In order to ramp up its presence in the flourishing Chinese
Starwood Hotels & Resorts Worldwide Inc. (
) recently launched its Sheraton brand with the opening of the
Sheraton Fuzhou Hotel in Fujian province. This marked the entry of
Sheraton, one of the high-end brands of Starwood in Fuzhou - the
capital of Fujian province.
The new hotel opening depicts the extensive expansion plan of
Starwood in China. Starwood's China business remains on track to
triple within five years. This new hotel marks the second Starwood
property in the city. The first was The Westin Fuzhou Minjiang
hotel under its iconic Westin brand.
Located in the northeast coast of Fujian province, Fuzhou lies in
the lower reaches of Minjiang River and connects with other cities
of the province like Nanping, Quanzhou and Putian. Fuzhou is the
major economic, political and transport center hub of the Fujian
province. The city is also well-known for its local cuisine,
cultural and historical background.
The tourism industry in Fuzhou has been rapidly developing, with
over 80 hotels serving the domestic and international tourists.
Moreover, Fuzhou is poised for growth in both business and tourism
on account of its ideal location. To boost its tourism industry,
Fuzhou government has planned a town which will be a blend of
cultural performances, a theme park, a theme hotel and leisure
amenities. The project is slated to open in October 2012.
Owned by Zhonggeng Group, The Sheraton Fuzhou Hotel comprises of
more than 350 rooms and suites. It comprises essential basic and
modern amenities for both business and leisure travelers.
Positioned in the heart of Fuzhou's newly developed commercial
district, the hotel is conveniently accessible to Fuzhou Changle
International Airport and major commercial and industrial zones of
the city. The hotel also well connected to the several popular
sightseeing spots of the city.
Sheraton's entry to China dates back to 1985 with the debut of
Great Wall Sheraton Hotel in Beijing. Leveraging its first-mover
advantage, Sheraton has become one of China's most sought-after
global brands. Given a surge in demand, Starwood is slated to open
around 10 new Sheraton hotels by the year-end. The company is now
scrutinizing its opportunities in various untapped but highly
populated Chinese cities. Starwood recently inaugurated another
Sheraton property - Sheraton Qingdao Jiaozhou Hotel - near Qingdao
city in the Shandong province, China.
China is all set to bring about a recovery in global tourism, and
by 2020, it is expected to be the world's largest travel
destination. Though Starwood's current U.S. portfolio is roughly
seven times the number of hotels in China, the company expects
China to outpace the U.S. in the near future. We believe that
openings in second and third tier Chinese cities will provide the
company a competitive advantage over most of its peers.
Last year, Starwood shifted a management team to China to
understand the market more closely through interactions with local
stakeholders, while exploring new opportunities throughout the
country. However, Starwood should be wary of its competitors.
Hyatt Hotels Corporation (
opened its debut hotel - Hyatt Regency Chongqing - under its Hyatt
Regency Brand in Southwest China.
Starwood currently retains a Zacks #2 Rank that translates into a
short-term 'Buy' rating. However, we are maintaining our long-term
"Neutral" recommendation on the stock.
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