Starwood cuts staff as travel slumps - Update - Asian briefs - Statistical Data Included - Brief Article

Business Asia, May, 2002

Starwood Hotels and Resorts Worldwide Inc may cut its Asian payroll as the world's largest hotel chain seeks to trim costs amid weaker demand for travel following the 11 September terrorist attacks. The White Plains, New York-based company has about 20,000 employees in Asia, a region where hotels average one employee per room, said Miguel Ko, Starwood's Asia Pacific president. Ko said he wants to lower that to about eight staff per 10 rooms, the high end of the range at the chain's US and Europe inns. "Asia has always run a bit more of an elaborate headcount," Ko said. "This is a great opportunity for us to rationalize and try to be more efficient." With hotel revenue in most Asian markets falling last year, the company expects the job cuts -- mainly in administrative and so-called support divisions -- to make its hotels more competitive. Starwood is looking for no more than nine employees per 10 rooms at hotels in Asian countries with low labour costs, and did not say how many jobs would be affected. Starwood, which owns, manages or franchises the Sheraton, W Hotel and Westin chains, plans to open 21 hotels in the Asia Pacific region by 2004, including a Westin in Singapore to replace two Westins that property owner Raffles Holdings Ltd reclaimed.

* China

China Southern Airlines Co, the nation's largest carrier, filled more of its available seats and cargo space in March than in the same month last year, as domestic demand rose. The airline filled 63.4 per cent of its total available seat and cargo capacity last month, up from 55.4 per cent in March 2001, the company said in an e-mailed statement. Paying passengers occupied 66.5 per cent of available seats in March, up from 56.5 per cent in year-earlier month, China Southern said. The airline said it carried a total of 1.8 million passengers in March, an increase of 29 per cent from a year earlier.

* Hong Kong

The Hong Kong Government paid 93 per cent of the HK$82 million ($19 million) it spent on local fixed-line phone service in the six months ended 30 September to Pacific Century CyberWorks Ltd, the city's largest phone company. Only two of 29 Government buildings used less-expensive service from three new fixed-line phone providers owned by Wharf Holdings Ltd, New World Development Ltd and Hutchison Whampoa Ltd, the city's Audit Commission said in a report. CyberWorks, formerly called Cable & Wireless HKT Ltd, provides 90 per cent of the city's business phone lines and 97 per cent of home lines. The new operators, which started service in 1995, say CyberWorks has been slow to interconnect with rivals.

* Indonesia

Indonesia's Government changed the top management of four seaport operators in an effort to improve the state-owned companies' performance. State Enterprises Minister Laksamana Sukardi named Abdulhaq Munawar as financial director of PT (Persero) Pelabuhan Indonesia II, which is known as Pelindo II and operates Jakarta's main container ports with Hong Kong's Hutchison Whampoa Ltd under a 20-year lease from 1999. The port handles more than 70 per cent of the country's international shipping volume. An audit of state-owned businesses last year found losses that were a result of inefficiency and bureaucracy, prompting the government to step up plans to sell state-owned assets. Indonesia, the last Asian economy to recover from the 1997/98 financial crisis, needs to attract foreign investment.

* Japan

Japan's jobless rate unexpectedly fell last month as manufacturers and construction companies took on workers. Unemployment may resume rising as companies from NTT Corp to Nippon Mitsubishi Oil Corp axe thousands of jobs. The world's second-largest economy added 60,000 jobs in March, pushing the unemployment rate to 5.2 per cent from February's 5.3 per cent, the Government's statistics bureau said. Economists had expected the jobless rate to rise to 5.4 per cent.

* Malaysia

Hong Leong Bank Bhd, the sixth-biggest of Malaysia's 10 lenders, said its bad loans have peaked and are expected to fall this year, helped by a recovery in the country's economy. For the year ended June 2001, non-performing loans rose to 3 billion ringgit ($1.4 billion), or 12.7 per cent of all credits, from 10.8 per cent a year earlier. That figure may fall as the Government forecasts the economy will expand as much as 3.5 per cent this year, helping company earnings. "If the economy grows at that rate, NPLs should come down," said James Lim, senior group managing director with Hong Leong Bank. They've "been on the decline in the past two to three months, as we have been restructuring and collecting quite a lot of debt".

* Singapore

Singapore's economy is expected to grow in the second half of the year as long as oil prices hold below US$30 ($55) a barrel, the Business TImes reported, citing a Reuters report quoting Prime Minister Goh Chok Tong. "Yes, (we expect growth of between one and three per cent) provided that oil prices do not shoot up above US$30 a barrel," Goh said, addressing a news conference with Spanish Prime Minister Jose Maria Aznar in Madrid. "If that doesn't happen the Singapore economy will come out of last year's recession." A sharp rise in oil prices could also disrupt recoveries in other economies, the report quoted Goh as saying. Crude oil prices have risen 32 per cent this year as worsening violence in the Middle East intensified traders' concern that supply from the region may be disrupted.