Latin America seems to be fast developing into an attractive market for the world’s most reputed hoteliers. Marriott International, Inc. (MAR - Free Report) became the latest among the major hoteliers to join the bandwagon by announcing the opening of Renaissance Santiago Hotel. This property will be the third Renaissance branded hotel in South America.
The hotel will be owned by Altamira Grupo Inmobiliario, a Chile-based real estate development company and operated by Administraciones y Operaciones Hoteleras Hotech S.A.
The Renaissance Santiago Hotel, located in the chic neighborhood of Vitacura, is surrounded by fashionable boutiques and some of the city’s finest restaurants. In our view, the hotel’s location will be a major trump card for its success. The 181-room hotel has a restaurant, Fitness Center & Spa, outdoor pool and whirlpool.
Renaissance Hotels, one of Marriott International's growing brands, is also its flagship lifestyle branded global hotel chain. The brand is expected to total almost 170 hotels over 40 countries by the end of 2014.
Latin America’s Tourism Boom
The continuous GDP growth, steady influx of direct foreign investment to high growth markets and the growing middle class with sufficient disposable income have improved tourism in Latin America. Additionally, the emergence of Chile as a leading economy in Latin America has prompted Marriott to capitalize on the tourism boom in the country.
These factors and the greater resilience of the emerging economies to recession have strengthened the region’s growing dominance on the world tourism business and its potential as a hospitality market. Marriott’s intention to invest in the emerging Latin American markets can also be seen as an attempt to gain greater market share than would be possible in the mature economies.
Similar to Marriott, another leading hotelier Starwood Hotels & Resorts Worldwide Inc. recently announced its plan to open 17 hotels in the Latin American region by 2016, thereby increasing its portfolio by 20%.
Stocks to Consider
Marriott currently carries a Zacks Rank #2 (Buy). A better-ranked stock in the same industry is The Marcus Corporation (MCS - Free Report) , sporting a Zacks Rank #1 (Strong Buy). In the broader leisure services sector, Las Vegas Sands Corp. (LVS - Free Report) , which carries the same Zacks Rank as Marriott, is also worth considering.