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Marriott (MAR) Unveils Large-Scale Expansion Plans in Mexico

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The world’s largest hotel company, Marriott International, Inc. (MAR - Free Report) recently announced the signing four new hotels in Mexico.

One of the hotels is Westin, – one of Marriott’s 30 leading brands –, and is situated in the city of Puebla. The property will be owned by IDEURBAN and is slated to open in the second half of 2018. The Westin Puebla joins Westin brands’ existing properties in three cities across Mexico. Two more hotels of the brand are in the development pipeline. Featuring 142 guestrooms, the property will be located in one of Puebla’s most important business district and will encompass amenities like a spa, a fitness centre, a pool and an office space.

Another hotel slated to open together with Marriott’s franchise partner Grupo Diestra is The Renaissance Cancun. The 180-room hotel marks the Renaissance brand’s entry into Mexico and is strategically located between Cancun’s Hotel Zone and its downtown area.

Meanwhile, Aloft brand’s Aloft Puebla will be joining two existing hotels of the brand in Mexico. Scheduled to open in late 2018, the property will bring Aloft brand’s tech-forward, lively experience to one of Mexico’s leading industrial cities. The hotel will feature 100 loft-style rooms, a gym, a café and the industry’s first keyless entry system that enables guests to use their smartphone or Apple watch as a room key.

The fourth hotel in the pipeline is the AC Hotel by Marriott Monterrey. Located in a high-end neighborhood of Monterrey called Valle Oriente, the hotel marks the AC Hotels brand’s second property in Mexico after the opening of AC Hotel Guadalajara in August this year.

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Notably, Marriott is following an aggressive expansion strategy in the Caribbean and Latin American region, driven by a solid increase in the demand for business and leisure travel to this part of the world. Currently, the company’s portfolio includes over 200 hotels in the region, spanning across 33 countries and territories.

Mexico exists as one of the key markets in this region and the company currently has 70 hotels there. Moreover, by 2022 the company plans to open 38 additional properties in Mexico.

However, due to its huge international presence, Marriott is susceptible to large-scale foreign exchange headwinds. Furthermore, lingering political uncertainty in key international markets are affecting most of the hoteliers including Hyatt Hotels Corporation (H - Free Report) , Hilton Worldwide Holdings (HLT - Free Report) , etc. and might restrict revenue growth at Marriott too.

Marriott currently has a Zacks Rank #4 (Sell).

A better-ranked hotel stock is Red Lion Hotels Corporation (RLH - Free Report) whose current year growth estimate is pegged at 48.7% compared with the industry average of 23.8%. It carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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