Frits Van Paasschen said the current increase in oil prices reflects a U.S. and global economy that is gaining speed, a factor that bodes well overall for hotels.

Starwood (HOT.N) caters to higher-end customers with brands that include Sheraton, W and Westin.

Oil prices rose on Friday, with Brent crude moving above $125 a barrel, as Iran oil supply worries and a weakening of the dollar on lesser chances of U.S. monetary policy tightening improved investor risk appetite for commodities.

Van Paasschen said he wasn't overly concerned about oil price levels at the current time.

"As we look at occupancy, not just in North America but around the world, it's quite strong today," van Paasschen said in a phone interview on Friday.

"If oil prices were to go to unheard of levels, that might be a concern. If they rise even from where they are today, I'm not concerned," he added.

Van Paasschen also said Starwood was not seeing signs of a slowdown in its China business. Starwood expects to open its 100th hotel in China this year and has an added 100 under construction in the country.

China cut its growth target to an eight-year low recently and said boosting consumer demand was a key priority for 2012 .

"The Chinese economy by all accounts from what we see continues on robustly" in terms of development, demand and momentum in revenue per available room, an important hotel metric, van Paasschen said.

He said an economy the size of China was likely to experience "fits and starts" as it grows.

"Do I think it's a greater risk to be on the sidelines and miss this growth than live through those fits and starts? Absolutely," van Paasschen added.

(Reporting by Karen Jacobs; Editing by Bernard Orr)

• A Permanent Economic Emergency