Strength in Mexico may taper a bit as we move into the summer months in out of the high season. Over

Good morning and welcome to Starwood Hotels Resorts Second Quarter 2014 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. last minute flight tickets After the speakers’ remarks there will be a question-and-answer session. (Operator Instructions). I will now turn the call over to Mr. Stephen Pettibone, Vice President of Investor Relations. Sir, you may begin.
Before we begin I’d like to remind you that our discussions during this conference call will include forward-looking statements. Actual last minute flight tickets results could differ materially from those indicated in the forward-looking statements and forward-looking statements made today are effective only as of today. We undertake no obligation to publicly update or revise these statements. The factors that could cause actual results to differ are discussed in Starwood’s annual report on Form 10-K and in our other SEC filings. You can find a reconciliation last minute flight tickets of the non-GAAP measures discussed in today’s call on our website at www.starwoodhotels.com.
Thank you Stephen and welcome everybody to our Q2 earnings call. I’ll cover three topics today in my prepared remarks. First, a review of our business performance around the world. This includes a look at our results for the quarter and our outlook for both Q3 and the rest of 2014. My second topic will be to outline our philosophy and approach last minute flight tickets to capital allocation. And then third, I’ll close with some comments about our new Chief Information last minute flight tickets Officer, Martha Poulter and how his joining us reflects our ongoing last minute flight tickets efforts to use technology to give our guests better experiences and to give our hotel owners last minute flight tickets better returns.
So turning now to my first topic, the results in the quarter. We delivered EBITDA of $324 million and EPS of $0.77 per share, both above our expectations. Worldwide last minute flight tickets REVPAR grew 5.3%. Management fees were up nearly 7% and franchise fees up almost 11%. Margins at company operated hotels were up 87 basis points. These results, last minute flight tickets along with what we are seeing across our business today show recovery that’s continuing steadily into its fifth year. In fact, this is the first time in four years that we come into the summer months without the global economy showing even the signs of a wobble. Put in other way, we are seeing extension of the business trends that were in place at the end of the first quarter.
For the next few minutes I’ll give you a quick look around the world with some color on their business. Starting first with North America, REVPAR last minute flight tickets grew over 6% and occupancies were at a record 78%. That’s up over 170 basis points from last year and you might recall that last year in the second quarter we also reported record occupancy. Rates across North America at constant exchange rates increased nearly 4%. As you may know the quarter saw the U.S dollar gain against the Canadian dollar versus last year. In fact REVPAR in Canada was up 6% in local currency but down 1.2% in U.S. dollars. Our results are very much in line with the state of the U.S economy. last minute flight tickets Fundamentals remain solid with unemployment last minute flight tickets down to 6%. However as the Fed noted recently there is still a lot of slack in the job market and while the economy is good, growth isn’t robust which brings me to my point, the lodging sector is hitting record occupancy but the U.S. economy overall is showing no signs of overheating. This is very good news for us. It means that in this cycle we could enjoy full hotels and rising rates for some time before the rest of the economy catches up with lodging in terms of capital – capacity utilization. This challenge is what we are seeing right now.
Corporate last minute flight tickets profitability is high and consumer confidence is back where it was in early 2008, both of which bode well for increased demand for high end travel. Of course in any one quarter results last minute flight tickets will vary across a market as large as North America and as it happens REVPAR growth was slower, 4.4% in our North region where we have a relatively larger concentration of business. Chicago was flat and DC was up less than 3%. REVPAR in New York was up nearly 5% in the face of new supply. But even in the North we did see a few bright spots with double digit REVPAR growth last minute flight tickets in Boston and Baltimore. Hawaii was another region under some another pressure where REVPAR at our hotels was close to flat. Inbound tourism last minute flight tickets from Japan was slow as a result of the weaker last minute flight tickets yen and a rise in taxes there. We also saw higher air fares from the Mainland U.S. although last minute flight tickets in the past few weeks those fares have begun to drop which could lead to improved performance later in the year.
The real strength in this quarter was in the south and the west where REVPAR was up close to 9% with standout performance in markets like Dallas, Houston and South Florida. In total, our U.S. REVPAR growth was just below the STR national average for luxury and upper upscale. This is almost last minute flight tickets entirely a function of what I mentioned a moment ago namely a concentration of our footprint in markets which for this quarter at least were bit slower. A more granular last minute flight tickets look at our business tells us a better story. Year-to-date REVPAR index at our hotels in North America is up which means hotel by hotel on average our properties are outgrowing their direct competitors.
