Marriott Completes Elegant Hotels Buyout, Expands Footprint
Zacks Investment Research | Dec 09, 2019 09:31PM ET
Marriott International, Inc. (NASDAQ:MAR) has completed the acquisition of Elegant Hotels Group. The value of the deal was 100.8 million pounds ($130.1 million) or $199 million, including debt.
Elegant Hotels owns and operates seven properties, of which, six are located along the prestigious west coast of Barbados. Following the buyout, Marriott will now renovate Elegant Hotels’ portfolio. Also, the company will likely operate these hotels as all-inclusive resorts under one or more of Marriott's collection brands.
Solid Expansion Plans
Marriott is consistently trying to expand its presence worldwide and capitalize on the demand for hotels in international markets. Moving ahead, the company plans to significantly expand its global portfolio of luxury and lifestyle brands.
For 2019, Marriott anticipates 5-5.5% net room growth, which is likely to continue building economies of scale, and consumer preference for its brands. In April 2019, the company opened its 7000 property, the 27 storey St. Regis Hong Kong. At the end of third-quarter 2019, the company’s development pipeline totaled nearly 2,950 hotels and more than 495,000 rooms.
The hotel company is trying to strengthen presence outside the United States, especially in Asia, Latin America, Middle East and Africa. Meanwhile, the company’s European pipeline has grown consistently in the recent past and is expected to continue going forward. In fact, Marriott aims to expand its lead in the luxury and full-service segments in the region, have the largest portfolio in the upscale division and also win over millennials in the affordable lifestyle group by 2020. Marriot is very optimistic about growth opportunity in India as well.
Given the steady rise in business and leisure travel as well as higher transaction volume, Marriott is all set to grow in the near and the long term. Year to date, shares of Marriott have gained 30.2% compared with the Original post
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