In order to beef up its Latin American portfolio, Intercontinental Hotels Group plc (IHG - Free Report) is set to unveil a Holiday Inn-branded property in Peru in association with Operaciones Turisticas Peruanas S.A.C. The property – Holiday Inn Lima Airport – will be the second IHG-branded hotel in the country, the first being Crowne Plaza Lima.
Strategically positioned at Lima, the financial hub of Peru, the Holiday Inn-branded property will be in close proximity to Jorge Chávez International Airport (LIM) as well as the Port of Callao. Intercontinental’s expansion plan in Peru is mainly driven by its strong economic growth and a large tourism industry.
As much as $24 million will be spent for the development of the property. The 179-room hotel will also be included under the $1 billion revitalization program initiated by the company to improve guest satisfaction at all Holiday Inn-branded properties.
Following the saturation of the U.S. market, major hoteliers are exploring in international locations. With around half a billion people and an abundance of natural resources, Latin America is now the most sought-after location among the hoteliers.
The emerging economy in Latin America, affluent middle-class population which grew 50% over the last decade and greater footfall in the region have not escaped Intercontinental’s attention.
The Zacks Rank #3 (Hold) company debuted in Latin America 65 years ago and therefore has a long-standing business in the region. It boasts 75 hotels in Central and South America and the Caribbean including 44 Holiday Inn-branded properties. We believe the new property will further strengthen the company’s brand presence in the region and is in line with its growth strategy.
Another hotelier, Starwood Hotels & Resorts Worldwide Inc. , recently entered the Peruvian market with Four Points by Sheraton Miraflores.
Some players in the hotel industry, which look attractive at current levels, include Hyatt Hotels Corp (H - Free Report) and China Lodging Group, Limited (HTHT - Free Report) , both carrying a Zacks Rank #2 (Buy).