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Starwood Broadens Mexican Exposure - Analyst Blog
7/22/2013 4:20:00 PM
Starwood Hotels & Resorts Worldwide Inc.
) is set to beef up its Mexican portfolio. The company recently
announced plans to extend its hotel base in the region by
30%. Starwood has a considerable presence in Mexico.
Featuring 24 hotels under 8 brands, Mexico is Starwood's biggest
market in Latin America.
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 slowly shifting from the developed world to the rapidly growing economies and this transition has not escaped Starwood's notice. Going by this trend, Central and South America promise solid growth going forward.
Among Latin American countries, Mexico is set to witness a surge in demand driven by the resurgence of the middle class, a fraction of which spends considerably on travel and leisure. Apart from tourism, the region is also emerging as a business hub. Also, lower crime rates in the country have ensured that U.S.-groups are once again taking an interest in Mexico.
Solid performance in Mexico led the company to post flat revenue per available room (RevPAR) in Latin America in the first quarter of 2013, despite the Argentinian issues. Mexican RevPAR was up 10%. The region is expected to continue performing well in the near future.
Moreover, thanks to a long-standing presence in this country, Starwood enjoys a stable relationship with owners and developers across the country. Therefore, Starwood sees more construction opportunities in Mexico with an abundance of natural resources.
Pent-up demand both in the luxury and mid-market segment in
Mexico is making Starwood broaden its exposure in that country.
However, this Zacks Rank # 1 (Strong Buy) should be wary of its
competitors, as major hoteliers like
Marriott International Inc.
InterContinental Hotels Group
Hyatt Hotels Corp.
) too have a considerable presence in Mexico.
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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