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In preparation for HOT's Q4 earnings release tomorrow, we’ve put together the recent pertinent forward looking company commentary.

Starwood Says Hotel Conversion Opportunities in North America Expected to Rise in 2012 with Uptick in Portfolio Transactions (1/24/2012)

  • “We ended 2011 with a renewed sense of momentum in the North American deal environment and, as we enter 2012, we’ve got a close eye on several transactions which may lead to an increase in conversion opportunities”
  • “Announced today that it opened 27 hotels in North America in 2011, more than it had predicted”
  • “Looking ahead to 2012, Starwood is slated to open 20 new properties in North America, not including late breaking in-the-year conversions which are expected to result in additional new hotels this year.”
  • “Conversions continue be the primary driver of new hotel growth in developed markets. In 2011, 75% of Starwood’s openings and 63% of its new deal signings in North America were conversions.”

St. Regis Hotels & Resorts Continues Remarkable Global Growth with the Debut of The St. Regis Bal Harbour Resort & Residences (1/20/2012)

  • “The St. Regis Bal Harbour Resort offers guests a new dimension of bespoke luxury with 243 guest rooms and suites and 245 private residences, all offering expansive private balconies with ocean views, in three glass towers rising 27 stories above a sprawling stretch of beach.”

YOUTUBE FROM Q3 2011 CONFERENCE CALL

  • We see the balance of this year in-line with what we said on our Q2 call.”
    • Full year EBITDA: $980 to $990MM
    • EPS will come in at around $1.75 to $1.79
    • Full year RevPAR remains at 7% to 9%
    • Owned EBITDA margins: 150 to 200bps
    • SG&A: +3% to 4%
    • “SVO will be at the high end of expectations.”
    • “Year-to-date we have opened 53 hotels and remain on track to open approximately 80 hotels in 2011.”
  • “Our Q4 EBITDA range of $270 million or $280 million was negatively impacted by $4 million to $5 million since we last spoke, due to the strengthening of the dollar.  Owned EBITDA in Q4 will be negatively impacted by approximately $8 million versus last year due to renovations and pre-opening costs at our new St. Regis Bal Harbour. In the fourth quarter, we will recognize income from Bal Harbour residential unit closings in addition to ur core EBITDA.”
  • “Overall for 2012, group pace is up mid single digits. Corporate rate negotiations are only just beginning but unlike last year, our customers expect higher rates as they see occupancy and virtually no new supply in key cities.”
  • 2012 guidance:
    • "Our worldwide RevPAR range of 4% to 8% reflects a sustained recovery at the high end and a more anemic one at the low end”
    • "6% to 8% RevPAR growth and the upper half of our EBITDA range would be in-line with this Q4 momentum being sustained through 2012.
    • “If we actually have 4% RevPAR growth, the bottom of our range, owned EBITDA growth becomes hard to realize, despite our cost containment initiatives. SVO is relatively flat in all scenarios, in synch with our strategy for this business. So whatever growth we get at a 4% RevPAR scenario will have to come from our fee business.”
    • EBITDA: $1.03 to $1.12BN
    • EPS: $1.96 to $2.25
    • “RevPAR implies a continued growth in market share of at least 100 basis points and it implies rigorous cost control. You'll note that between 2010 and 2012, we expect SG&A to be up only about 2% to 3% per year.”
    • “An estimated impact of about $20 million from completed asset sales this year, planned renovations, and foreign exchange.”
  • “We expect to have ample cash from these investments, generated by operations, Bal Harbour, and timeshare.”
    • “In North America… group pace heading into Q4 is good, with more than 90% of group business already on the books. Secondary indicators like leads and cancellations also remain positive. Transient booking momentum remains strong and at this point we're not seeing any changes in trend. As such, we are projecting that Q4 RevPAR growth in North America will remain generally in-line with what we saw in Q3. We are closely watching Canada, which is showing some signs of softness, partially due to the strong Canadian dollar.”
      • Europe: “We have seen some softening in booking trends as we entered September. As such, we are projecting that Q4 RevPAR growth in Europe will be in the 3% to 4% range. At this point it is too early to tell if this is a generalized trend or some local soft spots.”
