MAR Marriott International Inc

W, one of the high-end brands of Starwood Hotels & Resorts Worldwide Inc. (HOT) finally stepped into France. Located in the heart of Paris, W Paris – Opéra features 91 stylish guest rooms including 20 suites and two presidential suites along with many other amenities. Owned by Barcelona-based Meridia Capital, the hotel is set inside a historic heritage building near Opéra Garnier.

Starwood set a new trend in hotel designs with its W brand and remains on the track to spread its operations globally through its 50 hotels since its launch in 1998 in New York. The brand, generally aimed at a younger crowd, started to ride on a high growth trajectory and has already left its mark in every region including North America, Europe, Latin America, Asia Pacific as well as Middle East and Africa.

However, Singapore, Bangkok and some places in China are awaiting brand’s debut later this year. The brand will also step into India in 2015 with the opening of the W Mumbai and the W Retreat & Spa Goa, followed by the W Noida, Delhi NCR in 2016. In the fourth quarter of 2011, RevPAR growth in W was a solid 7.8% or 8.2% in constant dollars.  

W opened its first hotel in Europe in Istanbul in May of 2008, followed by The W Barcelona hotel in October 2009. With the recent launch in Paris, Stawood operates five W hotels in Europe. The other four hotels are in Russia, Spain, Turkey and United Kingdom. Greece, Italy and Switzerland will see their share of W property in 2013.

It is quite evident that Paris is a strategic fit for new hotels, as it is an important tourist destination. The hotelier is all set to beef up its portfolio in that market, as Paris attracts tourists from all over the world. Apart from W, Starwood’s other brands, such as Le Meridien, Sheraton and Westin are also operating in Paris.

However, the market is not free from competition. Several major hoteliers like InterContinental Hotels Group (IHG), Hyatt Hotels Corporation (H) and Marriott International Inc. (MAR) also have considerable presence in Paris.  Additionally, there are some near-term macro-economic challenges in Europe owing to the debt crisis. European revenue per available room rate was flat in the fourth quarter of 2011 and management expects the softness to likely loom in the near term.

Starwood currently retains a Zacks #2 Rank, which translates into a short-term 'Buy' rating.

 
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