Starwood Hotels & Resorts Worldwide, while posting a fourth-quarter 2009 loss yesterday, credited a boost in business travel demand with mitigating declining revenues during the final months of last year.
"Business travelers have returned, as witnessed by improving Monday through Thursday occupancy," Starwood CEO Frits van Paasschen said on Thursday during a conference call to investors. "New York, a good leading indicator, saw occupancy levels of roughly 88 percent in the fourth quarter, just short of the peak 88.5 percent in 2007."
Revenue per available room declined by 7.9 percent worldwide and by 9.6 percent in North America during the quarter compared with the same period in 2008. Those results beat Starwood's expectations, however, and were Starwood's best RevPAR results since the third quarter of 2008, van Paasschen said. Starwood CFO Vasant Prabhu said the company expects business travel to continue its rebound this year.
"We are hearing from our corporate customers that cuts in travel are behind them," Prabhu said. "Companies want to get people back on the road, drumming up business and motivating their teams."
Average daily rate was down 8.3 percent worldwide and by 10.1 percent in North America during the quarter. Occupancy was up by 0.7 percent worldwide and flat in North America.
Prabhu also said group cancellations were down 50 percent during the quarter and that bookings for the first half of this year are up more than double last year. "Businesses also are confirming meetings that had been put on hold," he said.