Starwood Hotels & Resorts Worldwide Inc.
) recently announced that it is on track to introduce a W brand
hotel in Panama City. This will mark the entry of W, one of the
high-end brands of Starwood in Central America. It is slated for
inauguration in early 2016.
The company has struck a deal with Evolution Tower Corp., a
joint venture between F & F Properties and EFC Group Inc., to
develop the new hotel. W Panama will feature 203 stylish guest
rooms including 24 suites, three Wow suites and one Extreme Wow
suite. The hotel also possesses two signature restaurants, a spa, a
nightclub, a WET pool deck, 8,400 square-feet fitness facility and
a meeting space of more than 21,000 square feet.
This new hotel marks Starwood's ninth hotel in Panama. Panama is
poised for growth in both business and tourism based on its ideal
location. Located on the southern most part of Central America,
this country is on the isthmus connecting North and South
According to Jones Lang LaSalle, the Panamanian economy grew
significantly in 2011, spurred primarily by the expansion of the
Panama Canal as well as residential and commercial construction.
Gross Domestic Product (GDP) and foreign investment grew by
approximately 10% and 30% year over year, respectively, over 2010.
Steady growth is likely to continue through 2012, though at a more
W Panama will be constructed on the 50
floor of Evolution Tower which is located in the heart of Panama's
financial district. This hotel is expected to have an impressive
impact on the Panama City skyline. Thus, we believe that the hotel
will enjoy one of the most strategic locations and drive traffic
from all over the world.
Starwood set a new trend in the hotel industry with its W Hotels
brand and has spread its operations globally. The company has
opened more than 42 W hotels worldwide since its inception in 1998.
The W Hotels brand is viewed as a trend setter and generally caters
to the young.
Starwood remains on track to spread its W operations globally
with more than 50 hotels by the end of 2012. 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's strength and growing popularity can be
validated by its strong RevPAR metric. In the second quarter of
2012, RevPAR growth at W was 7.3% or 8.8% in constant dollars, the
second highest among all the other Starwood brands.
The company is poised to benefit from the reviving economy and
consequent increase in demand for hotels. More than half of the
hotel's properties are located outside the U.S., an international
exposure that not many of its peers such as
Wyndham Worldwide Corporation
Hyatt Hotels Corporation
) can boast of.
Additionally, over 80% of the company's 95,000 room pipeline
will be built in international markets. The demand for hotels in
the international market is strong, as the pace of economic
recovery is particularly fast outside the U.S.
Starwood currently retains a Zacks #3 Rank, which translates
into a short-term Hold rating. We also reiterate our long-term
Neutral recommendation on the stock.
HYATT HOTELS CP (H): Free Stock Analysis Report
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WYNDHAM WORLDWD (WYN): Free Stock Analysis
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