Higher room rates cushion Starwood’s income slide
Slowing Hawaii sales played a role in a 17 percent drop in timeshare revenue
WHITE PLAINS, N.Y. » Starwood Hotels & Resorts Worldwide Inc., the third-largest U.S. hotel company, said quarterly profit fell less than analysts estimated after European travelers paid higher room rates.
The owner of the Sheraton, W and Westin chains said fourth-quarter net income dropped to $146 million, or 74 cents a share, from $203 million, or 93 cents, a year earlier, Starwood said yesterday.
Revenue for the three months ending Dec. 31 rose 2.4 percent to $1.61 billion from a year earlier, Starwood said. Revenue per room rose 14.7 percent for worldwide company-owned hotels. North American revpar increased 12 percent.
Revenue from Starwood's vacation ownership unit fell 17 percent to $259 million as Hawaii timeshare sales slowed.
Starwood Chief Financial Officer Vasant Prabhu said yesterday on a conference call that the slowing Hawaii timeshare sales were due mainly to delays in permitting for third phase of its Kaanapali Ocean Resort project. "It is still our view that we will get the approvals," he said.
Starwood raised room rates in cities that are attractive to foreign travelers, and benefited from its large number of hotels overseas and the dollar's decline against international currencies.
Starwood lowered its full-year growth forecast as higher gasoline prices, along with falling home values and stock prices, may slow travel to its hotels, but advance bookings do not show a reduction in demand, Prabhu said.