Starwood 2005 Annual Report Download - page 32

in the corresponding period of 2004 and an increase of $87 million in other revenues from managed and
franchised properties to $1.070 billion for the year ended December 31, 2005 when compared to $983 million
in the corresponding period of 2004.
The increase in revenues from owned, leased and consolidated joint venture hotels is due primarily to
strong results at our owned hotels in New York, New York, the Hawaiian Islands, Los Angeles, California,
San Diego California, Atlanta, Georgia, Seattle, Washington and Houston, Texas, partially oÅset by the loss
of business due to Hurricanes Dennis, Katrina, Rita and Wilma at our two owned hotels and one joint venture
hotel in New Orleans, two owned hotels in Florida and two owned hotels in Cancun, Mexico. Revenues at our
Same-Store Owned Hotels (119 hotels for the years ended December 31, 2005 and 2004, excluding 12 hotels
sold or closed and 11 hotels undergoing signiÑcant repositionings or without comparable results in 2005 and
2004) increased 8.2%, or $240 million, to $3.183 billion for the year ended December 31, 2005 when
compared to $2.943 billion in the same period of 2004 due primarily to an increase in REVPAR. REVPAR at
our Same-Store Owned Hotels increased 10.9% to $123.14 for the year ended December 31, 2005 when
compared to the corresponding 2004 period. The increase in REVPAR at these Same-Store Owned Hotels
was attributed to increases in occupancy rates to 70.5% in the year ended December 31, 2005 when compared
to 68.3% in the same period in 2004, and a 7.5% increase in ADR to $174.70 for the year ended December 31,
2005 compared to $162.50 for the corresponding 2004 period. REVPAR at Same-Store Owned Hotels in
North America increased 11.7% for the year ended December 31, 2005 when compared to the same period of
2004 due to increased transient and group travel business for the period, primarily at our large owned hotels in
the major United States cities and destinations discussed above. REVPAR at our international Same-Store
Owned Hotels increased by 8.8% for the year ended December 31, 2005 when compared to the same period of
2004, with Europe, where we have our biggest concentration of international owned hotels, increasing 7.8%.
REVPAR for Same-Store Owned Hotels internationally increased 6.8% for the year ended December 31,
2005 excluding the favorable eÅects of foreign currency translation. REVPAR for Same-Store Owned Hotels
in Europe increased 6.5% excluding the favorable eÅects of foreign currency translation.
The increase in vacation ownership and residential sales and services is primarily due to sales of
residential units at the St. Regis Museum Tower in San Francisco, California, which did not begin until the
fourth quarter of 2004. In the year ended December 31, 2005, we recognized approximately $183 million of
revenues from the San Francisco project compared to sales of $15 million in 2004. The St. Regis Museum
Tower opened in November 2005 with 260 hotel rooms and 102 condominium units. The increase in vacation
ownership and residential sales and services in 2005 is also due to an increase in the sales of VOIs of 11.3% to
$591 million in 2005 compared to $531 million in 2004. These increases represent increased sales volume as
well as the revenue recognition from progressing and completed projects accounted for under the percentage of
completion accounting methodology as required by generally accepted accounting principles primarily at the
Westin Ka'anapali Ocean Resort Villas in Maui, Hawaii, the Westin Kierland Resort and Spa in Scottsdale,
Arizona, and the Sheraton Vistana Villages in Orlando, Florida, partially oÅset by reduced revenues at the
Westin Mission Hills Resort in Rancho Mirage, California where substantially all of the available inventory
has now been sold. Contract sales of VOI inventory, which represents vacation ownership revenues before
adjustments for percentage of completion accounting and rescission and excluding fractional sales at the St.
Regis Aspen, increased 14.7% in the year ended December 31, 2005 when compared to the same period in
2004.
The increase in management fees, franchise fees and other income of $82 million was primarily a result of
increased management and franchise fees of $59 million to $362 million for the year ended December 31,
2005 due to improved operating results at the underlying hotels, the addition of new managed and franchised
hotels, including approximately $5 million of fees earned on the Le Mπeridien hotels for the six week period
that we managed and franchised these hotels in 2005, and certain termination fees oÅset by lost fees from
contracts that were terminated during 2005. The increase in other income is also due to increased revenues
from our Bliss and Remede spas and from the sales of Bliss and Remede products.
Other revenues and expenses from managed and franchised properties increased to $1.070 billion from
$983 million for the year ended December 31, 2005 and 2004, respectively. These revenues represent
reimbursements of costs incurred on behalf of managed hotel properties and franchisees and relate primarily to
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