Starwood profit rises with increasing demand


POSTED: Friday, April 30, 2010

NEW YORK » An increase in hotel demand, particularly at its luxury brands, pushed Starwood Hotels & Resorts Worldwide Inc.'s first-quarter profit sharply higher, the company said yesterday.

Both its revenue and adjusted profit handily beat Wall Street's expectations.

“;The pent-up demand we hoped for has materialized,”; CEO Frits van Paasschen said in a conference call. But he cautioned that the global economy is still volatile and that Starwood would avoid mistakes borne of excessive “;newfound optimism.”;

The owner of the Sheraton, W, Westin and other hotel brands raised its full-year earnings forecast and gave a second-quarter profit guidance yesterday, both topping analysts' forecasts.

“;The lodging recovery seems to be in full force both internationally and in the U.S.,”; Steven Kent of Goldman Sachs wrote in a note to clients.

; Many consumer companies are reporting a rebound in demand as the economy improves, and both leisure and business travelers starting to return to hotels.

“;Lodging demand for our nine global brands accelerated as we moved through the first quarter, allowing us to beat expectations on robust top-line growth,”; van Paasschen said in a statement yesterday. “;Most encouraging for us was that occupancy gains were led by the luxury market.”;

Luxury occupancy increased nearly 20 percent in the quarter, van Paasschen said during the call.

Starwood, which has several properties in Hawaii, posted a profit of $30 million, or 16 cents per share, for the three months that ended March 31. That compares with earnings of $6 million, or 3 cents per share, a year earlier.