Starwood Hotels & Resorts Worldwide Inc. (HOT, Financial) filed Quarterly Report for the period ended 2009-03-31.
Starwood Hotels & Resorts Worldwide Inc. is one of the world's largesthotel operating companies. The company conducts their hotel business both directly and through the subsidiaries including ITT Sheraton Corporation Starwood Hotels & Resorts and CIGA S.p.A. The brand names include Sheraton Westin St. Regis/Luxury Collection W and Four Points. Through these brands the company is represented in most major markets of the world. Starwood Hotels & Resorts Worldwide Inc. has a market cap of $3.58 billion; its shares were traded at around $19.6 with a P/E ratio of 10.32 and P/S ratio of 0.61. The dividend yield of Starwood Hotels & Resorts Worldwide Inc. stocks is 4.59%.
Historically, we have derived the majority of our revenues and operating income from our owned, leased and consolidated joint venture hotels and a significant portion of these results are driven by these hotels in North America. However, since early 2006, we have sold a significant number of hotels and, in 2008 and the first quarter of 2009, we sold or closed 10 wholly owned hotels, further reducing our revenues and operating income from owned, leased and consolidated joint venture hotels. The majority of these hotels were sold subject to long-term management or franchise contracts. Total revenues generated from these sold hotels were $5 million and $22 million for the three months ending March 31, 2009 and 2008, respectively.
The decrease in revenues from owned, leased and consolidated joint venture hotels was primarily due to the severe economic crisis in the United States and globally. The decrease was also due to lost revenues from 10 wholly owned hotels sold or closed in 2008 and 2009. These sold or closed hotels had revenues of $5 million in the three months ended March 31, 2009 compared to $22 million in the three months ended March 31, 2008. Revenues at our Same-Store Owned Hotels (57 hotels for the three months ended March 31, 2009 and 2008, excluding the 10 hotels sold or closed and 10 additional hotels undergoing significant repositionings or without comparable results in 2009 and 2008) decreased 29.4%, or $143 million, to $344 million for the three months ended March 31, 2009 when compared to $487 million in the same period of 2008 due primarily to a decrease in REVPAR.
REVPAR at our worldwide Same-Store Owned Hotels decreased 30.7% to $117.78 for the three months ended March 31, 2009 when compared to the corresponding 2008 period. The decrease in REVPAR at these worldwide Same-Store Owned Hotels resulted from an 18.9% decrease in ADR to $196.25 for the three months ended March 31, 2009 compared to $241.84 for the corresponding 2008 period and a decrease in occupancy rates to 60.0% in the three months ended March 31, 2009 when compared to 70.2% in the same period in 2008. REVPAR at Same-Store Owned Hotels in North America decreased 29.8% for the three months ended March 31, 2009 when compared to the same period of 2008. REVPAR declined in most of our major domestic markets, including Atlanta, Georgia, Kauai, Hawaii and New York, New York. REVPAR at our international Same-Store Owned Hotels decreased by 32.2% for the three months ended March 31, 2009 when compared to the same period of 2008. REVPAR declined in most of our major international markets, including the Australia and Italy. REVPAR for Same-Store Owned Hotels internationally decreased 17.7% excluding the unfavorable effects of foreign currency translation.
The decrease in management fees, franchise fees and other income was primarily a result of a $26 million decrease in management and franchise revenue to $143 million for the three months ended March 31, 2009. The decrease was due to the significant decline in base and incentive management fees as a result of the global economic crisis, partially offset by the net addition of 51 managed and franchised hotels to our system since the first quarter of 2008. Other income decreased $15 million primarily due to decreases in demand at our Bliss Spa business.
During the three months ended March 31, 2009 and 2008, we recorded restructuring charges of $19 million and $8 million, respectively, in connection with our ongoing initiative of rationalizing our cost structure in light of the decline in growth in our business units. The charges in the three months ended March 31, 2009 were partially offset by the reversal of $2 million of accruals related to expected severance costs recorded during the Le Méridien acquisition that are no longer needed.
Read the The complete ReportHOT is in the portfolios of Michael Price of MFP Investors LLC.
