Starwood Hotels & Resorts Worldwide Inc., the world's largest owner of hotels, said second-quarter earnings fell 41 percent on a decline in business travel at its Sheraton and Westin hotel chains. The company, which manages and/or markets about a dozen hotel properties in Hawaii, also said earnings for 2002 will be less than expected. Sheraton owner’s
earnings dropStar-Bulletin staff and wire
Profit from continuing operations was $76 million, or 38 cents a share, compared with net income of $107 million, or 53 cents, a year earlier. A gain of $104 million from discontinued operations in the quarter resulted in net income of $180 million, or 89 cents. Revenue fell 5.7 percent to $1.23 billion.
Starwood and other hotel companies have been hurt by a decline in business travel that began last year, forcing them to charge lower room rates. Starwood's bid to raise its room rates an average of 5 percent starting May 1 failed in some markets when rivals didn't follow suit.
White Plains, N.Y.-based Starwood owns 165 hotels and has a stake in, franchises or manages 740 worldwide. Some of its hotels include New York's St. Regis and Sheraton Manhattan Hotel, Chicago's Westin Copley Place and the Sheraton Waikiki. On the basis of revenue, Starwood is smaller than Marriott International Inc., which gets most of its sales from managing or franchising.
Starwood said vacation ownership interest contract sales were particularly strong in the quarter at Westin Kaanapali Ocean Resort Villas in Maui and Westin Mission Hills Resort Villas in Rancho Mirage, Calif. Both resorts are currently under construction.