As part of its continued brand revitalization,
Starwood Hotels & Resorts Worldwide Inc.
) recently completed an extensive makeover of four Hawaiian
properties under its largest brand Sheraton Hotels & Resorts.
The refurbishment cost was approximately $230 million.
This significant, multi-year project included refurbishments
worth $188 million at the Sheraton Waikiki, $6.5 million at the
Sheraton Maui Resort & Spa, $16 million at the Sheraton Kauai
Resort and $20 million at the Sheraton Kona Resort & Spa at
Keauhou Bay. The project was accomplished with the recent launch
of the Sheraton Kona Resort.
Since the last couple of quarters, Sheraton has been spearheading
Starwood's market share growth. The brand covers around 30% of
the company's current total global pipeline. Recently, Sheraton
concluded a $6 billion brand-wide revitalization program and is
now working on a three-year $6 billion international expansion
Hotel companies across the globe have been diligently working
over the last couple of years to augment guest satisfaction to
uplift their positions in a cutthroat environment. Hence, brand
conversion and remodeling has become a trend today.
Many of Starwood's peers like
Marriott International Inc.
InterContinental Hotels Group
) are also resorting to the same strategy. Though renovation work
affects near-term revenue, it boosts returns once completed.
Starwood is comprehensively working on its assets to offer an
enhanced travel experience to its guests and primarily
considering for renovation older properties operating in dynamic
Hawaii is a popular destination for leisure travelers.
Additionally, the Hawaii Tourism Authority (HTA) intends to
market this region as a business hub, as tourism is the prime
source of private capital in Hawaii.
As per HTA, total visitor spending climbed 10.8% year over year
to $12.07 billion in 2011. This year business data for the month
of September 2012 also reaffirms the trend, with total visitor
spending increasing 15.6% to $146.5 million. Total arrivals in
September grew 6.1% as well. Further, total tourists arrivals are
expected to grow 9.4% in 2012. Hawaii is thus a flourishing
business zone with the hospitality sector a major
White Plains, New York-based Starwood currently retains a
Zacks #3 Rank that translates into a short-term 'Hold' rating. We
also reiterate our long-term 'Neutral' recommendation on the
STARWOOD HOTELS (HOT): Free Stock Analysis
INTERCONTL HTLS (IHG): Free Stock Analysis
MARRIOTT INTL-A (MAR): Free Stock Analysis
To read this article on Zacks.com click here.