As part of its continued brand revitalization strategy,
Starwood Hotels & Resorts Worldwide Inc.
) plans to revamp its New York city portfolio in association with
its owner and developer partners. Each of Starwood's global
brands has a presence in New York City. The company's portfolio
in the city comprises 21 hotels. The refurbishment will cost
approximately $400 million.
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The properties to be renovated include the Sheraton brand's
flagship hotel - Sheraton New York Times Square Hotel, W New York
- Times Square, W New York - Union Square, W New York, The Westin
New York at Times Square and The Westin New York Grand Central.
New York City is one of the most sought-after locations and hosts
more than 50 million tourists each year. Since the city is
one of the prime destinations for leisure travelers and business
meetings, we believe the overhaul of these properties is a
Starwood is comprehensively working on its assets to offer an
enhanced travel experience to its guests. It is primarily
considering renovation of older properties in dynamic markets
like New York City, Seattle, Chicago, New Orleans and Los Angeles
in order to maintain consistency with the newer ones.
In Mar 2013, Starwood announced a refurbishment project worth
approximately $200 million at its 13 Le Meridien hotels in the
Middle East and Africa (MEA) regions. In Jun 2012, Starwood
announced that more than 10 North American properties of one of
its high-end brands, W, will undergo extensive makeover worth
more than $100 million in the coming 18 months.
In Nov 2012, Starwood completed an extensive makeover of four
Hawaiian properties under its largest brand, Sheraton Hotels
& Resorts for $230 million. Apart from these, there many
other assets that the hotelier has revamped in the recent past.
In a competitive environment, most hotel companies across the
globe have been making diligent efforts over the last couple of
years to augment guest satisfaction and gain a better foothold in
the industry. Hence, brand conversion and remodeling are the
order of the day.
Many of Starwood's peers like
Marriott International Inc.
InterContinental Hotels Group
) are also resorting to renovation. Though renovation work
affects near-term revenues, it boosts returns once completed.
Starwood currently carries a Zacks Rank #3 (Hold). Another
Wyndham Worldwide Corporation
) looks attractive at current levels with a Zacks Rank #2 (Buy).