• Starwood’s strong trading gives room for deals

Starwood's mission to become the leading global hotel and lifestyle services company was boosted by what was widely regarded as exceptional first quarter results.

Although the headline profit figure fell, due to the timeshare accounting issue that has afflicted other US hotel companies including Marriott International and Hilton, the underlying trend was up 17.1%.

Worldwide revpar figures for the system, excluding Le Meridien, were up 10.3%. Management and franchise fees increased 15.8% or 34.2% if the Meridien properties are included.

This year the company expects to sign 150 new hotel contracts and in the first quarter 28 were added representing 7,700 rooms. The development pipeline has 260 hotels with 76,000 rooms in it.

A key focus is in the select service category with the launch of Aloft, the start of work on Extended Stay by Westin and a repositioning of Four Points.

Future growth may not just come via new contract signings however. Although the company has repurchased $447m worth of shares so far this year, it has a strong balance sheet that appears under leveraged. Analysts at Citigroup estimate it could take on $1.8bn more of debt.

Were the company to venture more towards an \asset lite\ model rather than its declared intention of being \asset right\, even more firepower could be unleashed.

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