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Starwood Takes Aloft to Australia

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Starwood Hotels and Resorts Worldwide, Inc. (HOT) recently announced that it is set to unveil a hotel in Perth, Australia under its popular brand Aloft. Owned by BAAC Pty Ltd, an affiliate of BGC (Australia) Pty Ltd, the Aloft Perth Rivervale property is a part of the re-development project, under which a riverfront land will be transformed into a commercial and residential area.

Slated to open in late 2016, this property will mark the entry of the Aloft brand in Australia and will be the third Starwood property in Perth, following Four Points by Sheraton Perth (opened in Jun 2012) and The Westin Perth (scheduled to open in early 2017).

This hotel with 224 rooms will incorporate the brand’s signature bar and offer various amenities like a spa, a fitness center, a swimming pool, and a 5,920 square-feet meeting space.

Starwood has eleven properties in Australia, of which three are in South Wales, four in Queensland, one in Western Australia and three in Victoria.

The global hotel chain sees huge development opportunities in Australia as it is one of the world’s wealthiest countries in the world. With a limited supply environment, the country is set to witness a surge in demand for luxury accommodation driven by a considerable increase in the number of domestic as well as international travelers.

Australia’s consistent GDP growth over the last few years justifies Starwood’s decision to expand in the country. In fact, Perth — one of the largest cities in Australia —is undergoing a rapid transformation with the opening of restaurants, bars and retail outlets and a $750 million investment in its airport. This could well be one of the reasons for Starwood to choose Perth as an entry point for the Aloft brand .

Accelerating demand for Aloft has fueled the brand's growth in global markets. Starwood’s mid-scale and contemporary lifestyle brand, Aloft, has been riding on a high growth trajectory since its launch in 2008 and has already forayed into Europe, the Middle East, Latin America, India, Southeast Asia and China. Aloft is preferred by modern travelers who seek a unique experience at a reasonable price.

Most hoteliers across the globe are trying to augment guest satisfaction and gain a better foothold in the industry. Hence, brand conversion and remodeling have become a trend, especially in the past couple of years. Apart from Starwood Hotels, Marriott International, Inc. (MAR) is also seeking to tap the rising demand for hotels in Australia. In fact, last week, Marriott International signed an agreement with Fast Consortium to develop a project, which includes a Ritz-Carlton branded hotel and residential apartments in Elizabeth Quay, Perth. Other hoteliers like Hyatt Hotels Corporation (H) are also consistently trying to expand their international footprint.

Starwood presently has a Zacks Rank #3 (Hold). A better-ranked stock in the hotel industry is The Marcus Corporation (MCS), which sports a Zacks Rank #2 (Buy).


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