WHITE PLAINS, NEW YORK Starwood Hotels & Resorts Worldwide Inc. beat its fourth quarter growth forecast, posting a 10.1% RevPAR improvement and raising its 2011 projections.
Starwood has raised its 2011 earnings outlook to a range of US$1.55 to US$1.65 per share, up from its prior forecast of US$1.44 to US$1.55. RevPAR improved in four of Starwood’s five global regions, including a 20.3% spike in Asia Pacific and 17.2% in Latin America. Only Africa and the Middle East saw RevPAR drop in the quarter, by 2.2%.
“We ended 2010 with a strong fourth quarter, and momentum has continued into 2011,” says CEO Frits van Paasschen. “Our robust REVPAR growth is fueled by strong global brands, along with sales and marketing initiatives. By containing costs we are translating these higher revenues into higher profits.”
Starwood’s net income totaled US$339 million, or US$1.78 per share, compared with a year-earlier net loss of US$107 million, or US$0.59 per share. Excluding discontinued operations and special items, earnings were US$0.52 per share. Adjusted EBITDA was US$269 million. Management fees, franchise fees and other income increased 13% compared to 2009. Starwood reports some positive news for its struggling vacation ownership division, with operating income up US$13 million compared to 2009.
During the quarter, Starwood signed 37 hotel management and franchise contracts representing approximately 8,000 guestrooms, and it opened 23 hotels and resorts with approximately 5,700 guestrooms.
“Starwood is well-positioned to capitalize on the rapid growth in emerging markets,” van Paasschen says. “In developed markets, tight supply should support rate increases. Our balance sheet is in great shape, with year-end net debt of just over US$2 billion. We are making solid progress towards our investment grade objective.”
For the full year 2011, Starwood says macroeconomic and geopolitical environments remain uncertain. “Booking windows, while improving, are short,” the company says. “We believe that several scenarios are possible. With low supply growth in developed markets and high demand growth in emerging markets, rate improvement will be the key driver of 2011 results.”