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Starwood Hotels & Resorts CEO Frits Van Paasschen weighs in on luxury and business travel
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Much -- for the first time -- ever.
There are now more millionaires in Asia Pacific region then there are here in North America.
Our report from -- -- RBC found there were 20000 more millionaires in Asia than North America and 2011.
As the middle upper class grows in this region so -- the demand for hotels and resorts.
Starwood Hotels -- opening its largest share -- ten in the world today.
-- account China earlier I spoke -- president and CEO for spent passion from the cow for our on the -- segment I asked him about these influential customer.
-- More than 60% coming in from China.
We see over time that the meetings and convention business will be about 40% of the business coming in this hotel.
And then it wouldn't be people who are coming in younger not just for gaming but for shopping and enjoying a resort location like this the entertainment that's coming in.
This will be a -- on resort location for people to come to.
From throughout China as well as Asia Pacific.
We've also had a great contingent of interest by the way for Indians wanted to come here for weddings so.
The fact that we had this much space will be appealing.
To a broad -- the different types of travelers coming into this area.
We expect to be outbound travelers from China overall.
Will double in the next four or five years and so that Boeing could easily come in the direction in -- -- -- well.
We're certainly seeing Chinese travelers even this year spending more broad and other markets whether it's Europe for the United States so there's tremendous amount of appetite in China.
And also.
Given the rising wealth given the absolute population.
There are very few resort locations.
In most of Asia and we're seeing a tremendous growth in demand whether it's Hainan island of Bali the coasts of -- Thailand.
And certainly here as well.
What you do the United States is still -- was number what markets I'm curious how you're filling about the domestic US economy also the stock itself.
Over the last your your stock up 35 per -- appears to be so that you can keep that growth going for share.
Holders.
Yes -- first -- in terms of the US market.
Here's what's going on.
The US economy clearly in -- slow recovery relative to the depth of the recession that we all went through 2009.
On the other hand for more than a decade now unlike other forms a commercial real estate.
The hotel market has not been built out it's been built that actually below trend line over that time period.
So even though we're looking at 8% plus unemployment in the US we're looking at occupancies -- kilowatt or like -- business cycle.
And that means rates are going to go up.
And since it takes three years to build a hotel.
And there's very little construction lending happening today rates are gonna go up for some time to come which is good if you're in the hotel business.
Demand is finally coming back you're seeing more requests for first class tickets more -- -- For luxury rooms and suites for business travelers out of the United States are used sing.
That on your side of the business on your -- There's no question the -- business continues to do well.
What surprises a lot of people is over the last five years.
Even with the financial crisis we've doubled our room count in luxury segments of the brands W Saint Regis the luxury collection.
And those hotels in those three brands -- performing very well in terms of occupancy rate.
What's basically happening is global companies.
Banks.
Other institutions professional services.
Are doing very well and they're getting out in traveling and so even though the global economy certainly could be doing better.
Even though income disparities may be increasing.
That high -- traveler and that heavy -- the road warrior.
They're still getting out and that's helping our business quite a bit.
I -- -- before I let go I do wanna ask you about other earnings for the company for the second quarter you mentioned the currency fluctuations.
-- of a challenge for start what Harry feeling now.
Well.
Whenever currencies -- they they move your PNL in different ways for example one of the challenges that we've had.
And continue to have is the Canadian dollar is so strong that whereas in the past.
People from the US would go up to Canada for a bargain we now people going the other way backwards -- properties in candidate just a bit.
Weakness in the Euro generally doesn't hurt us as much because what happens is you get more people coming in the Europe.
From different markets around the world and our cost base there in Europe actually goes down so.
Currencies fluctuate the affect -- PNL a -- we had some.
But we don't see a major affect our earnings for the rest of the year based on the change in the dollar.
And that -- -- -- -- passion the CEO president starlet from earlier today.
