In order to ramp up its presence in Russia and the Commonwealth
of Independent States (CIS),
Starwood Hotels and Resorts Worldwide Inc.
) recently collaborated with Remstroyintour LLC and Ludmila
Kudryavtseva to unveil one of its contemporary hotel brands, Aloft,
in Russia in 2015.
Starwood currently operates five hotels in Russia and CIS under the
brands of Luxury Collection, Sheraton, W and Four Points by
Sheraton. Management now plans to more than double its portfolio in
that region by 2015 with seven new hotels.
Located in St. Petersburg, the new Aloft hotel will feature 200
guestrooms, along with several other amenities. St. Petersburg,
which is often known as the "Venice of the North" and most visited
by tourists during the White Night Festival, is a strategic fit for
Starwood also has a W hotel in St. Petersburg. Further, the
location is a promising business destination enabling the
properties to attract both leisure and business travelers.
Starwood has set a new trend in hotel designs with one of its
lifestyle brands Aloft. Aloft has spread its operations globally
with more than 60 hotel openings since its launch in June 2008. The
brand rides on a high growth trajectory and has already left its
mark in every region including North America, Europe, the Middle
East, Latin America, India, Southeast Asia and China.
In the second quarter of 2012, RevPAR growth in Aloft was 8.7% or
9.7% in constant dollars, the highest among all the other brands.
The urban concept of Aloft mainly caters to the modern travelers
seeking a unique experience. Its affordable price point in the
mid-market hotel category is another reason for the growing
Since the U.S. market is somewhat saturated, hoteliers are tapping
international opportunities especially in the faster growing
emerging markets. Starwood sees a huge untapped potential in the
secondary and tertiary markets across Russia and CIS, where the
mid-market category is under-served.
According to Starwood, Moscow is one of the richest cities in the
world with a healthy population of billionaires. The middle income
population in Russia is also growing. This fraction of the
population has an inclination to spend on leisure. Additionally,
with its rising importance in the global travel market, the pent-up
demand considerably lags the current availability of just 28-
Starwood which competes with the likes of
Marriott International Inc.
), currently retains a Zacks #3 Rank, which translates into a
short-term Hold rating. We are also maintaining our long-term
Neutral recommendation on the stock.
STARWOOD HOTELS (HOT): Free Stock Analysis
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