Marriott International Inc.
(
MAR
) recently revealed its intention to double is presence in the
Caribbean and Latin America by 2017. Currently, Marriott operates
69 hotels in 25 countries in that region. The hotelier sees
significant opportunities for growth in Latin America, which is
domestically under-hoteled to meet its future demand.
Presently, there are 35 Marriott hotels signed or in progress in
the Caribbean and Latin America. Already, 9 of Marriott's 18 brands
are prevailing in the region, combining all types of scale like
luxury, upscale, lifestyle, upper moderate and moderate.
Owing to the saturation in the U.S. market, major hoteliers are
exploring growth opportunities abroad. Some international markets
offer greater potential based on their higher pace of economic
growth. The U.S.-based companies are targeting fast-growing
emerging economies like Latin American regions and the
Asia-Pacific. The operating environment in those markets enables
hoteliers to grab a bigger share of the overseas pie.
Strong economic growth is driving the hotel expansion in Latin
America, overruling the high rate of inflation. In 2011, RevPAR for
the comparable systemwide properties increased 9.9 percentage
points year over year in the Caribbean and Latin America. The
stellar performance from this region is expected to continue in the
near future.
The middle income population in Latin America is growing. This
fraction of the population also has an inclination to spend on
travel and leisure. Apart from tourism, the region is successfully
emerging as a business hub. Moreover, a long-standing presence in
this country allows Marriott to have a stable relationship with
owners and developers across the country. All these factors testify
to Marriott's keenness to have one of the largest hotel development
pipelines in Latin America.
Brazilis set to witness a surge in demand fueled by the
resurgence of the middle class, and Marriott has plans to add a
handsome number of environmentally green Fairfields (moderate
brand) in the country over the next few years.
Additionally, a renowned consulting firm specializing in real
estate, Jones Lang LaSalle (
JLL
), had earlier commented that hotel investment in Brazil would be
around $2.4 billion by 2014. The consulting company predicted that
a large number of hotels would be constructed in the country to
cash in on the FIFA World Cup scheduled in 2014 and the Olympics in
2016.
However, the market is not free of competition. Several major
hoteliers like
InterContinental Hotels Group
(
IHG
),
Hyatt Hotels Corporation
(
H
) and
Starwood Hotels & Resorts Worldwide Inc.
(
HOT
) are poised to beef up their portfolio in that region.
HYATT HOTELS CP (
H
): Free Stock Analysis Report
STARWOOD HOTELS (
HOT
): Free Stock Analysis Report
INTERCONTL HTLS (
IHG
): Free Stock Analysis Report
JONES LANG LASL (
JLL
): Free Stock Analysis Report
MARRIOTT INTL-A (
MAR
): Free Stock Analysis Report
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