Starwood Hotels & Resorts Worldwide Inc. is one of the world's largesthotel operating companies. The company conducts their hotel business both directly and through the subsidiaries including ITT Sheraton Corporation Starwood Hotels & Resorts and CIGA S.p.A. The brand names include Sheraton Westin St. Regis/Luxury Collection W and Four Points. Through these brands the company is represented in most major markets of the world. Starwood Hotels & Resorts Worldwide Inc. has a market cap of $3.58 billion; its shares were traded at around $19.6 with a P/E ratio of 10.32 and P/S ratio of 0.61. The dividend yield of Starwood Hotels & Resorts Worldwide Inc. stocks is 4.59%.
Highlight of Business Operations:
We, through the services of third-party actuarial analysts, determine the fair value of the future redemption obligation based on statistical formulas which project the timing of future point redemption based on historical experience, including an estimate of the breakage for points that will never be redeemed, and an estimate of the points that will eventually be redeemed as well as the cost of reimbursing hotels and other third parties in respect of other redemption opportunities for point redemptions. Actual expenditures for SPG may differ from the actuarially determined liability. The total actuarially determined liability as of March 31, 2009 and December 31, 2008 is $665 million and $662 million, respectively. A 10% reduction in the breakage of points would result in an estimated increase of $87 million to the liability at March 31, 2009.Historically, we have derived the majority of our revenues and operating income from our owned, leased and consolidated joint venture hotels and a significant portion of these results are driven by these hotels in North America. However, since early 2006, we have sold a significant number of hotels and, in 2008 and the first quarter of 2009, we sold or closed 10 wholly owned hotels, further reducing our revenues and operating income from owned, leased and consolidated joint venture hotels. The majority of these hotels were sold subject to long-term management or franchise contracts. Total revenues generated from these sold hotels were $5 million and $22 million for the three months ending March 31, 2009 and 2008, respectively.
The decrease in revenues from owned, leased and consolidated joint venture hotels was primarily due to the severe economic crisis in the United States and globally. The decrease was also due to lost revenues from 10 wholly owned hotels sold or closed in 2008 and 2009. These sold or closed hotels had revenues of $5 million in the three months ended March 31, 2009 compared to $22 million in the three months ended March 31, 2008. Revenues at our Same-Store Owned Hotels (57 hotels for the three months ended March 31, 2009 and 2008, excluding the 10 hotels sold or closed and 10 additional hotels undergoing significant repositionings or without comparable results in 2009 and 2008) decreased 29.4%, or $143 million, to $344 million for the three months ended March 31, 2009 when compared to $487 million in the same period of 2008 due primarily to a decrease in REVPAR.
REVPAR at our worldwide Same-Store Owned Hotels decreased 30.7% to $117.78 for the three months ended March 31, 2009 when compared to the corresponding 2008 period. The decrease in REVPAR at these worldwide Same-Store Owned Hotels resulted from an 18.9% decrease in ADR to $196.25 for the three months ended March 31, 2009 compared to $241.84 for the corresponding 2008 period and a decrease in occupancy rates to 60.0% in the three months ended March 31, 2009 when compared to 70.2% in the same period in 2008. REVPAR at Same-Store Owned Hotels in North America decreased 29.8% for the three months ended March 31, 2009 when compared to the same period of 2008. REVPAR declined in most of our major domestic markets, including Atlanta, Georgia, Kauai, Hawaii and New York, New York. REVPAR at our international Same-Store Owned Hotels decreased by 32.2% for the three months ended March 31, 2009 when compared to the same period of 2008. REVPAR declined in most of our major international markets, including the Australia and Italy. REVPAR for Same-Store Owned Hotels internationally decreased 17.7% excluding the unfavorable effects of foreign currency translation.
The decrease in management fees, franchise fees and other income was primarily a result of a $26 million decrease in management and franchise revenue to $143 million for the three months ended March 31, 2009. The decrease was due to the significant decline in base and incentive management fees as a result of the global economic crisis, partially offset by the net addition of 51 managed and franchised hotels to our system since the first quarter of 2008. Other income decreased $15 million primarily due to decreases in demand at our Bliss Spa business.
During the three months ended March 31, 2009 and 2008, we recorded restructuring charges of $19 million and $8 million, respectively, in connection with our ongoing initiative of rationalizing our cost structure in light of the decline in growth in our business units. The charges in the three months ended March 31, 2009 were partially offset by the reversal of $2 million of accruals related to expected severance costs recorded during the Le Méridien acquisition that are no longer needed.
Read the The complete ReportHOT is in the portfolios of Michael Price of MFP Investors LLC.
