Starwood profit beats estimates as North America demand increases
(Reuters) - Starwood Hotels & Resorts Worldwide Inc (HOT.N), owner of the Sheraton and Westin brands, reported a quarterly profit that beat analysts' estimates, helped by growth in business travel in North America.
The increase in business travel due to a recovering economy has resulted in tight supply of hotel rooms and higher occupancy, allowing hoteliers to raise rates.
Revenue per available room (RevPAR) increased 6.4 percent in actual dollar terms at Starwood's owned, managed and franchised hotels open at least one year in North America.
RevPAR is calculated by multiplying a hotel's average daily room rate by its occupancy rate.
Starwood has about half of its properties outside North America, making it vulnerable to a strong dollar and weak demand elsewhere.
RevPAR in Asia, excluding China, fell 5 percent in actual dollar terms in the March quarter due to the strong dollar.
Wyndham Worldwide Corp (WYN.N), which also reported results on Thursday, said international revPAR declined 4.3 percent at its lodging business due to a strong dollar.
Hyatt Hotels Corp (H.N) and Marriott International Inc MAR.N are scheduled to report quarterly results next week.
Starwood's net income from continuing operations fell 5 percent to $136 million, or 71 cents per share, in the first quarter, from $143 million, or 73 cents per share, a year earlier.
The company reported earnings of 63 cents per share excluding items, above the 56 cents per share analysts on average had expected.
Revenue fell 5.3 percent to $1.46 billion, but was marginally above analysts' average estimate of $1.45 billion, according to Thomson Reuters I/B/E/S.
Stamford, Connecticut-based Starwood's shares closed at $76.91 on the New York Stock Exchange on Wednesday.
(Reporting by Mridhula Raghavan in Bangalore; Editing by Sriraj Kalluvila)
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