Starwood Hotels and Resorts Worldwide is planning to complete a spinoff of its 22 timeshare resorts into a separate publicly traded company by year's end as it looks to capitalize on new opportunities for growth within the industry.
According to the Associated Press, the Stamford, Connecticut-based hotel and leisure company announced on Tuesday that the new company will look to cement long-term license agreements in order to maintain affiliations with subsidiaries Westin and Sheraton.
Starwood will also shift timeshare development assets at Westin Los Cabos, Westin Cancun, Westin Puerto Vallarta, Sheraton Kauai and Sheraton Steamboat to the new company.
"This is the right time for us to spin off our vacation ownership business and move Starwood forward in its asset light strategy," said chief executive Frits van Paasschen via the Wall Street Journal. "Not only does SVO [Starwood Vacation Ownership] continue to have a great outlook for growth, but valuations for timeshare companies are at attractive levels."
Starwood Vacation Ownership brought in revenue of roughly $640 million in 2014.
Over the first three decades of its existence, Starwood's timeshare branch has sold more than $6 billion in timeshares to as many as 220,000 customers.
"Looking ahead to 2015, we expect more strong growth in global lodging," added van Paasschen. "The U.S. economy looks set to continue its growth, and in the U.S. hotel business, limited new supply points to rising rates for some time to come."
Former president of Starwood's hotel group Matthew Avril will return to the brand to take over as CEO of the new company, which will maintain headquarters in Orlando, Florida.
Starwood's plans to spin off its timeshare unit come nearly four years after Marriott International announced it would separate its timeshare operations.
Starwood also reported its fourth-quarter results on Tuesday, recording an adjusted profit of 97 cents per share on revenue of $1.49 billion.
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