In order to ramp up its presence in the flourishing Singaporean
market,
Starwood Hotels and Resorts Worldwide Inc.
(
HOT
) recently debuted its W brand at Sentosa Cove, Singapore in
collaboration with its owner and development partner - an affiliate
of City Developments Limited. The property highlights W brand's
43rd global and 7th Asia-Pacific opening.
Located in Sentosa, The new W hotel offers 240 guest rooms and
suites, and more than 1,500 meters of modern meeting space along
with several other amenities and enjoys a prime location. The
company also opened The Residences at W Singapore - Sentosa Cove,
featuring 228 ultra-deluxe residences. Starwood currently has three
other brands in Singapore - Sheraton, the St. Regis and Westin.
Singapore is one of the fastest growing economies in Southeast
Asia. According to a global market research company Euromonitor,
Singapore recorded gross domestic product (GDP) growth of 5% in
2011 on the top of a robust GDP growth of 14% in 2010. Moreover,
the country is a famous stop over for international fliers, which
boosts the demand for its hospitality industry.
With its rising importance in the global travel market, Singapore
is witnessing a gradual upward trend in the number of tourist
visits. According to Euromonitor, demand for casinos is also higher
in Singapore, especially due to travelers from Malaysia, Indonesia
and China.
Nearly five million people travel every year to Sentosa - a
renowned island resort in Singapore, making it a strategic fit for
new hotels. Close proximity to Singapore's central business
district as well as easy accessibility to various shopping centers
displaying international brands and travel destinations will help
the new W property at Sentosa attract both business and leisure
travelers.
Starwood remains on track to open about 60 W hotels globally by
the end of 2015. The brand was launched in 1998, in New York. The W
brand has a high growth trajectory and is already present in every
region including North America, Europe, Latin America,
Asia-Pacific, the Middle East and Africa.
The brand has been on an uphill ride in terms of revenue
generation, reflecting its strength and growing popularity. In the
second quarter of 2012, RevPAR growth at W was 7.3% or 8.8% in
constant dollars, second highest among all the other Starwood
brands.
However, the market is not free from competition. Many of
Starwood's peers like
Las Vegas Sands Corp.
(
LVS
),
Marriott International Inc.
(
MAR
) and
Hyatt Hotels Corp.
(
H
) have their presence in Singapore.
Furthermore, a sluggish macroeconomic environment acts as
another short-term deterrent. According to the Monetary Authority
of Singapore, the GDP growth is expected to be decelerating to 1-3%
in 2012.
Starwood 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.
HYATT HOTELS CP (H): Free Stock Analysis Report
STARWOOD HOTELS (HOT): Free Stock Analysis
Report
LAS VEGAS SANDS (LVS): Free Stock Analysis
Report
MARRIOTT INTL-A (MAR): Free Stock Analysis
Report
To read this article on Zacks.com click here.
Zacks Investment
Research