Marriott International Inc. (MAR), the largest U.S. hotel chain plans to expand its portfolio in Brazil to 54 hotels. Marriott currently manages 4 hotels in Brazil, with one hotel in Rio de Janeiro and three properties in Sao Paulo.
The Bethesda, Maryland-based Marriott plans to develop 50 Fairfield hotels throughout Brazil in partnership with PDG realty, which has become Brazil’s largest real estate company after merging with Agre in May 2010. PDG realty is based in Rio de Janeiro and Agre in Sao Paulo.
The company has introduced the Fairfield brand in Brazil. Fairfield has become a leader in the moderately priced lodging segment and is Marriott’s eighth brand to be developed outside the U.S.
The hotels will be designed for energy efficiency, and both Marriott and PDG Realty have agreed to contribute money for the Amazon rainforest preservation through the Amazonas Sustainable Foundation as each is hotel constructed.
Brazil is the largest country in South America. It is one of the world’s fastest growing major economies. Thus, management views expansion in Brazil as a great growth opportunity.
Marriott’s pipeline of hotels under construction internationally, pending conversion or approved for development totals nearly 95,000 rooms. The company expects to open about 30,000 rooms in 2010 and 25,000 to 30,000 rooms in 2011.
Marriott has a substantial development pipeline and is poised to benefit from the increase in demand for hotels in markets outside the U.S. Other than the Brazilian market, the hotelier is planning to expand its presence in India by opening 100 hotels over the next five years.
Moreover, Marriott plans to double its number of properties in China and Europe by 2015. Thus, we expect Marriott to considerably benefit from this strategic expansion, going forward.
Other hoteliers, which provide competition to Marriott, are Starwood Hotels & Resorts Worldwide Inc. (HOT), Hyatt Hotels (H) and Intercontinental Hotels Group plc (IHG).
HYATT HOTELS CP (H): Free Stock Analysis Report
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MARRIOTT INTL-A (MAR): Free Stock Analysis Report
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