Starwood to
freeze salaries

About 20 corporate execs will
be affected in Hawaii operations

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By Jeannine DeFoe
Bloomberg News

WHITE PLAINS >> Starwood Hotels & Resorts Worldwide Inc. will freeze employee salaries next year as the owner of the Westin and Sheraton copes with a slump in business travel spending.

(The move affects roughly 20 corporate-level Starwood employees in Hawaii, said David Uchiyama, spokesman for Starwood. Locally, the firm manages 14 hotels, where most of the 8,500 workers are employees of the individual owners. The salary freeze is a reflection of the overall rough economic and travel climate, Uchiyama said.)

The company also plans to cut costs by suspending 22 "corporate programs," Chairman and Chief Executive Barry Sternlicht said on a conference call, without elaborating. The company hasn't frozen salaries previously, he said.

Starwood, the largest hotel owner, said yesterday it will earn less than expected in 2003 as companies cut back on business travel spending.

The company's third-quarter profit rose 73 percent as a drop in interest and tax expense made up for little revenue growth.

Sternlicht also said the company would emphasize marketing to companies that are spending more on corporate travel, such as drug companies.

"You can't go after Lucent or Nortel when they've laid off 100,000 people," he said.

Starwood also wants to sell $500 million in assets by the end of 2003, Sternlicht said.