Starwood Hotels & Resorts Worldwide Inc. (HOT), in an attempt to tap the economic prospects and supply shortages in the emerging markets, recently announced the debut of a Sheraton branded hotel in Wuhan, the capital city of Hubei Province in Central China.

The Sheraton Wuhan Hankou Hotel, located in the northeast of Wuhan within the historical Hankou district, will be owned by local real estate management firm, China Oceanwide Construction Group Co Ltd. The 509-room hotel is easily accessible from both the Hankou Railway Station and the Wuhan Tianhe International Airport. We believe the location would be a major draw for tourists in addition to the amenities like meeting rooms, a signature restaurant, lounges, an indoor pool and a fitness center.

The hotel is part of the development of the Wuhan Central Business District, which includes the building of a metro network and is expected to be completed by 2017. The hotel is located at Jianshe Dadao, with retail malls directly accessible from the hotel's lobby making it a popular choice for both business and leisure travelers.

The tourism industry in Asia Pacific, especially China, is expected to grow year over year at the same or higher rate than the mature markets of the U.K., France or Japan, according to the World Travel and Tourism Council. In fact, the emerging markets account for a large share of Starwood’s development pipeline. Fueled by the growing affluent middle class, demand for hotels in China is rising continuously.

More than half of Starwood’s properties are situated outside the U.S., which gives the company wide international exposure, unlike any of its peers. Further, the company is consistently trying to expand its international footprint and striving to tap the high demand in the emerging markets.

Starwood currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the same industry include Marriott Vacations Worldwide Corp. (VAC), Hilton Worldwide Holdings Inc. (HLT) and Intercontinental Hotels Group plc (IHG). While Marriott Vacations sports a Zacks Rank #1 (Strong Buy), Hilton and Intercontinental Hotels carry a Zacks Rank #2 (Buy).

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