Starwood Hotels & Resorts for 2012 is pushing for
corporate rate increases "close to double digits," president and CEO
Frits van Paasschen said during the company's third-quarter earnings call.
"Unlike last year, our customers expect higher rates,"
van Paasschen said. "Occupancy is at levels now where, historically, rates
have always increased."
Global occupancy for the quarter was 70.9 percent, up 2.2
percentage points from a year prior, and CFO Vasant Prabhu said the company is
seeing no change in demand related to current economic concerns. Occupancy is
highest in North America, which van Paasschen said is "all about rate now,"
and increased by 2.8 percentage points to 74.2 percent.
At the same time, few hotels are being built, and any
significant global supply growth is several years away, van Paasschen said.
During the quarter, rates globally increased by 8 percent in
U.S. dollars and across all of Starwood's brands. St. Regis and Luxury
Collection properties had the highest increase, up 12.5 percent, followed by Le
Meridien, which was up 9.4 percent. The rest of Starwood's brands reported
increases in the 7 percent to 8 percent range except select-service Aloft,
which increased rates by 3.7 percent.
Rates increased the most in Europe (17.6 percent), Latin
America (15.4 percent) and Asia/Pacific (9.7 percent). Increases in North
America (4.8 percent) and Africa and the Middle East (5.7 percent) were more
moderate.
Van Paasschen said the company is approaching rates as if
peak levels reached in 2007 were "not a true peak, philosophically,"
meaning that cycle was interrupted by the sudden market crash and subsequent
recession.
The company reported a net income of $163 million for the quarter, compared with a $6 million loss in the third quarter of 2010.