To expand its footprint in the Caribbean, Marriott International, Inc. (MAR - Free Report) has agreed to acquire Elegant Hotels Group. The value of the deal is at 100.8 million pounds ($130.1 million) or $199 million including debt.
Elegant Hotels owns and operates seven properties (588 rooms), of which six are located along the prestigious west coast of Barbados.
President and Chief Executive Officer, Marriott International, Arne Sorenson stated, “The addition of the Elegant portfolio will help us further jumpstart our expansion in the all-inclusive space, while providing more choices on the breathtaking island of Barbados for our 133 million Marriott Bonvoy members.”
Post completion of the deal, Marriot will renovate Elegant Hotels portfolio. Also, the company will likely operate these hotels as all-inclusive resorts under one or more of Marriott's collection brands.
Expansion Strategy to Drive Growth
Marriott is consistently trying to expand its presence worldwide and capitalize on the demand for hotels in international markets. Moving ahead, the company plans to significantly expand its global portfolio of luxury and lifestyle brands. It is also trying to expand in Asia, Latin America, Middle East and Africa. Recently, the company witnessed consistent growth in its European pipeline. Also, Marriot aims to strengthen its position in the luxury and full-service segments in the region.
Considering its diverse property locations, the company is poised to benefit from increasing market demand on the back of stepped-up business as well as leisure traveling in major North American and other international locations. With global travel estimated to increase at a 7% compounded rate over the next 10 years, international trips are anticipated to top 1.8 billion by 2030.
Given the steady rise in business and leisure travel as well as higher transaction volume, Marriott is all set to grow in the near and the long term. Shares of Marriott have gained 11.5% so far this year compared with the industry’s 14.6% rise.
We also believe that continued addition of hotels will enable Marriott counter intense competition from the likes of Choice Hotels (CHH - Free Report) , Hilton (HLT - Free Report) and Hyatt (H - Free Report) .
Marriott currently carries a Zacks rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank stocks here.
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