Starwood Set to Open in Salvador - Analyst Blog


In order to beef up its Brazilian portfolio, Starwood Hotels & Resorts Worldwide Inc. ( HOT ) 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. ( H ), InterContinental Hotels Group ( IHG ) and Marriott International Inc. ( MAR ) are focused on Brazil. Starwood currently retains a Zacks #3 Rank (short-term Hold rating).

HYATT HOTELS CP (H): Free Stock Analysis Report

STARWOOD HOTELS (HOT): Free Stock Analysis Report

INTERCONTL HTLS (IHG): Free Stock Analysis Report

MARRIOTT INTL-A (MAR): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: H , HOT , IHG , MAR

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