Marriott Banks on Branded Residential Portfolio Expansion
Marriott International, Inc. MAR continues to bank on the expansion of its branded residential portfolio to drive growth. The company anticipates its branded residential portfolio to increase in an excess of 70% in four years.
Demand for branded residential has increased as both consumers as well as residential real estate developers are looking for homes associated with the company’s brands like Ritz-Carlton, St. Regis, Edition and W everywhere. Notably, Marriot is the largest branded residential company in the lodging industry with approximately 90 branded residential in operation. Moreover, the company said that more than 60 branded residential projects are in the pipeline.
Ritz-Carlton: Major Growth Driver
Increase in demand for luxury lifestyle is driving Marriott International's Ritz-Carlton’s branded residences growth. The company has already opened 35 Ritz-Carlton’s branded residences. Additionally, it has 15 in the pipeline.
St. Regis has opened 12 and has another 12 branded residences in the pipeline. Though most of the branded residential projects of the company are in the United States, it also runs residential projects in 17 other countries as well as territories. By 2022, the company anticipates expanding its branded residential projects in approximately 40 countries and territories. In 2018 and 2019, it expects to open 19 branded residential projects in nine countries.
Marriott’s extensive portfolio and a strong brand position enables it stay ahead of its competitors. Given its property locations, we believe that the company is well-poised to benefit from the increasing market demand on the back of stepped-up business as well as leisure traveling. Given a steady rise in business and leisure travel, and higher transaction volumes, Marriott is well-poised to grow in the near as well as long term.
In a year’s time, the Zacks Rank #3 (Hold) company’s shares have increased 22.8%, outperforming the industry’s growth of 5.1% on the back of impressive bottom-line performance over the past few quarters. In fact, Marriott’s earnings topped the consensus mark for the 16 straight quarters.
Meanwhile, stock such as Choice Hotels International, Inc. CHH, Extended Stay America, Inc. STAY and Red Lion Hotels Corporation RLH, has witnessed a gain of 27.7%, 4.3% and 77%, respectively, in a year’s time. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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