Starwood Hotels & Resorts Worldwide has been on a bit of a spending spree and will open 300 hotels in the next few years -- almost all of them in Asia and the Pacific. Why? Because in the current economy, the U.S. can't expect much growth in wealth, but a wealth explosion is forecast in Asia. So, why not go where the money definitely will be?
Expansion into international markets like South America, China, and India is nothing new' it's been a growing phenomenon since I started writing for BNET in 2008. InterContinental Hotel Group started moving into China, Vietnam, Costa Rica and India two years ago, and several other hotel companies, namely Hilton and Marriott, have followed suit. Even airlines like Delta are moving closer to Asian markets because they all smell the money. According to Starwood:
Starwood said Tuesday that the significant increase in India is mostly tied to the fact that the country does not have enough hotels.Asia is set to outpace U.S. growth considerably and there will be more of the new middle- and millionaire-class willing to part with their cash.
"Consider that India with a population of one billion people has just 100,000 hotel rooms, while New York City alone has roughly 80,000 hotel rooms," CEO Frits van Paasschen said in a statement.
Starwood has had a presence in India since 1973, when it opened a Sheraton in Mumbai. The company and its partners have three Aloft hotels scheduled to open in India this year.
Are there concerns with betting on Asia? Well, the governments are less stable, there's the risk of insurrection and the scourge of human rights violations. The latter means little to nothing to most CEOs, but the first two are much bigger potential problems. Even India, with its relatively stable government, has been recovering from a series of insurgents ranging from right-wing Muslim extremists to left-wing Maoist utopians. And when one of the biggest recent attacks occurred? It was a Mumbai hotel, the Taj Mahal Palace Hotel, at its center.