Friday, January 30, 2009
Author: Jason Tremblay | Topics: Marriott Timeshare, Starwood Timeshare, Timeshare Sales, Wyndham Timeshare
Starwood Hotels and Starwood Timeshares have just released a report stating that their fourth quarter profits fell by 46 percent. According to a statement released by Starwood, net income fell from $146 million (74 cents per share) to $79 million (43 cents per share), year-over-year. CEO Frits van Paasschen has authorized job cuts, the closing of Starwood timeshares sales centers, restaurant closings, and has suspended share buybacks. Forbes.com states that fourth quarter earnings at Starwood Hotels and Starwood timeshares was hurt by severance costs and a writedown for two vacation ownership projects.
“At the current time, given significant uncertainty in the global economy, it is very difficult to provide any definitive guidance looking out four quarters,” the Starwood statement read.
As bad as all this sounds, shares of Starwood stock rose following the release of the report, because share values were higher than predicted by analysts. At the same time Starwood stocks were gaining, Marriott International fell 1.3 percent; Choice Hotels was down .6 percent, and Wyndham Worldwide dropped by 7 percent. (source: http://uk.reuters.com)
Starwood Hotels and Starwood Timeshares to Receive Tax Refund
Starwood Hotel and Timeshare company is due for an income tax refund from the federal government – a $200 million refund. For several years, Starwood has been in negotiations with the IRS, regarding the tax treatment of the sale of World Directories in 1998. Starwood and the IRS have finally reached an agreement, and the refund, scheduled to be received later this year – couldn’t come at a better time.
No Reason for Starwood Timeshare Owners to Panic
Starwood, like so many other timeshare companies, is feeling significant pain from the decline in consumer spending and the tight credit market. But in the vein of “what doesn’t kill us, makes us stronger,” Starwood and other hoteliers and timeshare companies will likely emerge from the recession as stronger companies, with better internal checks and balances, fewer non-performing properties on their books, and a leaner, cleaner approach to doing business. Starwood is moving forward with expansion plans that include opening 100 new hotels this year; expanding its hotel network by more than 40 percent over the next five years; and reaching the significant milestone of opening its 100th resort later this year.