Starwood Hotels & Resorts Worldwide’s third-quarter profit fell 65 percent as demand for upscale rooms plunged during a slump in travel.

Published: 23 Oct 2009

Starwood Hotels & Resorts Worldwide’s third-quarter profit fell 65 percent as demand for upscale rooms plunged during a slump in travel.

For the third quarter, Starwood reported a profit of $40 million down from $113 million, a year earlier. Revenue decreased 21 percent to $1.22 billion.

Frits van Paasschen, CEO said, “Over the past twelve months we have focused on cost containment and debt reduction, which positions us well to ‘Own the Upswing’. Our increasingly fee-based, capital-efficient business model will grow as REVPAR recovers and as our pipeline translates into unit additions.”

He added, “Our owned hotels are skewed towards the high end and have been particularly hard-hit over the past twelve months, implying they are poised for a strong rebound as the world economy recovers. And with half of our hotels outside of the United States, we will benefit from secular growth in international markets.”

“With the $6 billion Sheraton Revitalisation Programme nearly complete, I can’t think of a better time to aggressively re-launch the brand than into the early stages of an upcycle,” he said.

Worldwide revenue-per-available-room -- a key industry metric known as RevPAR -- for hotels open at least a year fell 20.3 percent, Starwood said. RevPAR for same-store hotels in North America decreased 19.7 percent.