Brown Palace Under Marriott's Roof - Analyst Blog


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Autograph Collection, one of the upscale brands of Marriott International Inc. ( MAR ), recently added Denver-based Brown Palace Hotel and Spa to its growing pool of independently owned and operated high-quality assets.

Founded in 1892, the Brown Palace Hotel will continue to be operated by Quorum Hotels & Resorts, which has been associated with the hotel since 1987. Financial terms of the deal were not disclosed.

The latest Brown Palace deal marks the 35th addition to Autograph Collection's global portfolio. Launched in January 2010, Autograph Collection's properties sprawl over the United States, Europe, the Caribbean and South America.

Since its opening, the brand has been gaining strong momentum. The fact can be validated by its RevPAR growth of 12% in fiscal 2011. Marriott expects to have more than 50 Autograph hotels opened by the end of 2012.

The concept boasts prestigious properties like Turnberry Isle Miami in Miami, Florida, The Algonquin Hotel in New York, New York, the Cosmopolitan of Las Vegas in Las Vegas, Nevada, and The Saint Hotel in New Orleans, Louisiana. Many owners are willing to renovate or reposition hotels in order to join the Autograph Collection and come under the Marriott brand.

We view the deal as strategically positive for both the parties. The deal paves the way for Brown Palace hotel to reap the benefit from Marriott's much greater scale, industry leading reservations and marketing system, as well as rewards loyalty program.

On the other hand, Marriott will enjoy the distinctive nature of the Denver's most sought-after hotel, consistent with the brand identity of Autograph Collection. Autograph Collection comprises properties that can be segmented into various categories. The wide variety in guest experience offered by these properties allows the brand to attract customers looking for a unique travel experience that other brands normally fail to offer.

Secondly, this partnership will extend Marriott's reach into the Colorado market, where tourism is the second largest industry, fueling the hospitality sector. This partnership will be Autograph's second venture in Colorado, Kessler Canyon being the first.

Denver itself is considered to be a prime destination for business and leisure travelers. With the presence of the Rocky Mountains as well as the prevailing cultural attractions and outdoor activities, Denver offers itself as one of the thriving markets in Colorado.

Marriott which competes with the likes of Starwood Hotels and Resorts Worldwide Inc. ( HOT ) currently carries a Zacks #3 Rank that translates into a short-term Hold rating. We are maintaining our long-term Outperform recommendation on the stock.

STARWOOD HOTELS (HOT): Free Stock Analysis Report
MARRIOTT INTL-A (MAR): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: HOT , MAR

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