Marriott International, Inc. (MAR) expects its collection of hotels — operational or in the pipeline — to exceed 1 million rooms by 2015-end. Further, the hotels in the pipeline, once unveiled, will generate in excess of $50 billion in real estate investment globally by Marriott's partners and create more than 150,000 jobs.
With the recent mutual 10-year visa agreement between China and the United States, more Chinese tourists are coming to the U.S. thus, increasing the demand for hotels and supporting Marriott’s growth strategy.
In fact, last year, the company opened more than 46,000 rooms worldwide. Further, in 2014, Marriott signed agreements for over 650 hotels and 100,000 rooms, and increased its pipeline of new hotel development to nearly 240,000 rooms. These hotels will expand Marriott's presence from 80 countries and territories to more than 100.
Regionally, Marriott boasts considerable growth. In North America, the company is entering new secondary and tertiary markets as well as opening hotels in the primary cities. In the Asia-Pacific region, the company expects to more than double its presence.
The company also expects to record over 75% growth in the Middle East and Africa region and 50% rise in the number of hotels in the Caribbean and Latin America area, continuing the momentum. In Europe, the company's robust growth plans will leverage a broad portfolio of brands, including Moxy – a new stylish budget alternative for travelers with a millennial mindset.
In fact, Marriott’s growth trajectory in the U.S. and international markets is creating new jobs leading to economic growth. Together, with its affiliates, the Marriott-branded hotels promote overall economic development by boosting construction and direct employment.
In fact, a study by the German Agency for International Cooperation (GIZ) researched the economic and community benefit of hotels. In its initial study of the JW Marriott Lima Hotel in Peru, which employs 350 associates and features 300 guestrooms and 10 meeting rooms, the agency concluded that the hotel contributes almost $10 million annually to the Peruvian economy through expenditures on salaries, supplies and services.
In developing areas like Haiti and Africa, Marriott is collaborating with hotel owners and non-governmental organizations to hire local residents to manage and operate new hotels. The Marriott Port-au-Prince in Haiti, scheduled to open in February, has already created more than 200 jobs.
We believe that such aggressive growth both in the U.S. and international markets will help Marriott to improve it revenues in the near term. With the global tourism industry growing in leaps and bounds and rising demand for hotels, Marriott is well placed to capitalize on this opportunity.
Stocks to Consider
Marriott has a Zacks Rank #3 (Hold). Better-ranked companies in the same sector include La Quinta Holdings Inc. (LQ), Intercontinental Hotels Group plc (IHG) and Marriott Vacations Worldwide Corp. (VAC). All these stocks carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment