Starwood Hotels & Resorts Worldwide, Inc. (HOT) announced that it has completed the first phase of renovation of Sheraton Rio Hotel & Resort in Latin America. Over the last two years, the company has spent $50.0 million for the restoration of this flagship property. The second phase of renovation of this beachfront property will begin at the end of 2014 and is scheduled to be completed in 2015.
The renovation process includes large-scale enhancements to the hotel's guestrooms, lobby, bar, fitness center, and the introduction of a new Shine Spa and two new restaurants. As a part of the re-design, the company has added approximately 5,400 square feet to its meeting facilities, resulting in almost 29,000 square feet of total space. This renovation is a part of the company’s commitment of investing $350.0 million, made in Apr 2012, to enhance its global portfolio and renovate its flagship properties around the world.
The company’s growth in Latin America, backed by robust expansion in Mexico and Columbia, has already made it the largest high-end hotel operator in the Latin American region. Currently, the company operates 30 Sheraton hotels in Latin America and plans to open three more in the next two years. Recently, the company announced that it plans to open 17 hotels under various brands in the Latin American region by 2016.
Continuous GDP growth, steady influx of direct foreign investment in high growth markets and a growing middle class with sufficient disposable income have strengthened tourism in Latin America and boosted its potential as a hospitality market. We believe Starwood’s aggressive expansion in the region will further strengthen its position as a leading hotelier in Latin America.
Starwood currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the hotel industry include Wyndham Worldwide Corp. (WYN), Hilton Worldwide Holdings Inc. (HLT) and Marriott Vacations Worldwide Corp. (VAC). All these stocks have a Zacks Rank #2 (Buy).