Starwood Hotels & Resorts Worldwide Inc. (HOT) recently announced renovation plans for The Sheraton, New York, one of the largest hotels in New York City with 1,780 guest rooms and other amenities. The renovation will cost $150 million and will be completed in two phases.

The first phase will redesign 1080 guest rooms in The Sheraton New York Hotel and Towers by May 2011. The remaining rooms will be worked upon during December 2011 and April 2012. The project marks a milestone in Sheraton’s brand rejuvenation policy to enhance its global portfolio. This will be one of the largest renovation programs this year.

Being located in one of the world’s most popular tourist destinations, Sheraton at New York City remains a top choice for renovation. Sheraton is leading Starwood’s market share growth and represents the largest part of Starwood’s global growth pipeline. In the last three years, the brand has enjoyed a record level of guest satisfaction. This in turn translated into a 210-basis point gain in revenue per available room index in North America in 2010.

Recently, Sheraton completed a $6 billion brand-wide revitalization program, including $400 million in signature brand initiatives. Apart from the domestic market, the Sheraton brand is set to binge on the Chinese market, which promises huge long-term growth in global tourism. Sheraton remains committed to invest another $5 billion to add approximately 35 new hotels by the end of 2013, half of which will open in China.   

Sheraton’s emergence in China dates back to 1985 with the landmark debut of Great Wall Sheraton Hotel in Beijing. Leveraging its first-mover advantage, Sheraton has become one of China’s most sought after global brands. The company is now targeting various Chinese cities, which are under-penetrated but densely populated. One such city is Shantow. The company has sealed a deal to build a Sheraton hotel there. 

Starwood’s closest competitor Marriott International Inc. (MAR) is also eyeing China and seeks to double its portfolio in that country.

 
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