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Starwood Broadens Global Exposure

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Starwood Hotels & Resorts Worldwide, Inc. is consistently trying to expand its global presence. Recently, the company declared that despite the present worldwide macroeconomic turmoil, it signed 152 hotel management and franchise deals in 2013, reflecting an increase of 16% year over year. This is the company’s highest number of hotel signing in the past six years.

The hotelier has also unveiled 74 properties with nearly 16,200 guestrooms located across 22 countries in the last year. Apart from this, Starwood has renewed 75 contracts. In 2013, the company mostly focused on the markets with significant growth potential. Of the company’s total development pipeline, 75% targets the potential markets of Bangladesh, Malaysia, Indonesia, Colombia and Saudi Arabia. Moreover, nearly 60% of the company’s deal signings in 2013 was in the emerging markets.

To counter competition, most of the hoteliers are striving to improve guest satisfaction. Therefore, brand conversion and renovation have become a trend, especially in the domestic market. In 2013, Starwood opened 13 properties after successful brand conversion.

Starwood’s Adaptive reuse project is also becoming popular. The hotelier has opened three Aloft-branded properties under the project in 2013 and intends to open three more such properties this year. 

The company has opened several full-service, luxury branded properties in 2013, increasing its luxury portfolio by twofold in the last six years. Starwood now boasts as many as 160 properties under its luxury brands. The hotelier also plans to open 10 properties under its luxury brands in 2014.

Additionally, 30 properties were unveiled under the company’s upper upscale brands — Sheraton, Westin and Le Méridien — in 2013. Moreover, the company has entered into 60 hotel agreements under the upper upscale properties in 2013. The company expects to open the highest number of Le Méridien properties in 2014.

The company’s mid-market brands, Four Points by Sheraton, Aloft and Element, also grew in 2013 with 37 hotel openings and 77 deal signings. The mid-market segment portfolio has increased 80% in the past five years. Nearly 45% of the company’s total upcoming properties in 2014 will be developed under the Four Points by Sheraton brand.

In addition, Aloft has seen solid growth in 2013. The brand made its debut in various locations like Riyadh, Saudi Arabia; Suwon-city, South Korea.

With the rise in global travel demand and increasing wealth, Starwood expects 2014 to be solid in terms of openings and new agreements. The company will continue to concentrate on the fast-growing areas where demand is substantially high but supply remains limited.

Starwood holds a Zacks Rank #2 (Buy). Some better-ranked stocks in the hotels sector include Home Inns & Hotels Management Inc. , Hyatt Hotels Corp. (H - Free Report) and Wyndham Worldwide Corp. (WYN - Free Report) . While Home Inns & Hotels sports a Zacks Rank #1 (Strong Buy), Hyatt and Wyndham carry the same rank as Starwood.

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