In order to beef up its Polish as well as Luxury Collection portfolio, Starwood Hotels & Resorts Worldwide Inc. (HOT - Analyst Report) introduced one of its upscale brands, The Luxury Collection Hotels & Resorts, in Warsaw, Poland. The Luxury Collection was unveiled in Warsaw after a renovation of the former iconic Hotel Bristol. Apart from this, Starwood has two other brands in Warsaw – Sheraton and Westin.
Strategically positioned next to the Presidential Palace and on the historic and stylish Royal Route, the hotel will enjoy a prime location and is expected to attract both business and leisure travelers. The new Luxury Collection property features 168 guest rooms including 38 suites along with several other amenities.
Owing to the saturation in the U.S market, major hoteliers are exploring growth opportunities abroad. Poland is one of those regions, which has been less ruffled by the Euro-zone crisis and promises solid growth going forward due to the country’s inspiring economic performance. Currently, Starwood possesses six properties in Poland and three in Warsaw including the new one.
According to Jones Lang LaSalle Hotels, the performance of hotels in Warsaw –the Polish capital -- rebounded massively since the recession in 2009. Warsaw’s profits increased 22.7% year over year in 2012, as per a survey by TRI Hospitality Consulting.
A stronger economy compared to other troubled European regions should enhance demand for business travel in Poland. Also, the Polish market is relatively under-penetrated than other western European nations. These attributes make the country a strategic fit for new openings.
However, the market is not devoid of competition. To tap the increasing potential, many of Starwood’s peers including Marriott International Inc. (MA - Analyst Report)R) and Wyndham Worldwide Co. (WYN - Analyst Report) have established their presence in the market.
Coming to the brand, Luxury Collection Hotels & Resorts falls in the eponymous category. Management once commented that luxury resorts generally have a higher demand abroad and hence Starwood has 90% of its Luxury pipeline outside North America.
Launched in 1906, the brand rides on a high growth trajectory and has already spread globally with more than 80 hotels in more than 30 countries. Well known for its upscale hospitality and individuality, management sees the brand as a lucrative addition to its luxury hotels and recently planned to invest $200 million to refurbish some of its most renowned hotels in Europe.
Starwood currently retains a Zacks Rank #3 (Hold). However, another hotel stock worth a look is The Marcus Co. (MCS - Snapshot Report) with a Zacks Rank #1 (Strong Buy).