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Starwood's first quarter results for 2016 ‘exceed expectations'

03 May 2016 by
Starwood's first quarter results for 2016 ‘exceed expectations'

Starwood Hotels & Resorts Worldwide, which is on the verge of being acquired by Marriott International, has said its financial results for the first quarter of 2016 exceeded expectations, despite a net income decrease of 9.1%.

For the three months to 31 March, the company reported a net income of $90m (£61.6m), down from $99m (£67.8m) for the same period last year.

Worldwide system revenue per available room (revpar) decreased 1.3%, but increased 1% in constant dollars, compared with 2015, while adjusted EBITDA for the period was $281m (£192m). Occupancy rose to 67.2% from 66.4% for worldwide hotels.

Starwood had around 540 hotels in the active pipeline, representing roughly 118,000 rooms.

Thomas Mangas, chief executive of Starwood, said: "We had a very strong quarter, despite facing a tough macroeconomic environment and the distraction of a very public bidding war for our company. Thanks to the hard work, dedication and perseverance of our highly talented associates around the world, we delivered adjusted EBITDA and EPS [earnings per share] well ahead of our expectations.

"We achieved these results by staying focused on execution. With revpar in line with our expectations and solid net room growth, we experienced the highest core fees growth in the last six quarters."

Alan Schnaid, chief financial officer, added: "Our outlook for the rest of 2016 remains strong. We are maintaining our expectations for full year revpar growth and increasing our guidance ranges for both EBITDA and EPS. As we look ahead, we remain bullish on the prospects for global hospitality, and believe that the future of our company combined with Marriott is especially bright."

On 8 April this year, the stockholders of Starwood and Marriott approved proposals relating to Marriott's £8.8b acquisition.

The deal, which is expected to be complete by mid-2016, will create a hotel giant of 1.1 million rooms across more than 5,500 hotels, involving 30 brands. The transaction is subject to remaining regulatory approvals, including in the European Union and China, and the satisfaction of other customary closing conditions.

Shareholders approve Marriott and Starwood merger >>

Marriott-Starwood merger back on track as Anbang pulls out of bidding war >>

Starwood tug of war continues as Marriott ups offer >>

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