Starwood Hotels & Resorts Worldwide Inc. is striving to tap better economic prospects and supply shortages in the emerging markets. The company recently opened its 200th Westin branded hotel — The Westin Chongqing Liberation Square — in China.
Starwood has plans to aggressively expand in the growing Chinese market with three Westin branded hotels to be unveiled in Zhoushan, Qingshui Bay and Hainan. The hotel chain also intends to open 9 Westin hotels worldwide in 2014 and nearly 30 by the end of 2016, around half of which will be in the Asia-Pacific region.
The tourism industry in Asia Pacific, especially China, is expected to grow year over year at the same or higher rate than the mature markets of the U.K., France or Japan, according to the World Travel and Tourism Council.
In fact, the emerging markets account for almost 70% of Westin’s development pipeline. Fueled by the growing affluent middle class, demand for hotels in China is rising continuously.
Apart from China, Westin remains on track to grow its portfolio in India by 50% in the next three years, beginning with the opening of The Westin Delhi NCR Noida next year.
Starwood also plans to capitalize on the growing demand in Indonesia by opening two hotels in the next two years. Tourism in Indonesia, especially Bali, is booming as Bali is gaining popularity among tourists over Thailand. The recent incident of the Malaysian jetliner further routed travel away from Malaysia toward Bali. Starwood intends to open The Westin Ubud Resort & Spa in Bali at the end of this year, in addition to launching the brand in Jakarta next year. Furthermore, Starwood plans to revisit the Philippines in 2016 after a gap of 12 years.
Westin’s focus is not limited to the emerging markets only. In fact, about two-thirds of Westin’s current portfolio and more than 25% of the brand’s pipeline focuses on the domestic market. These include the renovation of The Westin Crystal City and The Westin Cleveland Downtown followed by openings in San Jose, CA; Austin, TX; and Bethesda, Denver and Jackson, MS in 2015.
In Latin America, Westin has increased its footprint by over 80% in the past three years. Currently, there are 12 properties under the brand in markets such as Peru, Panama and Costa Rica and is strengthening its presence in Mexico.
Starwood currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same industry include Wyndham Worldwide Corp. , Hilton Worldwide Holdings Inc. (HLT - Free Report) and Marriott Vacations Worldwide Corp. (VAC - Free Report) . All these stocks sport a Zacks Rank #2 (Buy).