As a part of its continued brand revitalization initiative,
Marriott International Inc.
) has recently come up with an extensive makeover program for its
New Orleans property at a cost of around $4.5 million.
Situated at French Quarter, a place full of historic attractions,
the hotel enjoys excellent positioning. The location of the
property, adjacent to Bourbon Street, also ensures easy access to
major sightseeing locations of the city. Also, its proximity to
the business district makes the property far more lucrative to
business travelers. New Orleans is touted as one of the prime
U.S. tourist spots.
According to the New Orleans Convention & Visitors Bureau
('CVB'), this city received 4.9 million visitors in the first
half of 2012, up 2.0% over the same period in 2011, who spent a
total of $3.45 billion, an increase of 11.0% on a comparable
New Orleans has also recorded the biggest increase in occupancy
during the week 16-22 December 2012, according to Smith Travel
Research. In terms of revenue per available room (RevPAR), New
Orleans also posted the highest increase during the same time
frame. Citing the prospect, Marriott planned to revamp the New
Orleans hotel, already featuring 80,000 square feet of meeting
area and 1300 rooms.
In a competitive environment, most hotel companies across the
globe have been making diligent efforts over the last couple of
years to augment guest satisfaction and gain a better foothold in
the industry. Hence, brand conversion and remodeling has become a
trend today. Many of Marriott's peers like
Starwood Hotels & Resorts Worldwide Inc.
InterContinental Hotels Group
) are also walking the same path.
Renovation work, however, hurts near-term revenue when
construction is on. But after the overhaul work, existing
properties pay off more.
Marriott is comprehensively working on its assets to offer an
upgraded travel experience to its guests. At present, several
properties like Marriott St. Louis International Airport, Essex
House at Manhattan, Marriott's managed Residence Inn and
Courtyard portfolios in the United States are going through an
extensive renovation program, which will likely boost RevPAR once
Marriott currently carries a Zacks #4 Rank (short-term Sell
rating).We reiterate our long-term Neutral recommendation on the
shares of Marriott.
STARWOOD HOTELS (HOT): Free Stock Analysis
INTERCONTL HTLS (IHG): Free Stock Analysis
MARRIOTT INTL-A (MAR): Free Stock Analysis
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