If anything offers an indicator of the age of globalization it’s being able to get a room in a Marriott hotel in Nanning, China. Where is that you ask? The city located in the south of China is just one of a number of new locations in emerging markets throughout the world where Marriott International (MAR) intends to open hotels in the near future.
The American hotel conglomerate announced that it plans to spend about $2.6 billion over the next three years to open new hotels and renovate existing locations outside of Europe and the United States. The economic realities that the company faces are that of Americans and Europeans being more hesitant to spend big bucks on hotels than ever before due to the state of their economies. Therefore, it appears that the greatest opportunities for growth lie elsewhere. Two leading competitors, Hyatt Hotels Corp. (H) and Wyndham Worldwide Corp. (WYN), have already entered emerging markets and focused on hotel lines that specifically appeal to the burgeoning middle class in those countries.
Beyond that, in a move that will thrill tree-huggers everywhere, a group of twenty-three of the leading hotel chains across the world agreed on a standard measure of calculating the carbon impact of activities at their facilities. The group included Marriott, Hilton, Fairmont, and Hyatt, among others, and has established a push to create hotels that address the needs of a changing world. Marriott reinforced its commitment to “go-green” by announcing Tuesday a partnership with the Overseas Private Investment Corporation.
The partnership with the OPIC, the branch of the federal government that provides financing for international expansion, will provide Marriott with funding and loans to create environmentally sustainable hotels, specifically in the Middle East, Africa, Latin America, and the Caribbean.
Business Section: Investment Ideas
Marriott appears to be setting itself up for long-term success, but will the markets reward it with a boost in share price? Whichever hotel chain is able to develop most efficiently in emerging markets will likely reap the benefits of an emerging global middle class. Below is a list of the world’s largest hotel conglomerates worth keeping an eye on.
1. Marriott International, Inc. (MAR, Earnings, Analysts, Financials): Operates and franchises hotels and related lodging facilities worldwide. Market cap at $12.46B, most recent closing price at $37.65.
2. Wyndham Worldwide Corporation (WYN, Earnings, Analysts, Financials): Provides various hospitality products and services to individual consumers and business customers in the United States and internationally. Market cap at $7.48B, most recent closing price at $51.24.
3. Hyatt Hotels Corporation (H, Earnings, Analysts, Financials): And its subsidiaries engage in the management, franchising, ownership, and development of Hyatt-branded hotels, resorts, and residential and vacation ownership properties worldwide. Market cap at $6.01B, most recent closing price at $36.32.
4. Starwood Hotels & Resorts Worldwide Inc. (HOT, Earnings, Analysts, Financials): Operates as a hotel and leisure company worldwide. Market cap at $10.08B, most recent closing price at $51.0.
5. Intercontinental Hotels Group plc (IHG, Earnings, Analysts, Financials): Owns, manages, franchises, and leases hotels and resorts. Market cap at $6.77B, most recent closing price at $23.25.
(Written by Dan Connelly)
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- Starwood Hotels & Resorts Worldwide Inc. (HOT, Chart, Download SEC Filings)
- Intercontinental Hotels Group plc (IHG, Chart, Download SEC Filings)
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