Starwood 2005 Annual Report Download - page 7

serving guests for more than 60 years. Starwood Vacation Ownership (and its predecessor, Vistana, Inc.) has
been selling VOIs for more than 20 years.
Our principal executive oÇces are located at 1111 Westchester Avenue, White Plains, New York 10604,
and our telephone number is [phone].
For a discussion of our revenues, proÑts, assets and geographical segments, see the notes to Ñnancial
statements of this Joint Annual Report. For additional information concerning our business, see Item 2.
Properties, of this Joint Annual Report.
Competitive Strengths
Management believes that the following factors contribute to our position as a leader in the lodging and
vacation ownership industry and provide a foundation for the Company's business strategy:
Brand Strength. We have assumed a leadership position in markets worldwide based on our superior
global distribution, coupled with strong brands and brand recognition. Our upscale and luxury brands continue
to capture market share from our competitors by aggressively cultivating new customers while maintaining
loyalty among the world's most active travelers. The strength of our brands is evidenced, in part, by the
superior ratings received from our hotel guests and from industry publications. In 2005 we had 35 of our hotels
on the Condπe Nast Traveler's 2005 Readers Choice Awards List, including three hotels on their ""Top 100
Best Hotels in the World.''
Frequent Guest Program. Our loyalty program, Starwood Preferred Guest» (""SPG''), has over
27 million members and since its inception in 1999, has been awarded the Hotel Program of the Year six times
by consumers via the prestigious Freddie Awards. SPG has also received top honors for awards for Best
Customer Service, Best Elite-Level Program, Best Award and Best Redemption. SPG, which was the Ñrst
loyalty program in the hotel industry with a policy of no blackout dates and no capacity controls, enables
members to redeem stays when they want and where they want. SPG yields repeat guest business primarily by
rewarding customers with points towards free hotel stays and other rewards, or airline miles with any of the
participating 33 airline programs.
SigniÑcant Presence in Top Markets. Our luxury and upscale hotel and resort assets are well positioned
throughout the world. These assets are primarily located in major cities and resort areas that management
believes have historically demonstrated a strong breadth, depth and growing demand for luxury and upscale
hotels and resorts, in which the supply of sites suitable for hotel development has been limited and in which
development of such sites is relatively expensive.
Premier and Distinctive Properties. We control a distinguished and diversiÑed group of hotel properties
throughout the world, including the St. Regis in New York, New York; The Phoenician in Scottsdale,
Arizona; the Hotel Gritti Palace in Venice, Italy; the St. Regis in Beijing, China; and the Westin Palace in
Madrid, Spain. These are among the leading hotels in the industry and are at the forefront of providing the
highest quality and service. Our properties are consistently recognized as the best of the best by readers of
Condπe Nast Traveler, who are among the world's most sophisticated and discerning group of travelers. The
January 2006 issue of the Condπe Nast Traveler Magazine included 45 Starwood properties among its
prestigious Gold List and Gold List Reserve, including the Sheraton Laguna in the Best by Design category.
Scale. As one of the largest hotel and leisure companies focusing on the luxury and upscale full-service
lodging market, we have the scale to support our core marketing and reservation functions. We also believe
that our scale will contribute to lower our cost of operations through purchasing economies areas such as
insurance, energy, telecommunications, technology, employee beneÑts, food and beverage, furniture, Ñxtures
and equipment and operating supplies.
DiversiÑcation of Cash Flow and Assets. Management believes that the diversity of our brands, market
segments served, revenue sources and geographic locations provides a broad base from which to enhance
revenue and proÑts and to strengthen our global brands. This diversity limits our exposure to any particular
lodging or vacation ownership asset, brand or geographic region.
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