Starwood Hotels & Resorts today reported that systemwide revenue per available room increased 9.5 percent in the third quarter of 2007 compared with the same period last year. Starwood leads those competitors that already have reported earnings in quarterly RevPAR performance, which generally was strong but slightly below those produced last year by the strong seller's market in the United States.
In North America, Starwood systemwide RevPAR was up 6.1 percent, compared to 10.6 percent in 2006. Overall revenue was up 5.4 percent to $1.54 billion. The chain's pipeline grew to almost 115,000 rooms during the quarter, according to Starwood CEO Frits van Paasschen. Profits, however, were down, which Starwood attributed to a charge on asset impairments. Earnings for the quarter dropped by almost 17 percent compared with last year, to $129 million, or 61 cents per share, from $155 million, or 71 cents per share.
Marriott International, which reported its earnings earlier this month, grew RevPAR 7.7 percent for the quarter as compared with 9.4 percent for the quarter last year. Meanwhile, overall profits were down, attributed by Marriott to taxes and higher timeshare profits
(BTNonline, Oct. 4).
InterContinental Hotels Group last week also reported strong RevPAR growth in its upscale brands. While overall RevPAR was up only 5.4 percent for the quarter, specific brands reported much larger RevPAR increases. The InterContinental brand's RevPAR was up 8.9 percent, Crowne Plaza was up 7.7 percent, and the emerging Hotel Indigo brand was up 16.1 percent.
Choice Hotels International, which reported its third-quarter earnings on Wednesday, had a slightly more modest increase in RevPAR. Overall, domestic systemwide RevPAR was up 5.6 percent for the quarter, and properties in the midprice without food and beverage tier—Comfort Inn, Comfort Suites and Sleep Inn—reported a 6.1 percent increase in RevPAR and a 5.4 percent increase in average daily rates.
On the supply side, Choice executed 182 new domestic hotel franchise contracts during the quarter, almost half of which were for new construction. Choice's domestic pipeline grew 18 percent to 872 hotels, or 76,823 rooms, during the quarter. Following its first property in Boise, Idaho, earlier this year
(BTN, May 7), Choice's new select-service brand, Cambria Suites, opened two more properties in Appleton and Green Bay, Wis., during the quarter. The fourth Cambria Suites, in Minneapolis, is projected to open before the end of the year.