Back to top

Analyst Blog

Marriott International Inc. (MAR - Analyst Report) is on the verge of completing the renovation of its Chicago Marriott O'Hare property for $40 million. The Chicago hotel near O'Hare is likely to unveil its new look in January 2012. The renovation program covers 470 guest rooms and includes the addition of a state-of-the-art fitness center, 7400 square feet of meeting space and other amenities.

Marriott has embarked on an extensive remodeling program, which also includes its Riverside, California property. Renovation work on this property's lobby, bar and restaurant is scheduled to be over by September 2011. The lobby at the Courtyard Miami Beach hotel also got a facelift last month.

Since late 2010, hotel companies are working hard on guest satisfaction to uplift their positions in a cutthroat environment. Following the facelift trend, in March, one of Marriott’s peers Starwood Hotels & Resorts Worldwide Inc. (HOT - Analyst Report) announced similar plans for The Sheraton, New York, one of the largest hotels in New York City. Starwood will shell out $150 million for the renovation, which is being done in two phases. The first of these phases was completed in May.

Last month, another of Marriott‘s peers, InterContinental Hotels Group (IHG - Snapshot Report), also completed phase one of its Sao Paulo property renovation.

Coming back to Marriott, management believes that renovations can hurt revenue per average room rate on a same-store basis, when construction is underway. The renovation of the meeting space and some guest rooms at the Philadelphia Marriott downtown reduced RevPAR growth for the North American company-operated Marriott brand by about 0.5 percentage point alone in the first quarter 2011. This year, Marriott has 47 properties are under renovation compared with 30 hotels in the year-ago quarter.

However, renovation of existing properties will pay off more once the construction is complete. Marriott International currently retains a Zacks #2 Rank, which translates into a short-term Buy rating. We are also maintaining our long-term Neutral recommendation on the stock.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SIGNET JEWE… SIG 116.37 +7.72%
INSITE VISI… INSV 0.30 +7.11%
CHYRONHEGO… CHYR 2.72 +5.84%
US SILICA H… SLCA 70.72 +4.00%
MALLINCKROD… MNK 80.11 +2.32%