Starwood Hotels & Resorts Worldwide had a weaker fourth quarter over the same time last year as net income dropped to $128 million—$14 million lower than a year earlier.
Fourth-quarter revenue declined to $1.51 billion from $1.53 billion a year earlier, Starwood said. Revenue per available room rose 5.3 percent percent worldwide and 6.1 percent in North America when adjusted for currency fluctuations.
Earnings reportedly declined as sales at its St. Regis Bal Harbour Resort in Florida weren’t repeated and hotel revenue fell. Starwood sold the hotel to Qatar's Al Faisal Holding Co. for $213 million in January.
Patrick Scholes, an analyst for SunTrust Robinson Humphrey, told Bloomberg that "the primary reason for a poor year-over-year comparison is that last year they had income from the Bal Harbour condo sales."
Fourth-quarter results were also affected by slowing demand growth in Asia and oversupply concerns. Starwood's RevPAR for hotels open at least one year in Asia, excluding China, fell 3 percent in the fourth quarter.
“Asia is their weak point, specifically China,” Scholes said. “The challenge is that there has been such strong hotel development, which was OK when GDP was growing but now that things have slowed, demand for all these hotels is lower.”
Things are much better at home and Starwood's outlook for 2014 is rosier. Starwood said RevPAR will probably grow 5 percent to 7 percent in 2014, compared with 5 percent to 6 percent last year. The company’s North American hotel occupancies are at a record, it said.
"Early indications are that our U.S. and European hotels will see continued strong rate growth," said Starwood CEO Frits van Paasschen said. "In the fast-growing markets, our view is that—in spite of today's market uncertainty—the long-term trends in urbanization and rising wealth will fuel secular growth in demand for travel."