Starwood posts second-quarter loss

By Kevin Zimmerman

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Starwood Hotels and Resorts Worldwide Inc. posted a loss of $263 million, or $1.56 per share, for the second quarter of 2016, compared with a profit of $136 million or $0.79 per share a year earlier. Revenue was up 0.4% to $1.25 billion.

The Stamford-based Starwood said that the loss was largely driven by an after-tax loss of $228 million on discounted operations related to its May spinoff of Vistana, its former vacation ownership business, to Interval Leisure Group.

The hotel chain is in the midst of being absorbed by Marriott International Inc., which is expected to wrap up later this year.

For the six months ending June 30, Starwood’s income from continuing operations was $38 million, compared to $193 million for the same period last year. Net loss was $173 million or $1.02 per share, compared to income of $235 million and $1.37 per share for the same period in 2015.

Revenue per available room (Revpar) was up 0.7 percent at comparable worldwide hotels and increased by 1.4 percent in constant currencies.

“This slower rate of Revpar growth will contribute to lower fee growth in the second half of 2016 than previously expected,” said Starwood CFO Alan Schnaid. “However, we expect that the strong performance of our owned hotels in the first half of the year and our lower SG&A [selling, general and administrative expenses] will offset the impact of lower fee growth and partially offset both the loss of earnings from the hotels we sold this year and the impact of foreign exchange.”

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