Starwood posts strong growth in net income for Q3

Starwood’s profits in Q3 have increased from the same period last year, with net income reaching US $170 million, up from US $163 million in Q3 2011.

Worldwide system RevPAR for same-store hotels has increased 4.7% in constant dollars, with the Middle East leading the growth, up 7%, although in actual dollars, this equated to a 3.2% increase – second in the rankings to North America.

Adjusted EBITDA was US $895 million in the first three quarters, which includes US $125 million of EBITDA from the St. Regis Bal Harbour Resort residential project (“Bal Harbour”), compared to $711 million in the same period in 2011.

System-wide in the Middle East and Africa, ADR was up 0.2% to US $163.63, while average occupancy rates were up 1.7% to 56.7%.

Frits van Paasschen, CEO, said: “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% in constant currency, despite a deceleration in the global economy.

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

The Aloft brand proved to be the company’s strongest in terms of growth, with RevPAR up 8.7% in constant dollars, ahead of the W brand, which saw a RevPAR increase of 6.7%.

Paasschen added: “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.”

During the third quarter, Starwood signed 25 hotel management and franchise contracts, with a total of around 4,800 rooms. Of these, 18 are new builds and seven are conversions from other brands.