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Starwood Hotels & Resorts Worldwide Inc. Reports Operating Results (10-Q)

July 26, 2012 | About:
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10qk

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Starwood Hotels & Resorts Worldwide Inc. (HOT) filed Quarterly Report for the period ended 2012-06-30.

Starwood Hotels & Resorts Worldwide, Inc has a market cap of $10.26 billion; its shares were traded at around $50.78 with a P/E ratio of 23 and P/S ratio of 1.8. The dividend yield of Starwood Hotels & Resorts Worldwide, Inc stocks is 1%.

Highlight of Business Operations:

The increase in management fees, franchise fees and other income was primarily a result of a $24 million increase in management and franchise revenues to $215 million for the three months ended June 30, 2012 compared to $191 million for the corresponding period in 2011. Management fees increased 13.5% to $126 million and franchise fees increased 6.1% to $52 million. These increases were primarily due to growth in REVPAR at existing hotels under management as well as the net addition of 54 managed and franchised hotels to our system since the three months ended June 30, 2011. Year-over-year base management fee and franchise fee comparisons were impacted by the conversion of some franchise agreements to management contracts in Germany in the second quarter of 2011.

Vacation ownership revenues for the three months ended June 30, 2012 increased 2.8% to $148 million compared to the corresponding period in 2011 primarily due to the timing and recognition of deferred revenues and favorable trends with respect to default rates on notes receivable. Originated contract sales of VOI inventory decreased 5.0% in the three months ended June 30, 2012 when compared to the corresponding period in 2011, primarily due to lower closing efficiency partially offset by increased tour flow. The number of contracts signed decreased 1.8% when compared to 2011 and the average contract amount per vacation ownership unit sold decreased 2.6% to approximately $14,400 driven by inventory mix.

The decrease in revenues from owned, leased and consolidated joint venture hotels was primarily due to lost revenues from five owned hotels that were sold or closed in 2011. These sold or closed hotels had revenues of $2 million in the six months ended June 30, 2012 compared to $57 million for the same period in 2011. Revenues at our Same-Store Owned Hotels (47 hotels for the six months ended June 30, 2012 and 2011, excluding the five hotels sold and 12 additional hotels undergoing significant repositionings or without comparable results in 2012 and 2011) increased 1.5%, or $11 million, to $739 million for the six months ended June 30, 2012 when compared to $728 million in the same period of 2011 due primarily to an increase in REVPAR.

The increase in management fees, franchise fees and other income was primarily a result of a $48 million increase in management and franchise revenues to $411 million for the six months ended June 30, 2012 compared to $363 million for the same period in 2011. Management fees increased 15.9% to $241 million and franchise fees increased 5.4% to $97 million. These increases were primarily due to growth in REVPAR at existing hotels under management as well as the net addition of 54 managed and franchised hotels to our system since the second quarter of 2011.

Vacation ownership revenues for the six months ended June 30, 2012 increased 3.1% to $300 million compared to the same period in 2011 primarily due to increases in resort income, timing and recognition of deferred revenues and favorable trends with respect to default rates on notes receivable. Originated contract sales of VOI inventory decreased 1.9% in the six months ended June 30, 2012 when compared to the same period in 2011, primarily due to lower closing efficiency and a decrease in the average price per vacation ownership unit sold, partly offset by increased tour flow. The number of contracts signed increased 0.8% when compared to 2011, and the average price per vacation ownership unit sold decreased 2.3% to approximately $15,300 driven by inventory mix.

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