanghai also joins a portfolio of over 50 W Hotels properties around the world. In fact, Shanghai being one of the most cosmopolitan cities in the world, it is an opportune time to have opened a property there now.

Meanwhile, it is to be noted that Marriott is consistently trying to expand its presence worldwide and capitalize on the demand for hotels in the international markets, especially in Asia, Latin America, Middle East and Africa, in addition to domestic lands. Notably, the demand for hotels in these markets is greater than in the domestic space as the rising disposable income, primarily among the middle classes, is boosting tourism.

Within Asia-Pacific, China promises immense growth potential, despite the economic slowdown. In fact, management notes that China has become an increasingly important market for Marriott.

Notably, after announcing the acquisition of Starwood Hotels & Resorts on Sep 23, 2016, Marriott has become the world’s largest hotel company. Currently, it has more than 6,100 properties across 124 countries and territories, under 30 brand names. Post-acquisition, shares of the company have rallied 45.6%, while the S&P 500 index gained 10.9% in the same time frame, depicting the positive effect of the buyout.



Given strong transient demand along with improvements in business and leisure travel, we believe Marriott is poised to grow in the near as well as long term. Additionally, investments in technology for hotel bookings are likely to improve guest experience and thus boost occupancy.

Furthermore, Marriott believes that linking of the three industry-leading guest loyalty programs – Marriott Rewards, Ritz-Carlton Rewards, and Starwood Preferred Guest – would lead to an even larger loyalty community in the near term.

However, lingering political uncertainties in key international markets along with currency headwinds remain concerns for Marriott as well as most of the other hotel chains including Hyatt Hotels Corporation (H - Free Report) , Hilton Worldwide Holdings (HLT - Free Report) and Wyndham Worldwide Corporation .

Notwithstanding the headwinds, this Zacks Rank #1 (Strong Buy) company’s continual expansion efforts and an unmatched portfolio of lodging brands, raises investors’ optimism in the stock. You can see the complete list of today’s Zacks #1 Rank stocks here.

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