Leading hotelier, Starwood Hotels & Resorts Worldwide, Inc. (HOT) recently declared its plan to take its Luxury Collection brand to Seoul, South Korea in 2016. In this regard, the company has partnered with Parnas Hotel Co. Ltd. Currently, Starwood operates six properties in South Korea and two more hotels are in the development pipeline.
The upscale property — The Parnas, A Luxury Collection Hotel, Seoul — will mark the brand’s entry in the country. The property will boasts around 138 rooms along with 24 suites and offer a wide range of amenities including lounge, spa, fitness center and an all-day dining restaurant. Strategically positioned in a posh locality near Gangnam’s southern district, the Luxury Collection-branded property is sure to generate immense business.
Starwood is consistently trying to expand its presence in the Asian market where demand for hotels is significantly greater than in the U.S. and the pace of recovery is particularly fast.
Seoul, the capital of South Korea, is one of the leading tourist destinations. The city is a key commercial, technology and entertainment hub and home to the renowned electronics companies like, Samsung Electronics Co., Ltd. and LG Corporation. Additionally, in a limited supply environment, South Korea has been witnessing higher demand for luxury accommodation. In this situation, Starwood’s decision to expand in the country appears to be strategically apt.
Some other hoteliers such as Hyatt Hotels Corporation (H) and Marriott International, Inc. (MAR) have also established their presence in the country to tap the immense opportunity.
Starwood currently owns nearly 85 hotels globally under the upscale Luxury Collection brand out of which about 20 properties are in Asia. The company is set to expand the Luxury Collection portfolio in the region further with the introduction of two properties in China in 2014.
The Zacks Rank #4 (Sell) company recently posted mixed fourth-quarter 2013 results. Although Starwood’s earnings beat the Zacks Consensus Estimate, revenues were weak due to a decline in Vacation ownership and residential sales and services revenues.
Another hotelier, Wyndham Worldwide Corporation (WYN) recently posted mixed fourth-quarter 2013 results. While its fourth-quarter earnings missed the Zacks Consensus Estimate, revenues beat the same.
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