Starwood Hotels & Resorts Worldwide, Inc. remains steadfast in its goal to expand its presence in the international market. The company recently inked an agreement with a renowned real estate development company, Cevahir Yapi Sanayi Turizm ve Ticaret A.S., to open a Sheraton-branded hotel in Istanbul, Turkey. Christened — Sheraton Istanbul Atasehir — the hotel is slated for a 2015 opening.
Starwood has a considerable presence in Turkey with 10 properties, out of which 6 are under the Sheraton brand. Four other brands — Aloft, W, Le Méridien and Luxury Collection — also operate in the country. Starwood will unveil another property in Turkey this year — the St. Regis hotel — marking the brand’s entry into the region.
Bordered by four seas, Turkey boasts incredible landscapes. Also, the country has doubled its GDP during the last decade. To tap the country’s economic growth, Starwood is expanding its footprint to most emerging cities of the country.
Specifically, Istanbul — the largest city in the country — serves as a trade and transportation hub and is famous for its historical attractions and therefore, attracts both business and leisure travelers. We believe such favorable factors prompted Starwood to expand further in the region.
For the past few quarters, Sheraton has been instrumental in Starwood’s market share growth. The brand comprises around 30% of the company’s current total global pipeline. In its 70-year journey, Sheraton — one of Starwood’s strongest brands — has gained strength and popularity, owing to guest satisfaction. The company recently completed a $6 billion revitalization program. Currently, an $8 billion global expansion plan is in place expected to be completed in the next three years.
With the latest opening, the company moved a step toward fulfilling its target to operate 500 Sheraton properties by 2015-end. Notably, the brand leads the company’s portfolio in Turkey, making it one of the largest European markets for the brand.
Stocks to Consider
Starwood currently retains a Zacks Rank #4 (Sell). Better-ranked stocks in the hotel industry are Huazhu Hotels Group Ltd. (HTHT - Free Report) and Marriott International, Inc. (MAR - Free Report) . While Huazhu Hotels boasts a Zacks Rank #1 (Strong Buy), Marriott has a Zacks Rank #2 (Buy). In the broader leisure services sector, investors may consider Wynn Resorts Ltd. (WYNN - Free Report) , sporting a Zacks Rank #1.