Starwood Hotels & Resorts Worldwide Inc., which operates the W, Sheraton and St. Regis brands, announced Thursday a 28 percent drop in its quarterly profit, Reuters reports. For the second quarter of 2008, the company's net income fell to $105 million in comparison to $145 million from the second quarter of 2007. Starwood's stock fell 10 percent to $35.84.
The company cited the weak U.S. economy as a primary reason for the drop in revenue. "While international lodging demand remains solid, the economic picture in the U.S. has continued to deteriorate, with lodging demand dropping significantly in May," said Chief Executive Frits van Paasschen in a statement.
Starwood's revenue per available room (revpar) increased 9.6 percent internationally, but only 3 percent in North America. Nearly 55 percent of Starwood's management and franchise fees are generated outside the U.S.