Starwood 2009 Annual Report Download - page 78

us on behalf of third-party owners (including entities in which we have a minority equity interest) and 476 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, 2009, we had 22 owned vacation ownership resorts and residential properties (including 13 stand-
alone, eight mixed-use and one unconsolidated joint venture) 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 2009 we evaluated all of our existing vacation ownership projects, as well as land held
for future vacation ownership projects. We have thereby decided that no new vacation ownership projects are being
initiated and we have decided not to develop certain vacation ownership sites and future phases of certain existing
projects.
Our operations are in geographically diverse locations around the world. The following tables reflect our hotel
and vacation ownership and residential properties by type of revenue source and geographical presence by major
geographic area as of December 31, 2009:
Number of
Properties Rooms
Managed and unconsolidated joint venture hotels ...................... 440 153,800
Franchised hotels ............................................. 476 116,300
Owned hotels
(a)
............................................... 63 21,500
Vacation ownership resorts and stand-alone properties .................. 13 6,900
Total properties ............................................... 992 298,500
(a) Includes wholly owned, majority owned and leased hotels.
Number of
Properties Rooms
North America (and Caribbean) ................................... 533 175,000
Europe, Africa and the Middle East ................................ 244 60,000
Asia Pacific ................................................. 155 51,200
Latin America................................................ 60 12,300
Total....................................................... 992 298,500
We have implemented a strategy of reducing our investment in owned real estate and increasing our focus on
the management and franchise business. In furtherance of this strategy, since 2006, we have sold 60 hotels for
approximately $5.2 billion. As a result, our primary business objective is to maximize earnings and cash flow by
increasing the number of our hotel management contracts and franchise agreements; developing vacation own-
ership resorts and selling VOIs; and investing in real estate assets where there is a strategic rationale for doing so,
which may include selectively acquiring interests in additional assets and disposing of non-core hotels (including
hotels where the return on invested capital is not adequate) and “trophy” assets that may be sold at significant
premiums. We plan to meet these objectives by leveraging our global assets, broad customer base and other
resources and by taking advantage of our scale to reduce costs. The implementation of our strategy and financial
planning are impacted by the uncertainty relating to geopolitical and economic environments around the world and
their consequent impact on travel in their respective regions and the rest of the world.
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