Starwood Hotels & Resorts Inc. ( HOT ) is all set to reinvigorate its Le Meridien brand globally and plans to invest about $3 billion in both existing and new properties. Apart from a robust pipeline planned for the next year, Starwood also intends to invest another $1 billion to strengthen its world-class portfolio.
Acquired in Nov 2005, the French brand - Le Meridien rides on a high growth vehicle and already has a global presence with nearly 100 hotels in more than 40 countries. Well known for its upscale hospitality, management sees the brand as a lucrative target for further reinvigoration. The brand has considerable demand in North American markets.
Currently, the Le Méridien portfolio is stronger than ever before and continues to benefit from increasing popularity and deal signings. It has signed more deals in the past year than it did in the past four years taken together.
Prior to this, Le Méridien Hotels announced its plans to open 10 resorts and hotels by early 2014. Also, in March, this Zacks Rank #3 (Hold) company announced refurbishment projects at 13 Le Meridien hotels in the Middle East and Africa (MEA) regions. The project will cost approximately $200 million and will be completed in three years.
Over the past seven years, Le Meridien has undergone extensive makeover and restructuring. The brand has eliminated more than 40 properties since Starwood acquired it, while another 25 hotels underwent a facelift.
Hotel companies across the globe have been diligently working on their properties over the last couple of years to augment guest satisfaction and stay competitive. Hence, brand enhancement has become a trend today.
Le Meridien is not the only brand Starwood is focusing on. Last year, Sheraton, another of its brands, also went through a $6 billion brand-wide revitalization program.
Some other players in the leisure and recreational industry, which look attractive at current levels, include Life Time Fitness Inc. ( LTM ) and The Madison Square Garden Company ( MSG ), both carrying a Zacks Rank #2 (Buy). Another company, which sells recreational products, Sturm, Ruger & Co. Inc. ( RGR ) can also be considered as it carries a Zacks Rank #1 (Strong Buy).