Starwood Hotels & Resorts Worldwide Inc. (HOT) recently announced the brand conversion of an existing Clarion property at San Francisco Airport to Aloft. The property will undergo a major makeover before being unveiled as an Aloft in summer 2012. The 253-room hotel is owned by Starwood.
The property enjoys a prime location, adjacent to San Francisco International Airport, which is one of the world’s busiest travel hubs. This makes it strategically fit for conversion.
Starwood has set a new trend in hotel designs with the Aloft brand and has spread its operations globally with more than 50 hotels that it opened since its launch in June 2008. Aloft has consistently reported high guest satisfaction scores, reflecting the brand’s strength and growing popularity.
In its three-year journey, Aloft has generated revenue per available room (RevPAR) results nearly equal to its largest competitor. Through this latest conversion, a new market will experience the flavor of Aloft more rapidly with less capital investment. The Aloft brand joins The Westin and Four Points by Sheraton Hotel & Suites in the San Francisco International Airport neighborhood.
Since late 2010, hotel companies are working hard on guest satisfaction to uplift their positions in a cutthroat environment. According to management, there are several well-positioned, older hotels in metro markets which are good candidates for restructuring. Apart from brand conversion, Starwood also focuses on remodeling existing brands. Many of Starwood’s peers like Marriott International Inc. (MAR) and InterContinental Hotels Group (IHG) are following this facelift trend.
Starwood currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock.
STARWOOD HOTELS (HOT): Free Stock Analysis Report
INTERCONTL HTLS (IHG): Free Stock Analysis Report
MARRIOTT INTL-A (MAR): Free Stock Analysis Report
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