      • North Africa and ME: “Year-over-year fee growth comparisons will suffer in Q4 since we do not expect to earn any incentive fees in North Africa, which are generally recorded in the fourth quarter. In total, our 2011 fees in North Africa will be down $10 million, which is in-line with what we had estimated early this year.”
      • “As we enter Q4, booking pace remains on trend, leads are up, and cancellations are down. India is weak and Thailand is severely disrupted by the floods. As such, we expect a small sequential slowdown in Asia RevPAR growth in Q4.”
      • “We do not expect this [3Q] level of growth to continue into Q4 based on current booking trends, nevertheless Latin America will grow in the double digits.”
      • “At SVO, tours are up as are close rates versus last year. The business remains stable and predictable. We hope to complete a securitization in the fourth quarter if terms are attractive. Default trends continue to improve and are now at 2006 levels. Assuming we complete the securitization, SVO will generate over $200 million in cash in 2011.”
      • “We will have some significant capital projects underway next year including the shutdown of the Gritti Palace in Venice and the Maria Cristina in Spain. Major renovations will also be on at the Westin Maui, the Westin Peachtree, and the Sheraton Rio. We are also shutting down two other hotels in the U.S. to convert them to Alofts.”“In terms of exchange rate impacts, as we have done for the past several years, we have hedged about half our euro profit exposure in 2012 at $1.44 to mitigate the euro risk as best we can.”
      • “Not included in our 2012 outlook range is income from residential unit closings at Bal Harbour. TCOs are coming in as planned and we anticipate starting closings in mid November. We have been in contact with buyers and expect that we will have several closings before the end of the year. The bulk of the closings of contacts previously signed will be in 2011. There will be significant revenue, income and cash from Bal Harbour in 2012. We will separately identify Bal Harbour numbers so you can clearly track performance of our core hotel business. As Bal Harbour flows through our income statement, it will affect our reported tax rate and our interest expense, as capitalized interest is expensed.”
      • For 2011 we're estimating approximately $10 million in earnings, $0.03 in EPS and $30 million in cash. The numbers for 2012 will be substantially higher. We continue to expect that we will generate almost $1 billion in revenue from selling all 307 condos at the St. Regis Bal Harbour. By the end of this year, we expect that 70% of this value will be under contract. Average price per square foot on units under contract exceeds $1,300. Sales have been robust year-to-date in 2011, well above our initial expectations. And since we're close to completion, we've asked for and received almost 50% in cash deposits on 2011 contracts.”
      • “Our priorities for cash use remain reinvesting in our business to drive growth in our pipeline and our owned hotels, paying down maturing debt, and returning cash to shareholders. We will shortly announce our 2011 dividend and will execute stock buybacks as we have in the past, if our criteria are met.”
      • [2012 FCF] “We would estimate free cash flow at least in the $250 million to $300 million range after payment of dividends, so maybe a little higher than that once you consider dividends. So let's say $350 million to $400 million in free cash flow.”
      • [Group Bookings] “Our pace going into the fourth quarter is up roughly 6%, with the majority of that being rate-driven. We continue to look for higher rate of business so we're pushing for rate. And occupancies and year-over-year gain in room nights is roughly flat
      • “There isn't a lot of downside [to 2012 RevPAR guidance] if RevPAR is flatlined in Continental Europe, because that would be factored into the ranges that we've given.”
      • “In terms of extra F&B spend, we're seeing some strength there. We've also worked, by the way, on continuously improving our margins from our food and beverage and our catering operations. And so even if we weren't to see a complete recovery on the spend there, we're absolutely seeing better flow-through from what we have.”
      • “A solid BBB, the way the rating agencies calculate it, which is very different than a simple net debt to EBITDA calculation, would be somewhere in the two and a half to three times debt to EBITDA range. And we should be in those ranges based on current trends by the latter part of next year.”