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Marriott Debuts in Kazakhstan

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The Ritz-Carlton Hotel Company, LLC, a wholly owned subsidiary of Marriott international Inc. (MAR - Free Report) , recently announced the opening of its first luxury hotel The Ritz-Carlton, Almaty in Kazakhstan. The hotel is slated to open in late 2013.

The move is in line with the company’s strategy to expand its footprint in the CIS (Commonwealth of Independent States) by developing 11 hotels by 2015. The company currently operates 19 hotels in the CIS across six luxury lodging brands including The Ritz-Carlton, JW Marriott, Renaissance Hotels and Courtyard by Marriott.

The Ritz-Carlton, Almaty is a 145-room hotel in center of Almaty city.  The hotel is positioned in the Esentai Tower within a development project park of the same name. Esentai Tower is a 37-storey mixed-use building in Kazakhstan and boasts offices of industry-leading companies such as HSBC Holdings plc and Credit Suisse Group (CS - Free Report) . The hotel has 10,000 square feet of meeting space and is primarily designed for business travelers.

Marriott has 10 more hotels slated to open in the CIS over the next three years. They are -- Krasnodar Marriott Hotel, Moscow Marriott Novy Arbat Hotel, Marriott Krasnaya Polyana Hotel, JW Marriott Sochi Golf Resort, Courtyard by Marriott Sochi Plaza Hotel, Krasnoyarsk Marriott Hotel and Voronezh Marriott Hotel in Russia; Tsaghkadzor Marriott Hotel in Armenia; Baku Marriott Amburan Beach Resort in Azerbaijan; and Renaissance Kiev Hotel in Ukraine.

Almaty, the ex-capital and the largest city of Kazakhstan, is located in the southeastern part of the country. The city is also the major business and cultural hub of Kazakhstan. Increased tourist inflow has led to an emerging tourism industry in Almaty. The city mainly attracts visitors from Russia, China, Turkey, South Korea and Germany. According to the Almaty Tourism Information Center, the tourism industry has generated a value of 17 billion tenge ($115 million) during the first half of 2012, while hotel booking services amounted to 15 billion tenge ($101.4 million).

All these factors support the Marriott decision to expand in Almaty. However, the company needs to be wary of its competitors. Hyatt Hotels Corporation (H - Free Report) and Intercontinental Hotels Group plc (IHG - Free Report) have held a strong presence in the city for years.

We currently have a long-term Neutral recommendation on Marriott. Also, it carries a short-term Zacks #3 Rank (Hold).

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