Starwood Hotels Remains On Track With $4 Billion Sheraton Overhaul

   DOW JONES NEWSWIRES 
 

Starwood Hotels and Resorts Worldwide Inc. (HOT) said Monday it is pushing ahead with its plans to revitalize its Sheraton chain despite weak demand across the industry and slumping revenue per available room.

The company - which also operates hotels under the W Hotels, Westin and St. Regis brands - said the overhaul plan, initiated in 2007, is nearly 70% complete. The effort includes spending more then $2 billion on new hotels, $1.3 billion for renovations and $400 million for other improvements.

Starwood, like many others during the recession, is planning to slash 2009 capital spending. However, the majority of investments for the Sheraton overhaul were made before the economic slowdown accelerated last fall.

Many of the improvements are focused on its North American locations, where customer satisfaction was inconsistent. But the company reports improvement recently. More than half of the Sheratons in North America have been upgraded and another 30 are scheduled for this year. Two dozen hotels that didn't meet the chain's standards have left the brand.

Starwood opened 26 new Sheratons last year, including 16 in North America, with an additional 20 slated for 2009. Starwood operates 960 locations in 97 countries.

The company's shares, which are down roughly 60% in the past seven months, closed at $15.32 on Friday and didn't trade premarket. In recent months, the major credit ratings have pushed Starwood into junk territory amid concerns about both the company and the industry as a whole.

-By Tess Stynes, Dow Jones Newswires; 201-938-2473; [e-mail]