Starwood profits drop by 71% following terror attacks
US-based hotel giant Starwood has announced a 71% drop in profits in its third-quarter results, released today. It blames the 11 September terrorist attacks in the USA.
In the three months ending 30 September, profits stood at $30m (£21m) compared with $103m (£72m) in the same period last year. Turnover fell by 12% to $965m (£671m).
Revenue per available room (revpar) in North America fell by 19.4% compared with 2000. Internationally it fell by 8.2%. Between 15-30 September, occupancy rates in North America dropped by 32 percentage points to 48% and revpar was slashed by 49%.
But from 1-21 October, occupancy rates recovered to 66%. This is still down by 13 percentage points on the same period last year.
Since the attacks, the company has laid off 10,000 full-time staff.
Chairman and chief executive Barry Sternlicht said: "The events of 11 September stunned and horrified the entire world. They also changed the travel industry and exacerbated already weak business travel trends…the travel industry and Starwood are being tested like never before."
The company estimated that in the final three months of the year, repar will fall by 25%-30% compared with 2000 but admitted that "it is impossible to predict results with any degree of precision."
