Starwood Reports Strong Quarter, PwC Foresees Summer Demand

Starwood Hotels & Resorts Worldwide today announced first-quarter earnings that showed revenues rising a healthy 9.4 percent in its North American hotels and 11.6 percent in its international portfolio, compared with the first quarter of last year. Meanwhile, PricewaterhouseCoopers this week projected U.S. occupancy rates for the three-month summer season this year will reach 69.1 percent, the highest level for the period since the banner year of 2000, when occupancy rates hit 72.1 percent. While summer demand largely is leisure driven, PwC expects to see increased demand in many downtown locations frequently booked by business travelers.

The Starwood statistics, coupled with the PwC projection, are the latest evidence that the purported lodging industry rebound is gaining traction, following a three-year drop in occupancies and revenue.

Contributing to the positive rise in revenue per available room, Starwood reported that average daily rate for the quarter rose 2.4 percent in North American hotels and 4.6 percent internationally, year over year. In its critical U.S. market, however, chairman and CEO Barry Sternlicht pointed out some underperforming markets amid the generally positive results. While hotels in New York, San Francisco and Washington, D.C., performed strongly, properties in San Diego, Chicago and New Orleans struggled, suggesting that buyers planning to bring additional room nights to these cities will have additional negotiating leverage.

Starwood, whose brands include St. Regis/Luxury Collection, Sheraton, Westin, W and Four Points by Sheraton, was the first of the large, multi-brand companies to report first-quarter earnings.