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Starwood reports strong third quarter

W Westwood

Strong RevPAR gains and high occupancy rates have helped Starwood record a solid third quarter of 2012, with net income jumping 4 per cent on the corresponding period in 2011.

Net income was USD$170 million in the third quarter of 2012, compared to USD$163 million in the third quarter of 2011.

“We delivered another solid quarter of EBITDA and EPS growth led by continued gains in both room rates and occupancy. Global RevPAR grew nearly 5 per cent in constant currency, despite a deceleration in the global economy,” said Starwood CEO, Frits van Paasschen.

“In fact, occupancy rose in all regions and is now reaching or exceeding peak levels in many markets around the world.

“Looking ahead, our results will be driven by two things: first, the trajectory of the global recovery and whether it regains its momentum in 2013; and second, our ability to use our high-end, global brands, to get more than our fair share of the long-term growth in global travel.”

Starwood said net income in the third quarter of 2012 benefited from a USD$23 million (net of tax) reversal of reserves, following the favorable settlement, in the quarter, of certain liabilities associated with a former ITT subsidiary.

The company also said a strong quarter from a development perspective.

During the third quarter of 2012, the Company signed 25 hotel management and franchise contracts, representing approximately 4,800 rooms, of which 18 are new builds and seven are conversions from other brands. At September 30, 2012, the Company had approximately 370 hotels in the active pipeline, representing approximately 95,000 rooms.

During the third quarter of 2012, 20 new hotels and resorts (representing approximately 6,500 rooms) entered the system, including Sheraton Macao Hotel (China, 1,796 rooms), ITC Grand Chola – a Luxury Collection Hotel (India, 600 rooms), W Singapore – Sentosa Cove (Singapore, 240 rooms), Sheraton Vitoria Hotel (Brazil, 234 rooms), and Sheraton Tampa East Hotel (Florida, 265 rooms).

Additionally, during the quarter, the Company reopened its owned Aloft San Francisco Airport, which was converted from an unbranded hotel.

Four properties (representing approximately 800 rooms) were removed from the system during the quarter.

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