Starwood Hotels & Resorts Worldwide Inc. reported a small loss($6 million, or three cents a share) in the third quarter compared with a profits of $40 million($.22 a share) last year. A $55 million charge related to a sale of an asset contributed to the loss. Excluding the lost, Starwood earned $.25 a share, well above the Company’s July forecast of $.15-.19 a share. The company is recovering from last years slump in the hotel industry. Revenues rose 8.6% and Revpar(revenue per available room) jumped 11% which was far better than last year’s decline of 20%. In the Company’s fourth quarter, Starwood is projecting profits of $.36-$.38 on Revpar growth of 7%-9%. For 2010, it now expects to earn $1.09-$1.11 a share on Revpar growth of 9%-10%, well above their prior forecast of $.93-$1.05 which was based on Revpar growth of 7%-9%. Like other competitors such as Wyndham and Marriott that also posted sizable improvement in their quarterly earnings, Starwood is definitely citing improved demand and substantially higher Revpar growth rates.
Based on the gradual improvement in the US GDP, low interest rates, modest growth in business travel, Starwood Hotels & Resorts Worldwide Inc. should be able to generate solid growth in Revpar and Revenues and at least mean their fourth quarter and 2011 earnings forecast. Starwood is aggressively cutting costs, raising room rates and benefiting from the rebound in travel and tourism. The improvement in demand and room rates as well as efforts to reduce costs should contribute to a starry-eyed 2011 for Starwood Hotels.
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