Starwood Hotels & Resorts Inc.’s North American hotel occupancies are at a record, giving the owner of the Sheraton and W brands greater ability than ever to raise rates in the region, Chief Executive Officer Frits van Paasschen said.
“There is a shortage of high-end hotels in the U.S.,” he said today in a Bloomberg Television interview with Erik Schatzker and Stephanie Ruhle at the World Economic Forum in Davos, Switzerland. “We have more pricing power today than we’ve ever had before.”
Increasing wealth and travel demand will boost revenue in 2014, Stamford, Connecticut-based Starwood said in its Oct. 24 earnings report. Revenue in the third quarter climbed 3.6 percent from a year earlier to $1.51 billion. Revenue per available room, an industry gauge of occupancies and rates, rose 5.8 percent in North America and 4.7 percent worldwide when adjusted for currency fluctuations, Starwood said.
Starwood gets about half of its business from the company’s loyalty program, van Paasschen said in the interview.
Earlier today, Starwood said it sold the St. Regis Bal Harbour Resort in Miami to a unit of Qatar’s Al Faisal Holding Co. for $213 million, part of its strategy to reduce its real estate holdings. Starwood will continue to manage the property, which includes a 27-story oceanfront hotel with 207 rooms, the company said today in a statement.
“The sale of this trophy asset marks another step forward in Starwood’s pursuit of an asset-light strategy as we look to sell owned real estate at the right time to the right owners,” Simon Turner, president of global development, said in the statement. “We continue to see strong interest in our remaining assets from investors around the world.”
Editors: Christine Maurus and Daniel Taub.