For many years now, many big companies have been carrying on a clear reconstruction program, that leads them to forego all physical assets and focus on branding and the services that can be quickly delocalized. Anyone who has read Naomi Klein’s No Logo knows how Nike conceives its operations: selling sneakers by taking care of design and branding only. It doesn’t have a single factory and the whole production is made in southeast Asia. This tendency is coming strong on the tourism market. Starwood Company, known for being the owner of the Sheraton hotels chain, has begun to let go their real state properties -its physical assets- to focus on the management of their establishments. That is, the brand. The volumen of the operations is impressive: the selling of 38 hotels in the U.S. to the Marriott chain (20 of them of the Sheraton brand) will leave the group more than US$ 4 millions in cash.

As the company possesses over 750 hotel establishments, we’ll have to see how far will they go with the uninvestment on real estate properties process. What’s for sure is that this process will provide them an important figure to sustain its reconvertion into a management focused firm. Mostly because the numbers in the last trimester haven’t been so good, with a fall of 64% in profits, compared to the same period in 2004. Starwood claimed it’s a one time only “extraordinary charge for the remittance of utilities”; without this charge, profits would been higher than expected. And, apparently, the market is on the firm’s side, since their stock hasn’t dropped, while the sector’s average has fallen in an 8% this year. By the way, the U.S. hotel market is showing quite positive figures. There’s been a rise in prices and incomes of hotel chains, thanks to a higher demand, but at the same time, there’s been difficulties because of the successive hurricanes around Florida. Thanks to the increase of prices and demand, Starwood has informed of an incomes rise of 11.9%, achieving US$ 1500 millions.

Update: a Wall Street Journal Americas note tells the inside problems of Starwood and how the selling of hotels to the Marriott chain has worsened the situation.