Starwood Hotels & Resorts Worldwide, Inc. (HOT)
Q4 2009 Earnings Call Transcript
February 4, 2010 10:30 a.m. ET

Executives

Jason Koval – Vice President of Investor Relations
Frits D. van Paasschen - President and Chief Executive Officer
Vasant M. Prabhu – Executive Vice President and Chief Financial Officer

Analysts

Joseph Greff - J.P. Morgan
Steven Kent - Goldman Sachs
Josh Attie - Citigroup
David Loeb - Robert W. Baird & Company, Inc.
Alistair Scobie - Atlantic Equity
William Crow - Raymond James and Associates
David Katz - Oppenheimer & Co.
Bryan Maher - Collins Stewart
Jeffrey Donnelly - Wells Fargo Securities
Janet Brashear - Sanford C. Bernstein
Smedes Rose - Keefe, Bruyette & Woods
Amanda - Wedbush Morgan Securities
Chris Woronka - Deutsche Bank
Patrick Scholes - Friedman, Billings, Ramsey Group, Inc.

Presentation

Operator

Good morning. My name is Silvia [ph]. And I will be your conference operator today. At this time I would like to welcome everyone to the Starwood Hotels Fourth Quarter 2009 Earnings Release conference call. All lines have been placed on mute to prevent background noise. After the speaker''s remarks there will be a question-and-answer session.

If you would like to ask a question during this time, simply press star then the number one, on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you, Mr. Koval, you may begin your conference.

Jason Koval

Thank you, Selvia. And good morning, everyone. Thanks for joining us this morning for Starwood''s fourth quarter 2009 earnings call. Joining me today I have Frits van Paasschen, our CEO and Vasant Prabhu, our CFO. We will be making statements on this call related to Company plans, prospects and expectations that constitute forward-looking statements under the Safe Harbor provision of the Securities Reform Act of 1995.

These forward looking statements generally can be identified by phrases such as Starwood or its management believes, expects, anticipates, foresees, forecasts, estimates or other words or phrases of similar import.

All such statements are based on our expectation as of today and should not be relied upon as representing our expectations as of any subsequent date. Actual results might differ from our discussion today.

I point you to our 10-K and other SEC filings available from the SEC or through our offices here and on our website at www.starhotels.com for some of the factors that could cause results to differ.

With that I am pleased to turn the call over to Frits for his comments.

Frits D. van Paasschen

Thank you, Jay and thanks for joining us today for our fourth quarter call. I would like to begin by reflecting on just how bleak the economic outlook was one year ago. On January 2009, incoming U.S. Treasury Secretary Timothy Geithner declared that the economy was on, the verge of collapse.

Recently by contrast, he said, we are back from the brink and we have traveled a long way from January and I couldn''t agree more. Even a tepid recovery will feel good. For the lodging business, 2009 was the worst downturn in our lifetimes. RevPar was down over 20% for Starwood.

Our competitive strengths became temporary but significant head winds. In fact, upper upscale and luxury hotels were hit the hardest. And these segments generate over 95% of our profits. Our owned hotels saw a 55% drop in EBITDA and the dollar strength as a safe haven currency added to the operating declines outside of the U.S. RevPar comparisons were worse than the second quarter with RevPar often eye popping 30% plus.

During the summer, we saw the beginning of stabilization. Leisure travel showed signs of life with weekend occupancies rising and RevPar improving to minus 20% in the third quarter. By the way, before 2009, none of us ever expected to use the words improving and minus 20% in the same sentence.