Starwood Reports $107 million 4Q Loss

by Ella FAIRCHILD on February 5, 2010

This week Starwood Hotels & Resorts reported a 4Q loss of $107 million, or 59 cents per share due to vacation-ownership business-related charges. However, the hospitality company was still able to beat projections from analysts, which gives signs that business and leisure travel is recovering slowly.

Not including one-time charges from weakened time-shares, Starwood actually earned 51 cents per share. This beat Wall Street’s 22 cents per share estimate, which sent the company’s shares up 3.4% in Thursday trading.

Frits D. Van Paasschen, the hospitality group’s chief executive, said that their continued focus on well-managed costs is what helped them beat expectations. He pointed out that RevPAR (revenue per available room) was the strongest last quarter than it has been since the 3Q of 2008. Demand for lodging continued to improve in the 4Q, and group and business transient posted positive bookings, he continued. Paasschen added that their portfolio is set to recover in 2010 after dealing against headwinds all throughout last year.

The economic crisis around the world, which first started in 2008, made for a tough business year for the travel industry. Rental car companies, airlines and hotels have all struggled as businesses and families cutback on their travel expenses in order to save money - some even cut it out of their budgets altogether.

However, there are signs of recovery everywhere, even though they may be small right now. Travel companies are just starting to see an increase in bookings, but this doesn’t mean that this year will breeze by. It will still be a tough year, and any little slip could send everything back to ground zero.

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