(Adds comments from executives, analyst; updates shares)
By Sagarika Jaisinghani
Feb 17 (Reuters) - Starwood Hotels & Resorts Worldwide Inc said Chief Executive Frits van Paasschen had stepped down, a week after the hotel operator announced the spinoff of its timeshare business.
Starwood, the owner of the St. Regis and Sheraton hotel brands, named Director Adam Aron, 60, as interim CEO and said it was looking internally and externally for a permanent CEO.
“Let me be clear that this change has nothing to do with any disagreement over strategy. We’re looking for someone who can galvanize the troops and move us forward to achieve our goals,” Chairman Bruce Duncan said.
Duncan said the new CEO would likely have experience in the hospitality industry.
Paasschen, 53, who became Starwood’s CEO in September 2007, pushed for growth in international markets despite tepid lodging demand in emerging markets.
“Our net rooms growth needs to be bigger and we’ll try to pull every arrow in our quiver that we can to make that happen,” Aron said.
Paasschen’s departure comes less than a year after Vasant Prabhu resigned as chief financial officer.
Starwood has underperformed rivals Marriott International Inc, Hyatt Hotels Corp and Hilton Worldwide Holdings Inc, which are less exposed to international markets.
The company forecast a lower-than-expected full-year profit last week, partly due to a stronger dollar.
“Investors were also frustrated by slower asset sales and the lack of clarity on capital allocation, which included several missteps from senior leadership in communicating a coherent strategy,” FBR Capital Markets & Co analyst Nikhil Bhalla wrote in a note.
Starwood has adopted an “asset-light” strategy, under which it has sold properties worth about $1.5 billion over the past two years. The spinoff of Starwood’s timeshare business is the latest in that plan.
Paasschen will continue as a consultant to assist in the transition, Starwood said.
Starwood’s shares were up 2.9 percent at $80.87 in morning trading on the New York Stock Exchange.
Up to Friday’s close, Starwood’s shares had risen about 3 percent in the past 52 weeks, compared with a 54 percent rise in Marriott’s shares and a 30 percent increase in Hilton’s shares. (Additional reporting by Radhika Rukmangadhan in Bengaluru; Editing by Maju Samuel and Don Sebastian)