3Q good for Starwood, Choice

Along with an inflation-adjusted 2.5% increase in U.S. gross domestic product during the third quarter, both Starwood Hotels and Resorts Worldwide Inc., White Plains, New York and Choice Hotels International, Silver Spring, Maryland, saw an uptick in profits.

Starwood managed to turn its results around, posting a US$163 million profit for the third quarter after a US$6 million loss during the same period in 2010. Increased demand boosted RevPAR 11.6% worldwide and 8% in North America year-on-year. Meanwhile management fees, franchise fees and other income increased 16.8% year-on-year.

“We expect to continue growing faster than the market, both in terms of REVPAR and footprint, thanks to our brand momentum and exposure to rapidly growing markets,” said Frits van Paasschen, Starwood CEO. “It is still too early to have a clear view into 2012. There are, to be sure, many clouds over the global economy. But three facts give us cautious confidence. First, in developed markets, occupancies are now at 2007 levels and at a point where rates historically have always risen. And yet, few new hotels are being built. Second, many emerging markets are continuing to see strong growth. Even if economic activity were to cool down, we see unmet demand for hotels. Third, our efforts to gain share have enabled our brands to outgrow the marketplace for more than eight quarters in a row.”

For a full report, click here.

Choice Hotels International saw a 4% year-on-year increase in profit to US$42.3 million during the third quarter, boosted by increased royalty fees and a 5.4% year-on-year increase in RevPAR.

Choice anticipates that RevPAR will increase 6.5% for the fourth quarter and 6% for the full year of 2011 and that the effective royalty rate is expected to increase 2 basis points for full-year 2011.

“We continue to work closely with our franchisees to improve their unit profitability by driving incremental business to their hotels and providing them with targeted services and support to enhance property-level operating performance,” said Stephen Joyce, Choice president and CEO.

For a full report, click here.