Starwood Hotels &
Resorts CEO Frits van Paasschen said he's confident upcoming corporate
negotiations "will be even better for us than last year," and that
the company is poised to push rates upward, even as global rates remained
largely steady during the second quarter of 2012.
In U.S. dollars, the average
daily rate during the quarter increased up by 3.8 percent in North America and
by 1.1 percent in Latin America; decreased by 7 percent in Europe and by 4.5
percent in Africa and the Middle East; and stayed nearly flat in Asia/Pacific.
Overall, the average rate inched up 0.6 percent globally.
Global occupancy
increased by 2.5 percentage points to 71.5 percent. In North America, it rose by
2.1 points to 75.7 percent. Occupancy in Europe dipped slightly to just under
70 percent. Given those occupancy levels, van Paasschen said the company is positioned
to raise rates, not only through upcoming corporate negotiations but also by shifting
business away from such lower-yielding channels as online travel agencies and
through increased use of a new revenue management system.
"Rates are still
below where they were at the peak, but that's very consistent with the cycle
overall," van Paasschen said Thursday during the company's quarterly earnings
call.
Despite cloudy economic
forecasts—including "acute anxiety" around Europe and a slowdown in
China's economic growth—van Paasschen said his long-term outlook is positive.
None of the company's 100 projects in China, for example, has been put on hold,
he said, and corporate demand has not dwindled.
"There is no talk
among our corporate customers about cutting travel," van Paasschen said. "Long-term
growth trends have not changed."
Starwood's second-quarter
net income was $122 million, down from $131 million in the second quarter of
2011.