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Further declines in revenue expected
Starwood Hotels and Resorts Worldwide has reported a sharp drop in pre-tax earnings in the first quarter 2009.
Adjusted pre-tax earnings fell 34.5% to $167m compared to $255m in the same period last year.
The up-market hotel group blamed a steep worldwide drop in revenues per available room (revPAR) across its managed, franchise and owned properties.
RevPAR for managed and franchised hotels fell 23.5% across all regions year-on-year.
RevPAR for Starwood-owned hotels declined 31.6%.
Starwood's ceo Frits van Paasschen said pre-emptive cost-cutting had resulted in a better result than expected, despite falling revPAR.
"The current environment has pushed us to be aggressive in cutting costs and judicious in our capital allocation," Mr Paasschen said.
"Looking past this economic crisis, we remain committed to our long-term growth strategy to create substantial value for our shareholders."
Starwood said plans to open more properties were still on track, despite a system-wide fall in occupancy to 57.3% from 64.7%.
Mr Paasschen added: "By the end of this year, our system of hotels will cross the 1,000th hotel milestone, including 250 new openings and 350 renovated hotels since 2007, making us well-positioned to own the upswing as the global economy stabilises."
The Group signed 18 hotel management and franchise contracts in the first quarter, including 17 new builds and one renovation.
While 16 new properties were added in the three months to March, 11 were removed.
Starwood's luxury brands include Sheraton, Westin, W Hotels and St Regis.