Starwood Hotels has its eyes on China
NEW YORK (Reuters) - Starwood Hotels & Resorts (HOT.N) could see as much as a quarter of its business come from Asia in the next few years, the hotel operator's chief financial officer said on Monday.
Starwood currently draws 15 percent of its business from Asia, said CFO Vasant Prabhu at the Reuters Travel and Leisure Summit in New York.
"It's not inconceivable that it (business in Asia) grows to 20, 25 percent," he told Reuters.
Starwood has 50 hotels in China and plans to open another 50 to 70 properties. In a few years, Prabhu said the region could be its largest market outside the United States.
"I think inevitably the U.S. component will decline not because our U.S. business won't grow but because we expect our non-U.S. business to grow faster," Prabhu told reporters.
Starwood is hoping that its international foothold will help it rebound from the worst downturn for the industry since the Great Depression.
Forty percent of Starwood's business comes from emerging markets.
"We've started to call them 'faster-growing markets,'" he said. "It's not inconceivable that in a relatively short period half our business will come from emerging markets."
Prabhu said the profile of the average customers has changed dramatically in the past decade. Ten years ago, the typical property outside the United States saw many visitors come from Europe and the United States.
Now, as much as 80 percent of guests come from the property's region.
Hotel room rates in the United States fell nearly 9 percent in 2009 and are likely to edge down again in 2010. In an effort to contend with falling demand, Starwood cut its dividend, sold its Bliss spa business and cut costs 8 percent last year.
Prabhu projects room rates for Starwood's hotels will turn positive at some point in 2010.
- White House reverses, says Obama met uncle and lived with him during law school
- Flights delayed as air pollution hits record in Shanghai
- South Africa mourns Mandela, will bury him on December 15 |
- Analysis: Boeing bidders dangle goodies to win 777X jetliner
- RPT-UPDATE 1-Ford leans on global Mustang to burnish overseas image