Marriott International Inc. (MAR), the largest U.S. hotel chain, is set to expand its presence in India by opening 100 hotels over the next five years. Marriott currently manages 11 hotels in India, represented by five brands. The company will add two more brands across India, including Ritz Carlton and Fairfield Inn.
Marriott opened its first hotel in India in 1999 and currently has 23 additional properties under construction or development in India. The company expects to complete the construction and open all 23 properties by the end of 2013. The company believes that the expansion will create over 8,000 new jobs in India in the next three years.
The company has also recently signed management agreement for seven additional hotels for its portfolio in India, which include five Courtyard properties, a Marriott hotel and a Renaissance property. In the next three years, with all the developments under pipeline, the company’s portfolio in India is expected to quadruple with 41 properties.
According to the company, India has the second largest hotel development pipeline in Asia. Moreover, the number of branded hotel rooms over the next three years is expected to double in Asia. Thus, management views expansion in the Indian market as a great growth opportunity for the company.
Marriott joins the group of other hoteliers such as Starwood Hotels & Resorts Worldwide Inc. (HOT) and Hyatt Hotels Corp. (H) in increasing its presence in the Indian market.
The demand for hotels is greater in the international market than in the U.S., especially in the Asia-Pacific region, where the pace of economic recovery is particularly fast.
In the Indian market, the demand for hotels considerably outpaces the supply. Additionally, India is expected to experience a meaningful increase in gross domestic product (GDP) within the next few years.
The burgeoning of the middle income group also results in an increase in domestic travel and efforts are underway to increase international tourism. This is attracting the major hoteliers to expand their Indian presence.
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