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Hotel Chains Positioned to Profit in China

NEW YORK (TheStreet) -- Shareholders of Marriott International (MAR - Get Report), Wyndham Worldwide (WYN - Get Report), The Intercontinental Hotels Group (IHG) and Starwood Hotels and Resorts (HOT) can sleep better at night given the economic reforms and urbanization taking place in China.

As detailed in a previous article on TheStreet, the ruling Communist Party is moving to open the Chinese economy more to meet market demand. Combined with the perpetual urbanization in the world's most populous country, as covered in another TheStreet article, this should greatly increase the demand for hotels from both business and pleasure travelers. All four hotel chains have significant growth expansion plans for China and the rest of Asia.

Marriott International, for example, is looking to double its presence in Asia by 2016.

Arne Sorenson, President and Chief Executive Office of Marriott International remarked in a statement that, "Our explosive expansion across the region reflects the popularity of our brands in Asia with owners and customers alike, and with a hotel opening almost every week across the continent, we will be poised to welcome travelers from the world over." Sorenson expects about 330 hotels to open in the region over the next three to four years.

Sorenson continued: "China remains our biggest market in the region with 64 open hotels and signed contracts for an additional 89 hotels, which will take us to more than 150 hotels in the country in the next three years or so."

It is much the same story for Wyndham Hotel Group, The Intercontinental Hotels Group, and Starwood Hotels.

Wyndham, the world's largest chain, recently opened the 500th Super 8 hotel in China. The company now has a "strong presence" in nearly 200 Chinese cities. John Valletta, president of the Super 8 Brand, said in a press release that, "We will continue to collaborate with Super 8 Hotels (China) Co. Ltd. to capitalize on the opportunities inherent in the market to strengthen and expand the Super 8 Brand."

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