NEW YORK – Starwood Hotels & Resorts Worldwide Inc. (HOT) posted a 15 percent rise in quarterly profit Thursday as business travel and foreign visitors to the United States increased.
Starwood, whose shares jumped to a 52-week high, said net income rose to $100 million, or 46 cents a share, in the fourth quarter from $87 million, or 42 cents a share, a year earlier.
Excluding one-time items, earnings were 57 cents a share, blowing past an average forecast of 45 cents among analysts polled by Reuters Estimates.
"It was a solid quarter and reflective of the pickup in business travel as well as international travel," Bear Stearns analyst Joe Greff said.
White Plains, N.Y.-based Starwood benefited from a rise in foreign visitors to cities such as New York, Miami, Los Angeles and San Francisco, he said.
Starwood, owner of the upscale Sheraton, W and Westin brands, said higher revenue per available room, a key measure of health in the lodging industry, was driven by an increase in room rates of more than 70 percent.
Starwood has been leading the recovery in the hotel industry. The chain has a concentration of properties in Boston, New York and Washington, the first cities to raise room rates in 2004 after a three-year industry slump.
Fourth-quarter revenue per room rose 11.1 percent at owned hotels open at least a year, and 11 percent at owned hotels in North America.
In January, revenue per room rose 9.5 percent at owned hotels open at least a year in North America, Starwood said.
Fourth-quarter revenue rose 20.5 percent to $1.44 billion, while revenue at owned hotels open at least a year rose 9.7 percent to $867 million.
Analysts had expected revenue of $1.32 billion.
Shares of Starwood climbed as high as $59.84 on the New York Stock Exchange (search) before settling at $59.51, up $1.21, or 2 percent. The shares have risen almost 44 percent in the past five months.
Starwood rival Hilton Hotels Corp. (HILT) on Monday also said fourth-quarter revenue per room rose as increased travel fueled higher room rates, a trend expected to pick up this year.
Industry experts have forecast that hotel revenue will continue to increase this year, with revenue per room likely rising 7.3 percent.
Another Starwood rival, Marriott International (MAR), is to report quarterly results next Tuesday.
Starwood Chief Executive Steven Heyer said fourth-quarter results were helped by the company's strong brands and good locations for its urban properties.
"But it is just as clear that we are enjoying significant share gains versus our competitive set, beyond that explained by location, owing to the resurgence and effectiveness of our brands," he said in a statement.
Starwood forecast first-quarter earnings of 30 cents a share on revenue per room growth of 6 percent to 8 percent at owned hotels open at least a year.
For the full year, it expects earnings of $2 a share on revenue of $5.9 billion.
Analysts, on average, expect 26 cents a share in the first quarter and $1.92 per share for the year.