As part of its continued brand revitalization strategy, Starwood Hotels & Resorts Worldwide Inc. plans to revamp its 13 Le Meridien hotels in the Middle East and Africa (MEA) regions. The refurbishment will cost approximately $200 million and will be completed in three years.
Acquired in Nov 2005, the French brand – Le Meridien rides on a high growth vehicle and already has a global presence with nearly 100 hotels in more than 40 countries. Well known for its upscale hospitality, management sees the brand as a lucrative addition to its luxury hotels. The brand has considerable presence in emerging Middle Eastern and African markets for more than 30 years.
Apart from renovations, Le Meridien will include another property to its already four-propertied portfolio in Egypt. This new hotel – Le Meridien Cairo Airport – is slated to open in Sep 2013. The emergence of the MEA region as an international business hub as well as leisure travel destination encourages Starwood to focus on this region.
Hotel companies across the globe have been diligently working on their properties over the last couple of years to augment guest satisfaction to raise their positions in a cutthroat environment. Hence, brand conversion and remodeling has become a trend today.
Many of Starwood’s peers like Marriott International Inc. (MAR - Free Report) and InterContinental Hotels Group (IHG - Free Report) are also resorting to the renovation strategy. Though renovation work affects near-term revenues, it boosts returns once completed.
Starwood is comprehensively working on its assets to offer an enhanced travel experience to its guests and is primarily considering renovation of older properties operating in dynamic markets.
Starwood currently carries a Zacks Rank #3 (Hold). Choice Hotels International Inc. (CHH - Free Report) looks attractive at current levels with a Zacks Rank #2 (Buy).