Starwood Reports Poor Room Revenue

Starwood Hotels & Resorts Worldwide today released its first-quarter 2002 earnings, reporting that revenue per available room fell 15.3 percent in North America, compared with the first quarter of 2001.

Starwood's results were consistent with those reported by Hilton Hotels Corp. and Marriott International this past week, which showed RevPAR for U.S.-owned and operated hotels down 13.7 percent and 12.7 percent, respectively, for the quarter, compared with the prior year.

In each case, the companies cited the slowdown in the economy, followed by cuts in business travel, as the reasons for the poor performance. The continued revenue squeeze for hotels augurs well for buyers since the hotel companies are more likely to negotiate greater discounts in return for gains in market share.