April 26 (Bloomberg) -- Starwood Hotels & Resorts Worldwide Inc., owner of the luxury St. Regis and W brands, said first-quarter earnings rose more than fourfold, driven by sales of vacation units at the company’s new resort in south Florida.
Net income increased to $128 million, or 65 cents a share, from $28 million, or 14 cents, a year earlier, the Stamford, Connecticut-based company said in a statement today. Revenue fell 2 percent to $402 million.
Earnings were buoyed by deals at Miami Beach’s St. Regis Bal Harbour Resort, which started selling units at the end of last year and opened in January. Starwood’s hotel operations were hurt by slower demand in Europe, according to Nikhil Bhalla, senior lodging analyst at FBR & Co. in Arlington, Virginia.
“A majority of the increase in profit is from the vacation-ownership side,” he said in an interview before earnings were announced. “On the hotel side, Europe likely held them back because of the currency impact and the weak economic situation there.”
Revenue per available room, an industry measure of occupancy and rates, climbed 5.8 percent in the first quarter for hotels open worldwide at least a year. It rose 7.1 percent in North America and fell 1.9 percent in Europe. Demand in Europe, which accounts for 12 percent of the company’s room count, is likely to remain weak this year, Chief Executive Officer Frits van Paasschen said in February.
Starwood said in February it expects global revpar to grow 5 percent to 7 percent for this year.
Marriott International Inc., the largest publicly traded U.S. hotel chain, last week surged the most in almost five months after reporting an increase in earnings and raising its 2012 forecast amid climbing business-group demand.
Occupancies this year through March at luxury hotels in the U.S. climbed to 71 percent from 68 percent a year earlier, according to Smith Travel Research Inc. of Hendersonville, Tennessee. That compares to an increase to 65 percent from 63 percent among all hotel types in the top 25 U.S. markets.
Separately, Starwood today said it signed an agreement to manage three hotels in Dubai being built by closely held Al Habtoor Group LLC. The hotel complex will have one million square feet (93,000 square meters) of space, the companies said in a joint statement.
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