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The Devil's in the Details for Luxury Hoteliers

By Molly McCluskey – Updated Apr 7, 2017 at 5:30PM

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As competition heats up, these chains are doubling down.

Frequent travelers know that the art to any good trip is in choosing the right hotel. Flights can be delayed, luggage gets lost, foreign languages can be tricky. Check into a quality hotel for a good night's sleep, however, and the next day, all those pesky inconveniences seem manageable.

Yet for all but the most loyal patrons, hotels can seem interchangeable. Bali's resort community of Nusa Dua, for instance, boasts a Club Med, St. Regis, Laguna, and a variety of other four- and five-star resorts. With rates more-or-less competitive for the various tiers, hotel brands are searching for other characteristics to set them apart. It's those nuances you'll want to keep in mind when investing in luxury accommodations.

Starwood dominates Asia
(NYSE: HOT) recently announced it had opened its 100th hotel in China, with 12 more planned by the end of the year. And China's not the only Asian country the hotelier is eying: New Westin, W, St. Regis, and Sheraton properties are opening at a rapid pace in Indonesia, Malaysia, and India. By the end of 2012, Starwood will have opened its 200th Westin hotel.

Starwood also recently revamped its loyalty program for the 2% of its customers who comprise 30% of its business. Westin Bali Resort & Spa Executive Assistant Manager Jason Leung says this has been well received by Starwood guests.

Asia dominates Intercontinental
Not about to be outdone, the InterContinental Hotel Group (NYSE: IHG), which operates Crowne Plaza, Holiday Inn, and Candlewood Suites, among others, recently announced it would launch a brand tailored to its Chinese guests. InterContinental is the world's largest hotelier by number of rooms, and research shows that the Chinese market will overtake the U.S. market within the next 15 years.

The brand, named Hualuxe, will launch first in China to tap into the country's thriving domestic travel business, before eventually expanding throughout the Asia-Pacific region. Hualuxe will feature tea houses, noodle bars, and Chinese gardens.

The U.K.-based company also announced a new U.S. brand called Even, which will compete with Starwood's Westin by focusing on fitness and wellness.

Marriott's lifestyle Renaissance
(NYSE: MAR), which recently reported increased profits for the quarter, saw increased room occupancy rates, especially in group travel and group food and beverage. With the slow return of the economy, new CEO Arne Sorenson said in a press release, more people are traveling, taking vacations, and visiting clients.

On the heels of this optimism comes a massive advertising and lifestyle campaign for Marriott's Renaissance brand, acquired in 1997. The chain has hired a fleet of "navigators," employees whose role is to provide information on the hotel's surroundings. Navigator information will also be available on the Renaissance's revamped social media channels. While the hotelier has done little to market Renaissance since its acquisition, the chain accounts for 8% of all Marriott's rooms among 17 brands.

The Foolish bottom line
Smart hoteliers have waited out the down economy and are now welcoming back global travelers with redesigned, sleeker brands, revamped rewards programs, and customizable experiences. These new ventures, from acquisitions to staff expansions to new brands, offer risk, but also new opportunity for established chains...and investors.  

To see which of these hotels will win the race for world dominance, add these companies to My Watchlist. My Watchlist is a totally free service offered by The Motley Fool to keep you updated on all the news and events you care about most. 

Molly McCluskey owns shares of Starwood. Follow her finance and travel tweets @MollyEMcCluskey. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Stocks Mentioned

Marriott International Stock Quote
Marriott International
$165.63 (0.27%) $0.44
InterContinental Hotels Group Stock Quote
InterContinental Hotels Group
$59.41 (-0.49%) $0.29

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