Thursday, July 24, 2008

Starwood Second Quarter 2008 Financial Results Show Weakness in Hawaii Time Share Market

Starwood Hotels and Resorts Worldwide, Inc. today reported second quarter 2008 financial results. Among other things, revenues from vacation ownership and residential sales decreased 29.2% compared to 2007.

Starwood reported that originated contract sales of vacation ownership intervals (i.e., time shares) decreased 25.7% primarily due to the sellout of the Company’s Westin Ka’anapali Ocean Resort North in Maui and a decline in demand. The average price per vacation ownership unit sold decreased 19.1% to approximately $21,000, driven by a higher sales mix of lower priced biennial inventory in Hawaii. The number of contracts signed decreased 7.7% when compared to 2007.

Vacation ownership results were ahead of the Company’s expectations for the second quarter; however, the Company now expects that full year 2008 results will be lower than prior guidance (i.e., prediction of near-future profit or loss) due to lower sales in Hawaii and of its fractional product, as well as lower financing income.

Forbes reports that Starwood shares fell $4.63, or 11.6 percent, to $35.19 in afternoon trading Thursday, and that stock has fallen from a 52-week high of $74.05 last July to touch a low of $30.26 last week.

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