DOW JONES NEWSWIRES
Starwood Hotels and Resorts Worldwide Inc. (HOT) said Monday it
is pushing ahead with its plans to revitalize its Sheraton chain
despite weak demand across the industry and slumping revenue per
available room.
The company - which also operates hotels under the W Hotels,
Westin and St. Regis brands - said the overhaul plan, initiated in
2007, is nearly 70% complete. The effort includes spending more
then $2 billion on new hotels, $1.3 billion for renovations and
$400 million for other improvements.
Starwood, like many others during the recession, is planning to
slash 2009 capital spending. However, the majority of investments
for the Sheraton overhaul were made before the economic slowdown
accelerated last fall.
Many of the improvements are focused on its North American
locations, where customer satisfaction was inconsistent. But the
company reports improvement recently. More than half of the
Sheratons in North America have been upgraded and another 30 are
scheduled for this year. Two dozen hotels that didn't meet the
chain's standards have left the brand.
Starwood opened 26 new Sheratons last year, including 16 in
North America, with an additional 20 slated for 2009. Starwood
operates 960 locations in 97 countries.
The company's shares, which are down roughly 60% in the past
seven months, closed at $15.32 on Friday and didn't trade
premarket. In recent months, the major credit ratings have pushed
Starwood into junk territory amid concerns about both the company
and the industry as a whole.
-By Tess Stynes, Dow Jones Newswires; 201-938-2473;
tess.stynes@dowjones.com