In order to strengthen its presence further in China, the
leading global hotel chain
Starwood Hotels & Resorts Worldwide, Inc.
) has recently declared that it is on the verge of unveiling 20
new hotels in the region in this year. This will lead to the
opening of one hotel every 20 days on an average in China.
Starwood has been focusing on this rapidly growing economy for
quite some time. The global hotel chain sees more development
opportunities in China with around 1.3 billion people and its
emergence as a business hub.
As per the United Nations World Tourism Organization (UNWTO),
China promises immense growth potential, with visits expected to
increase substantially by 2014 making it the world's leading
tourist destination by 2020. The affluent middle class population
in China, which is 25% of the region's total population, caught
the attention of Starwood.
Starwood enjoys a first-mover's advantage in China as it
opened the first branded hotel, The Great Wall Sheraton Hotel, in
Beijing way back in 1985 and is preparing to take a lead with a
pipeline, significantly larger than other hoteliers such as
Marriott International Inc.
Hyatt Hotels Corporation
Wyndham Worldwide Corporation
Over the past three years, Starwood's Chinese portfolio has
increased two-folds to 120 properties. Nearly 100 hotels are
under construction, 70% of which belong to the tier 1 and tier 2
cities. Leveraging its first-mover advantage, Starwood has become
one of the most sought-after global brands in the company's
second largest hotel market, China.
Starwood intends to double its luxury portfolio in China
within a few years to cash in on the increasing demand for luxury
hotels. Among all other Chinese cities, Beijing and Shanghai are
expected to lead the growth trajectory. Starwood is also focusing
on improving its loyalty program, Starwood Preferred Guest (SPG)
to attract more guests. Currently, of SPG's total members, 50%
belongs to China.
On the flip side, although China promises solid growth,
Starwood witnessed weak results in the region in 2012. However,
we believe that following the Chinese government's leadership
transition the company's business will improve in the future.
HYATT HOTELS CP (H): Free Stock Analysis
STARWOOD HOTELS (HOT): Free Stock Analysis
MARRIOTT INTL-A (MAR): Free Stock Analysis
WYNDHAM WORLDWD (WYN): Free Stock Analysis
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