Marriott International, Inc.’s (MAR - Free Report) consistent efforts to expand its presence worldwide and capitalize on demand for hotels in international markets are commendable. Recently, the company acquired the 1,000-room Sheraton Grand Phoenix hotel for $255 million.
Marriott plans to renovate the hotel, which will begin in 2019. Apart from meeting space of nearly 77,000 square feet, the hotel has a fitness and business center along with lobby restaurants and poolside bar.
Marriott’s president and CEO, Arne Sorenson said “The hotel will provide a living and breathing showcase of our new vision for the Sheraton brand, underscoring our commitment to restore the brand to its leadership position.”
Currently, Marriott’s Sheraton brand operates about 450 hotels in over 70 countries across the globe. We note that Marriott is consistently trying to expand its presence in international and domestic market to capitalize on growing demand for hotels. Notably, after announcing the acquisition of Starwood Hotels & Resorts on Sep 23, 2016, Marriott has become the world’s largest hotel company spanning across 127 countries, with more than 6,500 properties.
In fact, Marriott’s extensive portfolio and a strong brand position allows it to charge a premium room rate in the highly competitive lodging industry. Given its property locations, we believe that the company is well poised to benefit from increasing market demand owing to stepped-up business as well as leisure traveling in major North American and international locations. Furthermore, Marriott is expected to benefit from a steady rise in business and leisure travel, and higher transaction volumes in the near as well as long term. Also, global travel is estimated to increase at a 7% compounded rate over the next 10 years and international trips expected to top 1.8 billion by 2030.
Marriott currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In a year’s time, the stock has gained 24.8% compared with the industry’s 11.8% increase. Apart from Marriott, stocks such as Hyatt Hotels Corporation (H - Free Report) , Extended Stay America (STAY - Free Report) and Hilton Worldwide Holdings Inc. (HLT - Free Report) , which belong to the same industry, have witnessed growth of 36.1%, 11% and 26.5%, respectively.
Although headwinds persist in the form of lingering political uncertainty in key international markets and currency headwinds, Marriott is well poised to grow in the long term backed by its continual expansion efforts and an unmatched portfolio of lodging brands.
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