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Starwood Hotels & Resorts still has plenty of room for growth in major cities around the world, including Dubai, according to CEO and president Frits van Paasschen.
He was speaking during an earnings call after the company released its first quarter results, which showed net income of US $137 million during the first three months of the year, or 72 cents a share.
Although considerably down on the same period in 2013, when earnings hit US $213 million, or US $1.09 per share, the figures were still well ahead of analysts’ expectations.
Starwood CEO and president Frits van Paasschen said: “Looking around the world at large cities, we still have a long way to go before we reach saturation. Take Dubai, where we now have 15 hotels and another five on the way or Shanghai, where we have 11 open and four on the way.”
In Africa and the Middle East, Revenue Per Available Room (RevPAR) was up 2.1% in constant dollar terms and up 1.1% in actual dollar terms to US $140.34. This compared to a worldwide systemwide RevPAR increase of 6.3% in constant dollars (5.0% in actual dollars) to US $116.43.
Speaking about RevPAR growth in the region, van Paasschen added: “Egypt, with 11 hotels for us, continues to be a drag on the region. We’re hopeful that this year’s elections will bring stability, but our outlook for the year does not reflect a dramatic change there.
“Elsewhere in the region, we saw improved performance in Saudi Arabia and strength in Qatar offset by mixed results in the Emirates.”
Commenting on the general performance in the region, Starwood vice chairman and chief financial officer Vasant Prabhu said: “In Africa and the Middle East, the story remains country-specific. Egypt is hurting as it laps the recovery we saw in the first half of last year before political uncertainty returned.
“Saudi and the Gulf are doing well. South Africa was up double-digits while Nigeria was flat with little or no inbound travel due to instability.”
Occupancy rates in Africa and the Middle East hit 65.5% during the period, up from 65.3% in Q1 2013. Meanwhile average daily rates were up 0.7% in actual dollars to US $214.19.