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Starwood's Aloft Forays into Cancun

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Aloft, one of the brands of Starwood Hotels & Resorts Worldwide Inc. , unveiled a property in Cancun, Mexico. The property marks Starwood’s 25th opening in Mexico and its eighth brand in the country. The hotel features 177 guest rooms along with numerous amenities.

Starwood has set a new trend in hotel designs with its Aloft brand and has spread its operations globally with more than 70 hotels since its launch in Jun 2008. The brand rides on a high growth trajectory and has already stepped into every region including North America, Europe, the Middle East, Latin America, India, Southeast Asia and China.

In its five years of journey, Aloft has performed satisfactorily in terms of guest satisfaction, reflecting the brand’s strength and growing popularity. The Aloft concept is in in sync with the preference of modern travelers who seek a unique experience.  Its affordable price point in the mid-market hotel category is another reason for its increasing popularity. In the first quarter of 2013, revenue per available room (RevPAR) growth at Aloft was 7.7% in constant dollars, the third highest among all the other brands.

Owing to the saturation in the U.S market, major hoteliers are exploring growth opportunities abroad. Starwood has long been thriving on South and Central America. The affluent middle class population in Latin America, an abundance of natural resources and greater inclination of global travelers to spend on leisure in that zone caught the attention of Starwood. Apart from tourism, the region is also successfully emerging as a business hub. Further, we believe Cancun is a strategic fit for new hotels as it is an important business destination as well as leisure hub.

The Aloft first stepped into Latin America in 2011 with Aloft Bogota Airport. In another three months, it came up with Aloft San Jose in Costa Rica. The company currently has a total of eight hotels in the region including the ones in the pipeline. The Aloft Panama will open its doors this month followed by Aloft Merida and Aloft Guadalajara in 2014. Aloft Asuncion and Aloft Montevideo will follow suit in 2015.

Starwood currently retains a Zacks Rank #3 (Hold). Some other players in the leisure and recreational industry, which look attractive at current levels, include Orient-Express Hotels Ltd. carrying a Zacks Rank #1 (Strong Buy) and Marriott International, Inc. (MAR - Free Report) and Sands China Ltd. carrying a Zacks Rank #2 (Buy).

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