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Starwood Set to Open in Salvador - Analyst Blog
12/26/2012 9:40:00 AM
In order to beef up its Brazilian portfolio,
Starwood Hotels & Resorts Worldwide Inc.
) is all set to introduce another Sheraton property, one of its
upscale brands, in Salvador, Brazil. Under a franchise agreement,
GJP Hotéis & Resorts, a regional hotelier will operate the
property, which is slated for a first quarter 2013 opening.
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 shifting from the developed world to the rapidly growing economies and this transition has not escaped Starwood's notice. Latin America is one of those regions, which promises solid growth going forward. Therefore, Starwood sees more construction opportunities in Latin America with around half a billion people and an abundance of natural resources.
Among Latin American countries, Brazil is set to witness a surge in demand driven by the resurgence of the middle class. However, the market is not devoid of competition. A renowned consulting firm, Jones Lang LaSalle, specializing in real estate believes that hotel investment in Brazil will be around $2.4 billion by 2014.
According to the firm, a large number of hotels will be
constructed in the country to cash in on the FIFA World Cup,
which is scheduled in 2014 along with the Olympics in 2016. To
tap the opportunity, all of Starwood's peers
Hyatt Hotels Corp.
InterContinental Hotels Group
Marriott International Inc.
) are focused on Brazil. Starwood currently retains a Zacks #3
Rank (short-term Hold rating).
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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