Starwood Hotels & Resorts said Tuesday that it will spin
off its vacation-ownership business.
The hotel company will structure the spinoff of Starwood
Vacation Ownership as a tax-free transaction involving the pro-rata
distribution of the division’s stock to existing Starwood shareholders.
Starwood, which said the transaction would take place by
year’s end, didn’t disclose further financial details of the spinoff.
Last year, revenue for Starwood Vacation Ownership was $674
million, a 27% decline from a year earlier. The division’s operating income
fell 55%, to $177 million.
Marriott International spun off its vacation-ownership
division in November 2011. Marriott Vacations Worldwide’s share price has more
than tripled since then, from $22 to $73.
Also, Starwood reported Tuesday that net income in the fourth
quarter jumped 83%, to $234 million, from a year earlier. The company’s shares
were up about 8% in Tuesday trading.
The company attributed the profit increase to higher room
demand, lower operating costs and higher costs from a year earlier related to
restructuring and income taxes.
Worldwide revenue per available room (RevPAR), excluding
currency effects, rose 4.4%. A 5.8% RevPAR jump in North America more than
offset more tepid demand in Africa, the Middle East and parts of Asia.
Starwood’s Westin brand had a 5.8% RevPAR increase, while
the Aloft badge’s RevPAR climbed 8.7%.