Starwood profit falls as travel dips, sees hard year

NEW YORK (Reuters) - Starwood Hotels & Resorts Worldwide Inc (HOT.N) reported a sharp drop in fourth-quarter profit on Thursday and predicted a difficult year ahead as the recession hits business and leisure travel across the globe.

The hotel company, which operates the W, Sheraton and St. Regis brands, expects a "significant decline" in revenue per available room this year -- the industry standard measurement of a hotel's performance -- and forecast first-quarter and full-year profit below Wall Street's average estimates.

It warned further that economic uncertainty made it difficult to provide a definitive profit outlook for the full year.

Starwood, the world's No. 8 hotel group by rooms, reported quarterly profit of $79 million, or 43 cents per share, compared with $146 million, or 74 cents per share, a year earlier.

Excluding some one-time items, Starwood reported profit of 49 cents per share. On that basis, Wall Street was expecting 35 cents per share, according to Reuters Estimates.

Revenue per available room fell 12.1 percent for all Starwood's hotels across the world from the year-ago quarter, indicating the sharp downturn in the travel market as many of the world's economies slid into recession.

Expecting further financial damage, Starwood said it expected first-quarter earnings, excluding one-time items, of 2 cents to 7 cents per share, well below the 14 cents per share expected by analysts.

Assuming a 12 percent dip in worldwide revenue per available room this year at its company-operated hotels, Starwood forecast full-year earnings of about $1.10 per share, excluding one-time items, but warned that economic uncertainty made it very difficult to provide a definitive forecast. Analysts are expecting full-year earnings of $1.20 per share, on average.

(Reporting by Bill Rigby; Editing by Lisa Von Ahn)