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Starwood Forays into Samoa

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Starwood Hotels & Resorts Worldwide, Inc. has entered into an agreement with Aggie Grey’s Hotel & Bungalows and Aggie Grey’s Lagoon, Beach Resort & Spa on the island of Upolu Samoa to renovate and operate the two properties. With these agreements, the company has entered into the market of Samoa for the first time.

These properties had stopped functioning since Dec 2012.  Post-renovation, they are expected to reopen as the Sheraton Samoa Aggie Grey’s Hotel and the Sheraton Samoa Aggie Grey’s Resort by mid-2014.

Located 45 minutes from the airport, the Sheraton Samoa Aggie Grey’s Hotel will feature 198 guest rooms and suites and 17,000 square feet of meeting space. Sheraton Samoa Aggie Grey’s Resort on the other hand is located just 5 minutes away from the airport and will feature 140 guest rooms and suites. However, common amenities shared by both include a signature restaurant and bar, casino, and a large outdoor resort style fantasy pool and pool bar.

Starwood is one of the world’s largest hotel and leisure companies and operates 9 brands, which cater to most major markets around the world. Given its property locations and strong brand recognition, the company is well positioned to benefit from higher market demand on the back of stepped-up business traveling in major North American and international locations.

More than half of Starwood’s properties are situated outside the U.S., which gives it wide international exposure. The demand for hotels in the international market is greater than in the U.S. and the pace of recovery is particularly fast in the underserved Asia-Pacific region.

The Sheraton brand has more than 100 hotels in operation while 50 more are in the pipeline in the Asia Pacific region. With the opening of Sheraton Shantou Hotel in China in Nov 2013, the company reached the 100th hotel milestone in the Asia-Pacific region.

On Nov 20, 2013, Starwood Hotels and Resorts announced that it is set to open a resort on Tokoriki Island in Fiji under its Sheraton brand. These hotels and resorts will further strengthen the company’s position in the Pacific region while helping it to achieve its target of 500 hotels by 2016.

Currently, Starwood operates 14 properties across the Pacific region, with 9 hotels in Australia, 3 hotels in Fiji and 2 in New Caledonia. Several other markets, which had been reeling under pressure for quite some time, such as Europe, Japan and the Middle East and Africa have started to show signs of improvement.

In Nov 2013, Starwood Hotels & Resorts signed deals to open three hotels under its most popular brand, Sheraton. The three hotels will be opened in new African markets of Mauritania, Guinea and South Sudan.

The company presently has a short-term Zacks Rank #2 (Buy). Other players in the hotel industry, which look attractive at current levels, include Home Inns & Hotels Management Inc. , Marriott Vacations Worldwide Corp. (VAC - Free Report) and Marriott International, Inc. (MAR - Free Report) . While Home Inns & Hotels carry a Zacks Rank #1 (Strong Buy), Marriott Vacations Worldwide and Marriott International hold a Zacks Rank #2 (Buy).

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