Recently, Starwood Hotels & Resorts Worldwide Inc. HOT announced the extension of its deal with Berlin-based Design Hotels AG and that Design would be its 11th brand. However, Design Hotels will continue to operate independently. The announcement was made during the International Luxury Travel Market annual event. Since 2011, Starwood has been a majority stakeholder in Design Hotels, but a passive investor, and did not participate in the day-to-day decisions of running the company.
The collaboration with Starwood would provide a distribution and loyalty advantage to certain Design hotels, such as allowing guests to book their stay through Starwood’s sites, mobile apps and Customer Contact Centers worldwide. Further, Starwood Preferred Guest (SPG) members would receive the benefits and Starpoints when they book a Design-branded hotel through Starwood’s site or app.
The partnership will also enhance exposure for Design Hotels across Starwood’s industry-leading distribution and loyalty platforms. On the other hand, Design’s strong collection of hotels would boost Starwood’s market share
The Design branded hotels in New York City, South Africa, Italy, Switzerland, and the Netherlands will be included under SGP. In addition, the ION Luxury Adventure Hotel in Iceland, the Tribe Hotel in Kenya and Grupo Habita’s hotels in Mexico will be added under the program by the end of 2015. In early 2016, hotels in London, Istanbul, Shanghai, Athens, Singapore, France and South Korea will be included in the Design portfolio.
Starwood currently has a Zacks Rank #3 (Hold). Some better-ranked hotel stocks are Wyndham Worldwide Corporation WYN, Extended Stay America, Inc. STAY and Belmond Ltd. BEL. All these stocks carry a Zacks Rank #2 (Buy).
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