Group business at our owned and managed hotels also outgrew the market in each for the three months of the quarter. Our group revenue in North America was up in the mid-single digit and our sales team did a great job with bookings in the year for the year up double digits from last year. Earlier this year we saw higher cancellations and adjustments primarily in the association segment. Still even with that group pace for 2014 is up mid-single digits. On the transient last minute flight tickets side bookings from business travelers remained strong and with high occupancies we’ve been able to mix our lower rate of business.
Looking ahead to Q3 and the rest of the year we expect trends in North America to remain positive. Supply growth last minute flight tickets in both luxury and upper upscale remains low which means we should be able to drive rate increases as demand grows. In aggregate we expect REVPAR North America be towards the upper end of our guidance range of 5% to 7%.
Moving on and a look around the world, Latin America saw trends in Q1 extend into the second quarter with the REVPAR up nearly 5%. Momentum in Central America and Mexico was a highlight. The Mexican economy continues to expand and we saw particular last minute flight tickets strength at our resorts thanks to higher occupancy spilling last minute flight tickets over from the U.S. As a result REVPAR last minute flight tickets was up 13%. In Brazil, the World Cup of course was a real tailwind for our hotels pushing REVPAR up 25% and as an aside it’s always good to have the winning team staying in one of your hotels. And from what I heard the victory party at the Sheraton Rio was one for the record books. But on a more serious note the sluggish trends from Q1 were still with us.
World cup aside in Brazil as well as Argentina and Chile demand still struggles. Excluding Brazil for example we saw REVPAR decline across South America and in total across Latin America, REVPAR last minute flight tickets ex-Brazil was up 1%. As we move into Q3, we expect more of the same. Brazil will be helped by the final weeks of the World Cup but after that will revert to Q1 levels.
Strength last minute flight tickets in Mexico may taper a bit as we move into the summer months in out of the high season. Overall for Latin America we expect REVPAR to be towards the low end of our range if not somewhat lower. last minute flight tickets In Europe, overall sentiment continues to improve. Leading indicators suggest that the modest recovery will continue. This is good news on top of occupancies in Europe that remains strong, up 130 basis points to 73%. Our European REVPAR was up about 2% and highlights for the region include Italy and Spain. REVPAR in Greece was up over 28% but at the other end growth in the UK was slow, transient trends continue to be soft as they were in Q1 and Germany faced tough comps where we left some significant trade fair business. But the biggest dark cloud looming over Europe today is the situation in Ukraine. But despite conditions there and the impact of U.S. sanctions on business in Russia the quarter in Europe ended in line with our expectations. If the situation in Ukraine and tensions in Russia do not escalate we expect that REVPAR growth in Europe will improve for the second half of the year. And behind this outlook is a robust calendar of events in UK and France and some good backlog in Germany and Greece.
Before turning to Africa and the Middle East I should also add we were hopeful that the transaction market for hotels on the continent will continue to improve. Investor interest is building interest rates have been low for a while and there is signs of lending activities last minute flight tickets increasing. REVPAR was down 1% in Africa and Middle East. Once again behind this average is a wide range of performance across markets. In the Gulf States Abu Dhabi and Qatar saw REVPAR up over 17%. By contrast REVPAR in perennially strong Dubai was down slightly, thanks to some renovations and new supply, particularly on the [pod].
In Saudi Arabia REVPAR was flat held back by visa restrictions and concerns about the coronavirus, last minute flight tickets also business in Mecca was brought down by expansion works around the holy mosque. As that construction is completed likely next year business in the kingdom should improve. REVPAR to hotels in Egypt was down nearly 20% as we lapped a recovery that began in the first half of 2013 before last minute flight tickets being cut short in Q3. As we get into Q3 and Q4 we will start seeing easier comps there.
Bad news from Nigeria in the form of kidnappings and terrorist attacks pulled down REVPAR for hotels by over 20%. The headlines in Egypt and Nigeria should not draw your attention away from the trend line that we have been observing for some time across Africa. Growth is wide spread across countries and encouragingly is being reflected by entrepreneurship and expansion of SMEs, that small and medium enterprises. Our performance in South Africa for example is up 6