As a part of its continued brand-revitalization, Marriott International Inc. (MAR) has decided to go forward with an extensive makeover plan for its St. Louis Airport property for around $15 million. The venture will begin this fall and is expected to be completed by late 2014.
Adjacent to Lambert-St. Louis International Airport, the hotel enjoys the excellent positioning. St. Louis, Missouri is one of the prime U.S. tourist spots and a favorite destination for business meetings. The city boasts the presence of 19 Fortune 1000 companies.
New development projects worth more than $5 billion have invigorated downtown St. Louis. Further, a set of newer projects valued more than $500 million are also underway in this city. All these make St. Louis a flourishing business zone which in turn propels the hospitality sector.
Further, the Lambert International Airport, with an average of 520 departures and arrivals per day, to and from 70 national and international destinations serves all major airline companies. The location of the property also provides ease of access to other sight-seeing spots of the city. Citing the prospect, Marriott plans to revamp the 600-roomed St. Louis Airport hotel and most importantly widen its 29,000 square feet meeting area.
In a competitive environment, most hotel companies across the globe have been making diligent efforts over the last couple of years to augment guest satisfaction and gain a better foothold in the industry. Hence, brand conversion and remodeling became a trend today. Many of Marriott’s peers like Starwood Hotels & Resorts Worldwide Inc. (HOT) and InterContinental Hotels Group (IHG) are also walking the same path.
Renovation work, however, hurts near-term revenue when construction continues. But after the overhaul work, existing properties pay off more. However, here in St. Louis Airport, Marriott is offering uninterrupted lodging even during refurbishment.
To facilitate a smooth makeover, Marriott plans to accomplish the project in phases just to keep the hotel open throughout the renovation period. The program includes the remodeling of guest rooms, lobby, fitness center and concierge lounge. An inclusion and re-invention of a 40,000 square feet meeting space is also in the agenda to garner more business from meetings and conventions.
Marriott is comprehensively working on its assets to offer an upgraded travel experience to its guests. At present, the company’s managed Residence Inn and Courtyard portfolios in the United States are going through an extensive renovation program which will likely boost RevPAR considerably once fully unveiled. We reiterate our long-term Neutral recommendation on the shares of Marriott.
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