Starwood 2008 Annual Report Download - page 69

us on behalf of third-party owners (including entities in which we have a minority equity interest) and 437 hotels for
which we receive franchise fees.
Our revenues and earnings are also derived from the development, ownership and operation of vacation
ownership resorts, marketing and selling vacation ownership interests (“VOIs”) in the resorts and providing
financing to customers who purchase such interests. Generally these resorts are marketed under the brand names
described above. Additionally, our revenues and earnings are derived from the development, marketing and selling
of residential units at mixed use hotel projects owned by us as well as fees earned from the marketing and selling of
residential units at mixed use hotel projects developed by third-party owners of hotels operated under our brands. At
December 31, 2008, we had 26 owned vacation ownership resorts and residential properties, including sites held for
development, in the United States, Mexico, and the Bahamas.
Due to the global economic crisis and its impact on the long-term growth outlook for the timeshare industry,
during the fourth quarter of 2008 we evaluated all of our existing vacation ownership projects, as well as land held
for future vacation ownership projects. We have thereby decided not to pursue or continue development of several
projects, the most significant of which are two projects in Mexico and the Caribbean.
The Corporation was incorporated in 1980 under the laws of Maryland. Sheraton Hotels & Resorts and Westin
Hotels & Resorts, Starwood’s largest brands, have been 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 offices are located at 1111 Westchester Avenue, White Plains, New York 10604, and
our telephone number is [phone].
For a discussion of our revenues, profits, assets and geographical segments, see the notes to financial
statements of this Annual Report. For additional information concerning our business, see Item 2 Properties, of this
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 our 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.
Frequent Guest Program. Our loyalty program, Starwood Preferred Guest»(“SPG”), made headlines when
it launched in 1999 with a breakthrough policy of no blackout dates and no capacity controls, allowing members to
redeem free nights anytime, anywhere. Since then, the program has grown to include more than 47 million members
and continues to be cited for its hassle-free award redemption, outstanding customer service, dedicated member
website and innovative promotions and benefits for elite members. The program yields repeat guest business by
uniting a world of distinctive hotels and rewarding customers with the rewards and recognition they want — from
points that can be used for free hotel stays, indulgent experiences and airline miles with 33 participating airlines.
Significant 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 operate a distinguished and diversified 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; and the St. Regis in Beijing, China. 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
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