In order to ramp-up its presence across the length and breadth
Marriott International Inc.
), plans to unveil a new hotel in Chengdu in the Sichuan
province, under its Ritz-Carlton brand. It is the first
Ritz-Carlton branded hotel in South-West China. The property is
scheduled to open in 2013.
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The property will feature 353 rooms including 55 suites along
with various other facilities. Chengdu, being the capital of the
Sichuan province, is a strategic fit for the opening, thanks to
its unique location in Tianfu Square. The city is also a
major transportation hub in south-west China. Additionally, this
under-construction hotel is well-connected to the city's largest
commercial districts, which in turn is likely to augment its
demand from business travelers.
China is all set to bring about a recovery in global tourism and
by 2020, it is expected to be the world's largest travel
destination. Marriot, in order to capitalize on that opportunity,
seeks to double its presence in China in the next 3 years.
Incidentally, Sichuan is also the home to an endangered species
??? the giant panda. Tourists across the world come to visit this
specimen. Besides, the city of Chengdu has a glorious history of
over 2000 years. Its fine traditional handicrafts get valued both
at home and abroad, thereby attracting plenteous leisure
travelers. Thus, the city is an important cultural, economic, and
trading center. In February 2009, Chengdu was honored as one of
the "best tourist city in China" by China National Tourism
Administration and the World Tourism Organization (UNWTO).
At present, Chengdu is one of the most advanced cities in China
with less market saturation compared to other cities in
China. All these factors justify Marriott's decision to
expand in Chengdu. However, the company needs to be wary of its
Starwood Hotels & Resorts Worldwide Inc.
Intercontinental Hotel Group
), two of the company's closest peers, already have a strong
presence in the market.
We currently have a long-term Neutral recommendation on Marriott.
Also, it carries a short-term Zacks #4 Rank (Sell).