Starwood reports 12% revenue increase for ’02
Although its near-term forecast is clouded by the United States’ potential conflict with Iraq, Starwood Hotels & Resorts Worldwide Inc. has reported a 12% revenue increase for the fourth quarter of 2002.
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Starwood, owner of the Sheraton, Westin and W hotel chains, reported that earnings per share was 0.42 cents versus a loss per share of 0.28 cents during the fourth quarter of 2001. Starwood also reported that REVPAR (Revenue Per Available Room) for its North American hotels rose over 10% during the fourth quarter of last year.
"2002 was a challenging year," says Barry Sternlicht, chairman and CEO of Starwood. "The much-anticipated global economic recovery never materialized and business travel remains subdued in the uncertain environment."
Revenues from Starwood’s vacation ownership business rose 29% in the fourth quarter to $93 million. "Our vacation ownership division had an excellent year with significant momentum that we expect to extend well into 2003 and beyond," says Sternlicht. He believes the company’s strength in that division will offset overall weakness in U.S operations. Starwood projects that REVPAR for its same store owned hotels worldwide will be nearly flat versus REVPAR numbers from the first quarter of 2002.
"What will drive the recovery is the return of corporate travel. We see a quarter or two lag between the economy picking up and travel budgets also improving," explains Bear Stearns’ lodging analyst John Mattesich.
Mattesich says the overall 2003 outlook for the lodging sector is "cautious," but adds that Starwood may be in a good position to weather the tough economy since they are, in his words, "levered for a U.S rebound."
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