The leading worldwide hospitality company,
Marriott International, Inc. (
recently entered into a partnership with Overseas Private
Investment Corporation (OPIC) for the development of
environment-friendly hotels in the emerging economies of Middle
East, Africa, Latin America and the Caribbean.
OPIC is the development finance institution of the U.S.
Government and helps businesses to expand in the emerging markets,
driving jobs, revenues and growth opportunities both on national
and international fronts. OPIC provides investors with financing,
guarantees, support and other services for private equity
The partnership is poised to generate cash for OPIC to finance
Marriott's international hotel development projects, thereby
acknowledging the partnership's covenant to the environment and
investment in the emerging markets. OPIC intends to generate up to
$200 million in total for financing the hotel projects.
According to a recently signed Memorandum of Understanding (MOU)
between the two parties, OPIC will provide long-term loans to the
third party owners of the Marriott's 14 lodging brands, including
Marriott Hotels & Resorts, Courtyard and Fairfield hotels. The
company will put forward flexible loan terms and approval process,
which can be altered based on local conditions and regulations.
Alongside, Marriott will render management or franchising services
for hotels under separate agreements.
The new alliance is anticipated to develop hotels in areas
having dearth of water and energy resources. The hotels will be
well equipped to comply with environmentally-sustainable standards
such as the U.S. Green Building Council's LEED (Leadership in
Energy & Environmental Design) program, if available, or in
accordance with other respected global or regional
Since 2008, Marriott is committed to sustaining the environment
through a number of initiatives. It has donated $2 million to the
Amazonas Sustainable Foundation to protect 1.4 million acres of
Brazilian rainforest. Recently, the company also announced its
upcoming hotels in Brazil to contribute $0.5 million to assist the
REDD+ (Reduced Emissions from Deforestation and Degradation)
project. By 2020, Marriott aims to reduce energy and water
consumption by 20% and convert its multi-billion hotels chains to
environment friendly hotels.
Owing to the saturation in the U.S market, major hoteliers are
exploring growth opportunities in the international markets. The
current trend shows that the economic balance of power has been
shifting from the developed world to the rapidly growing economies
and this transition has not escaped Marriott's notice.
However, Marriott's competitors are also in an expansion mode
and this is something to be wary of. Recently,
Starwood Hotels & Resorts Worldwide Inc. (
also announced opening of several hotels in Middle East, Africa,
Latin America and Caribbean regions. Several other major hoteliers
InterContinental Hotels Group (
Hyatt Hotels Corp. (
are also poised to beef up their portfolio in that region, thus
making the market competitive.
Based in Bethesda, Maryland, USA, Marriott operates and
franchises hotels under 15 brands including Marriott, The
Ritz-Carlton, JW Marriott, Bulgari, EDITION, etc. It also has
licensed vacation ownership resorts under three additional brands:
Marriott Vacation Club, Grand Residences by Marriott, and The
Ritz-Carlton Destination Club. As of now, it has more than 3,700
properties in 73 countries and territories.
We presently have a long-term Outperform recommendation on
Marriott, which holds a Zacks #2 Rank signifying a short term 'Buy'
HYATT HOTELS CP (H): Free Stock Analysis Report
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