Starwood Hotels & Resorts Worldwide Inc. (HOT, Financial) filed Quarterly Report for the period ended 2009-06-30.
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 $4.88 billion; its shares were traded at around $26.13 with a P/E ratio of 16.8 and P/S ratio of 0.9. The dividend yield of Starwood Hotels & Resorts Worldwide Inc. stocks is 3.4%.
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, since the beginning of 2008 we sold or closed 12 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 owned revenues generated from these sold hotels were $1 million and $43 million for the three months ending June 30, 2009 and 2008, and $8 million and $68 million for the six months ending June 30, 2009 and June 30, 2008, respectively.
The decrease in revenues from owned, leased and consolidated joint venture hotels was primarily due to the continued economic crisis in the United States and internationally. The decrease was also due to lost revenues from 12 wholly owned hotels that were sold or closed in 2008 and 2009. These sold or closed hotels had revenues of $1 million in the three months ended June 30, 2009 compared to $43 million in the three months ended June 30, 2008. Revenues at our Same-Store Owned Hotels (56 hotels for the three months ended June 30, 2009 and 2008, excluding the 12 hotels sold or closed and 9 additional hotels undergoing significant repositionings or without comparable results in 2009 and 2008) decreased 33.3%, or $179 million, to $357 million for the three months ended June 30, 2009 when compared to $536 million in the same period of 2008 due primarily to a decrease in REVPAR.
REVPAR at our worldwide Same-Store Owned Hotels decreased 34.5% to $124.83 for the three months ended June 30, 2009 when compared to the corresponding 2008 period. The decrease in REVPAR at these worldwide Same-Store Owned Hotels resulted from a 22.9% decrease in ADR to $195.32 for the three months ended June 30, 2009 compared to $253.23 for the corresponding 2008 period and a decrease in occupancy rates to 63.9% in the three months ended June 30, 2009 when compared to 75.2% in the same period in 2008. REVPAR at Same-Store Owned Hotels in North America decreased 32.9% for the three months ended June 30, 2009 when compared to the same period of 2008. REVPAR declined in substantially all of our major domestic markets. REVPAR at our international Same-Store Owned Hotels decreased by 37.0% for the three months ended June 30, 2009 when compared to the same period of 2008. REVPAR declined in most of our major international markets. REVPAR for Same-Store Owned Hotels internationally decreased 27.5% excluding the favorable effects of foreign currency translation.
The decrease in management fees, franchise fees and other income was primarily a result of a $33 million decrease in management and franchise revenues to $150 million for the three months ended June 30, 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 48 managed and franchised hotels to our system since the second quarter of 2008. Other income increased $2 million primarily due to the recognition of a $7 million non-refundable deposit associated with the sale of a joint venture interest that failed to materialize, partially offset by decreases in demand at our Bliss Spa business.
Read the The complete ReportHOT is in the portfolios of HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC, 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 $4.88 billion; its shares were traded at around $26.13 with a P/E ratio of 16.8 and P/S ratio of 0.9. The dividend yield of Starwood Hotels & Resorts Worldwide Inc. stocks is 3.4%.
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 June 30, 2009 and December 31, 2008 is $662 million for each period. A 10% reduction in the breakage of points would result in an estimated increase of $85 million to the liability at June 30, 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, since the beginning of 2008 we sold or closed 12 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 owned revenues generated from these sold hotels were $1 million and $43 million for the three months ending June 30, 2009 and 2008, and $8 million and $68 million for the six months ending June 30, 2009 and June 30, 2008, respectively.
The decrease in revenues from owned, leased and consolidated joint venture hotels was primarily due to the continued economic crisis in the United States and internationally. The decrease was also due to lost revenues from 12 wholly owned hotels that were sold or closed in 2008 and 2009. These sold or closed hotels had revenues of $1 million in the three months ended June 30, 2009 compared to $43 million in the three months ended June 30, 2008. Revenues at our Same-Store Owned Hotels (56 hotels for the three months ended June 30, 2009 and 2008, excluding the 12 hotels sold or closed and 9 additional hotels undergoing significant repositionings or without comparable results in 2009 and 2008) decreased 33.3%, or $179 million, to $357 million for the three months ended June 30, 2009 when compared to $536 million in the same period of 2008 due primarily to a decrease in REVPAR.
REVPAR at our worldwide Same-Store Owned Hotels decreased 34.5% to $124.83 for the three months ended June 30, 2009 when compared to the corresponding 2008 period. The decrease in REVPAR at these worldwide Same-Store Owned Hotels resulted from a 22.9% decrease in ADR to $195.32 for the three months ended June 30, 2009 compared to $253.23 for the corresponding 2008 period and a decrease in occupancy rates to 63.9% in the three months ended June 30, 2009 when compared to 75.2% in the same period in 2008. REVPAR at Same-Store Owned Hotels in North America decreased 32.9% for the three months ended June 30, 2009 when compared to the same period of 2008. REVPAR declined in substantially all of our major domestic markets. REVPAR at our international Same-Store Owned Hotels decreased by 37.0% for the three months ended June 30, 2009 when compared to the same period of 2008. REVPAR declined in most of our major international markets. REVPAR for Same-Store Owned Hotels internationally decreased 27.5% excluding the favorable effects of foreign currency translation.
The decrease in management fees, franchise fees and other income was primarily a result of a $33 million decrease in management and franchise revenues to $150 million for the three months ended June 30, 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 48 managed and franchised hotels to our system since the second quarter of 2008. Other income increased $2 million primarily due to the recognition of a $7 million non-refundable deposit associated with the sale of a joint venture interest that failed to materialize, partially offset by decreases in demand at our Bliss Spa business.
Read the The complete ReportHOT is in the portfolios of HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC, Michael Price of MFP Investors LLC.
