Westin, one of the upscale brands of
Starwood Hotels & Resorts Worldwide Inc.
) is set to unveil a property in San Jose, California in July 2013.
The upcoming property will be a renovated and rebranded national
historic hotel called the Sainte Claire which was set up in 1926.
The new hotel will feature 10,000 square feet of meeting space
along with numerous other amenities.
Starwood set a new trend in hotel designs with its Westin brand
and has spread its operations globally with more than 186 hotels in
over 36 countries. Westin continues to be a star performer and
immense opportunities for conversion are prevailing around
different markets across North America.
The brand rides on a high growth trajectory and has already
spread globally, with properties in North America, Europe, Latin
America, India, Southeast Asia and China. Management appears
optimistic on the brand as it has significant refurbishment in
progress at the Westin Peachtree, Atlanta. In the first quarter of
2012, RevPAR growth at Westin was 7.2% or 7.6% in constant dollars,
the third highest among all the other brands.
Westin, which falls into the Luxury category, has seen success
in the international market and remains on track to open its 200th
property within the next one year. In fact, since luxury resorts
have a higher demand abroad, Starwood has 90% of its Luxury
pipeline outside North America.
We believe San Jose is a strategic fit for new hotels, as it is
an important business destination. The hotelier is all set to tap
the market, as the area attracts business travelers due to the
presence of high-tech companies like
) in adjoining areas. Further, the property is in proximity to
several popular sightseeing and cultural spots. Starwood's major
Hyatt Hotel Corp.
Marriott International Inc.
) also have a considerable presence in Silicon Valley.
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.
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