Starwood 2010 Annual Report Download - page 96

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REVPAR at our Same-Store Owned Hotels increased 11.2% to $136.27 for the year ended December 31, 2010
when compared to the corresponding 2009 period. The increase in REVPAR at these Same-Store Owned Hotels
resulted from a 2.6% increase in ADR to $196.62 for the year ended December 31, 2010 compared to $191.60 for
the corresponding 2009 period and an increase in occupancy rates to 69.3% in the year ended December 31, 2010
when compared to 64.0% in the same period in 2009. REVPAR at Same-Store Owned Hotels in North America
increased 11.6% for the year ended December 31, 2010 when compared to the same period of 2009. REVPAR
growth was particularly strong at our owned hotels in New York, New York, Chicago, Illinois, Toronto, Canada and
New Orleans, Louisiana. REVPAR at our international Same-Store Owned Hotels increased by 10.5% for the year
ended December 31, 2010 when compared to the same period of 2009. REVPAR for Same-Store Owned Hotels
internationally increased 11.6% excluding the unfavorable effects of foreign currency translation.
The increase in management fees, franchise fees and other income was primarily a result of a $59 million or
9.4% increase in management and franchise revenue to $689 million for the year ended December 31, 2010
compared to $630 million in the corresponding period in 2009. Management fees increased $53 million or 14.9%
and franchise fees increased $23 million or 16.7% compared to the year ended December 31, 2009. These increases
were due to growth in REVPAR at existing hotels as well as the net addition of 27 managed and 65 franchised hotels
to our system since the beginning of 2009.
Total vacation ownership and residential sales and services revenue increased 2.9% to $538 million compared
to $523 million in 2009 primarily driven by the impact of ASU 2009-17. Originated contract sales of VOI inventory
decreased 3.1% for the year ended December 31, 2010 when compared to the same period in 2009. This decline was
primarily driven by lower tour flow which was down 6.8% for the year ended December 31, 2010 when compared to
the same period in 2009. The decline in tour flow was a result of the economic climate and resulting closure of
fractional sales centers in the latter part of 2009. Additionally, the average contract amount per vacation ownership
unit sold decreased 6.0% to approximately $15,000, driven by price reductions and inventory mix. Residential
revenue increased approximately $6 million in the year ended December 31, 2010 primarily due to the recognition
of $4 million of marketing and license fees associated with a new hotel and residential project in Guangzhou, China
which opened in 2010.
Other revenues from managed and franchised properties increased primarily due to an increase in payroll costs
commensurate with increased occupancy at our existing managed hotels and payroll costs for the new hotels
entering the system. These revenues represent reimbursements of costs incurred on behalf of managed hotel and
vacation ownership properties and franchisees and relate primarily to payroll costs at managed properties where we
are the employer. Since the reimbursements are made based upon the costs incurred with no added margin, these
revenues and corresponding expenses have no effect on our operating income and our net income.
Year Ended
December 31,
2010
Year Ended
December 31,
2009
Increase/
(Decrease)
from Prior
Year
Percentage
Change
from Prior
Year
Selling, General, Administrative and Other ..... $344 $314 $30 9.6%
The increase in selling, general, administrative and other expenses for the year ended December 31, 2010 was
primarily a result of higher incentive based compensation in the current year when compared to the prior year. This
increase was partially offset by the reimbursement of previously expensed legal costs in connection with the
favorable settlement of a lawsuit and an $8 million reversal of a guarantee liability which was favorably settled
during the period (see Note 26).
Year Ended
December 31,
2010
Year Ended
December 31,
2009
Increase/
(Decrease)
from Prior
Year
Percentage
Change
from Prior
Year
Restructuring, Goodwill Impairment and Other
Special Charges (Credits), Net ............ $(75) $379 $454 n/m
During the year ended December 31, 2010, we received cash proceeds of $75 million in connection with the
favorable settlement of a lawsuit. We recorded this settlement, net of the reimbursement of legal costs incurred in
connection with the litigation, as a credit to restructuring, goodwill impairment, and other special (credits) charges.
28