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Hotel operator Starwood’s CEO to step down by ‘mutual’ agreement

February 17, 2015, 12:50 PM UTC
The American Express Publishing Luxury Summit 2013 - Day 4
DANA POINT, CA - APRIL 23: Frits Van Paasschen, President and Chief Executive Officer, Starwood Hotels & Resorts, speaks onstage during The American Express Publishing Luxury Summit 2013 at St. Regis Monarch Beach Resort on April 23, 2013 in Dana Point, California. (Photo by Michael Buckner/Getty Images for American Express Publishing)
Photograph by Michael Buckner — Getty Images

Hotel operator Starwood said Tuesday Chief Executive Frits van Paasschen has resigned following a “mutual agreement” with the board of directors, a change at the top of the company’s leadership that comes one week after a spin off plan was announced.

The operator of Westin and W Hotels said that van Paasschen would be succeeded on an interim basis by Starwood Director Adam Aron, who has served on the board since 2006. The company said it is considering both internal and external candidates. Van Paasschen will continue with Starwood (HOT) as a consultant to assist in the transition.

The change comes exactly one week after Starwood announced it intends to spin off the company’s vacation ownership business, known as Starwood Vacation Ownership, into a separate publicly traded company. That business reported revenue of about $640 million last year and has sold more than $6 billion of vacation ownership intervals over its more than 30-year history. The company’s shares rose when that news was announced.

The timeshare business, while a smaller unit for Starwood, has struggled of late. Revenue for the timeshare business and some accompanying services slumped 27% last year, leading Starwood to post a modest decline in overall revenue as growth in other pockets of its business failed to offset the timeshare weakness.

“Frits has made many important contributions over the past seven years to Starwood’s successful evolution into a global company,” said Starwood Chairman Bruce W. Duncan. He added it was now time for the hotel operator to “take steps to accelerate Starwood’s growth, improve performance, and sharpen our focus on operational excellence.”
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