Starwood 2010 Annual Report Download - page 71

Download and view the complete annual report

Please find page 71 of the 2010 Starwood annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 170

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170

us on behalf of third-party owners (including entities in which we have a minority equity interest) and 502 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 revenue 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, 2010, we had 23 owned vacation
ownership resorts and residential properties (including 14 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, in
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, 2010:
Number of
Properties Rooms
Managed and unconsolidated joint venture hotels ...................... 463 159,200
Franchised hotels ............................................. 502 121,400
Owned hotels
(a)
............................................... 62 21,100
Vacation ownership resorts and stand-alone properties .................. 14 7,000
Total properties ............................................... 1,041 308,700
(a) Includes wholly owned, majority owned and leased hotels.
Number of
Properties Rooms
North America (and Caribbean) ................................... 551 175,800
Europe, Africa and the Middle East ................................ 247 61,300
Asia Pacific ................................................. 181 58,500
Latin America................................................ 62 13,100
Total properties ............................................... 1,041 308,700
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 62 hotels for
approximately $5.3 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; 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 is impacted by the uncertainty relating to
geopolitical and economic environments around the world and its consequent impact on travel.
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.
3