Starwood Q1 profits exceed expectation

Starwood Hotels & Resorts Worldwide Inc has announced a hike in its first quarter earnings, which rose 66% despite a drop in revenue.

The increase was due largely to a US $70 million tax benefit and strong performance in North America.

Net income climbed to $213 million or $1.09 per share in the first quarter of 2013, compared to $128 million in the first quarter of 2012, the groups said in its statement.

Worldwide REVPAR for the company increased 5%, 6.2% in North America.

Earnings from Starwood’s vacation ownership and residential business decreased by around $11 million compared to 2012, due to lower revenues at the St. Regis Bal Harbour residential project that is nearing completion.

Frits van Paasschen, CEO, said, “We had a solid first quarter across all lines of our business. Our management and franchise fees grew strongly, and despite our sale of 11 hotels, earnings at our owned portfolio exceeded last year’s levels, driven by great performance at our North American properties.

"We grew REVPAR Index as we captured more than our fair share of global growth. And at Bal Harbour, we’ve now sold and closed on approximately 86% of the residences.

"Overall, the global lodgingrecovery continues along the trend lines we’ve been seeing. Tight supply is driving higher room rates in North America, and our footprint continues to expand in the growing economies. We are seeing more interest among real estate buyers for both vacation ownership and our owned hotels.”

During the quarter, the company signed 26 hotel management and franchise contracts, representing some 6,200 rooms and opened 18 hotels and resorts with some 4,000 rooms.