Marriott To Expand In India

Zacks Investment Research
updated | Zacks.com

Marriott International Inc. (NYSE:MAR) is set to further explore the Indian hotel market. Last Friday, the company announced the signing of four additional hotels for its portfolio in India. This would bring the total to 29 properties which are now under construction or development in India.

Marriott currently manages 11 hotels in India, represented by five brands. The company expects to complete the construction and open all 29 properties by the end of 2013. This would almost quadruple the company’s current portfolio in India.

The four newly signed properties are the 250-room upscale Bengaluru Marriott Whitefield Hotel, opening in 2011; the 365-room Jaipur Marriott Hotel, opening in 2011; the 510-room luxury JW Marriott Hotel New Delhi International Airport, opening in 2012; and the 200-room Courtyard by Marriott Hotel Hyderabad Hitec City, opening in 2013.

Marriott joins other hoteliers such as Starwood Hotels & Resorts Worldwide Inc. (NYSE:HOT) and Hyatt Hotels Corp. (H), all of whom have recently announced plans to expand their Indian businesses.

Starwood announced last week that it is on track to beef up its Indian portfolio. Currently, the company has 26 hotels in India. It intends to increase this portfolio 60% by 2013. Starwood is currently developing 15 hotels in India, of which 3 are scheduled to open this year.

Last week also saw Hyatt’s announcement of its plan to multiply in the Indian market. The company would open three hotels this year — Hyatt Regency Pune, Hyatt Regency Chennai and Grand Hyatt Goa. Hyatt also plans to expand into 15 new markets in India over the next 5 years. The company also said that about one-fourth of its global pipeline of more than 120 properties is earmarked for India.

The demand for hotels is greater in the international market than in the U.S., especially in the Asia-Pacific region, where the pace of economic recovery is particularly fast. Other than the Chinese market, the hoteliers are expecting India to offer significant possibilities for growth.

In the Indian market, the demand for hotels considerably outpaces the supply. Additionally, India is expected to experience a meaningful increase in gross domestic product (GDP) within the next few years.

The burgeoning of the middle income group also results in an increase in domestic travel and efforts are underway to increase international tourism. This is attracting the major hoteliers to expand their Indian presence.

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