In order to beef up its Brazilian portfolio,
Starwood Hotels & Resorts Worldwide Inc.
) is all set to introduce another Sheraton property, one of its
upscale brands, in Salvador, Brazil. Under a franchise agreement,
GJP Hotéis & Resorts, a regional hotelier will operate the
property, which is slated for a first quarter 2013 opening.
Located in Salvador, one of the most important tourism hubs and a
significant port and business center of the country, the new
property will enjoy a prime location and is expected to attract
both business and leisure travelers. Sheraton Salvador is
scheduled to be unveiled after a renovation of the former Hotel
da Bahia. This will be the first Starwood property in Salvador.
Strategically positioned in the city center, the hotel also
provides easy accessibility to Sete de Setembro Avenue, an
important route that runs through the city. The reopened property
will feature 284 guest rooms including 16 suites, 27,000 square
feet of meeting space, 1,938 square feet of spa along with
several other amenities.
Currently, Starwood possesses seven properties in Brazil
including Sheratons and Four Points by Sheraton. Sheraton da
Bahia Hotel will mark the sixth Sheraton in the country, while
the seventh Sheraton - Sheraton Reserva do Paiva Hotel - which
will also be Starwood's ninth property in the country, is
scheduled to open by first quarter of 2014.
Owing to the saturation in the U.S market, major hoteliers are
exploring growth opportunities abroad. The current trend shows
that economic strength has been shifting from the developed world
to the rapidly growing economies and this transition has not
escaped Starwood's notice. Latin America is one of those regions,
which promises solid growth going forward. Therefore, Starwood
sees more construction opportunities in Latin America with around
half a billion people and an abundance of natural resources.
Among Latin American countries, Brazil is set to witness a
surge in demand driven by the resurgence of the middle class.
However, the market is not devoid of competition. A renowned
consulting firm, Jones Lang LaSalle, specializing in real estate
believes that hotel investment in Brazil will be around $2.4
billion by 2014.
According to the firm, a large number of hotels will be
constructed in the country to cash in on the FIFA World Cup,
which is scheduled in 2014 along with the Olympics in 2016. To
tap the opportunity, all of Starwood's peers
Hyatt Hotels Corp.
InterContinental Hotels Group
Marriott International Inc.
) are focused on Brazil. Starwood currently retains a Zacks #3
Rank (short-term Hold rating).
HYATT HOTELS CP (H): Free Stock Analysis
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.