White Plains, New York-based Starwood Hotels & Resorts Worldwide Inc. (HOT) is planning to strengthen its portfolio in Europe, Africa and the Middle East (EMEA) by opening 50 hotels over the next three to five years, of which 12 are expected to open in 2011.
Starwood plans to gain further foothold in Europe, as it is one of the fastest growing market in the EMEA region. The company expects to accelerate its expansion in the region by focusing more on the fast-growing Russian and Turkish market. Starwood plans to expand 60% in Turkey and 100% in Russia by the next three years.
Starwood enjoys a sector-leading position in the EMEA region with 240 hotels in 55 countries. Thus, we view its expansion in the EMEA region as a great growth opportunity.
Starwood is able to boost its expansion in the geographic region as the travelers are fond of the company’s design-led and luxury brands. Hence, Starwood continues to develop its luxury brands portfolio along with investments in its existing portfolio. The company is making an investment of $100 million for renovation of its hotels in Europe to enhance the brand.
Starwood has over half of its hotel properties outside the U.S., an international exposure that not many of its peers can boast, including Hyatt Hotels Corp. (H) and Intercontinental Hotels Group plc. (IHG). Additionally, over 80% of Starwood’s 85,000 room pipeline will be built in international markets. The company is poised to benefit from the increase in demand for hotels outside the U.S. Globally, the company expects to open 70 to 80 hotels in 2011.
Other than the EMEA region, the hotel company is planning to expand its presence in the Asia-Pacific market and Latin America. In Asia-Pacific, China promises immense growth potential with visits expected to double by 2014.
Outside the U.S., China is already Starwood’s largest country with 60 hotels representing eight of its brands. Starwood also expects to enhance its portfolio by 60% in India through 2013. In Latin America, the company expects to open 6 new hotels in 2011.
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