Starwood 2011 Annual Report Download - page 71

comprised of 59 hotels that we own or lease or in which we have a majority equity interest, 518 hotels managed
by us on behalf of third-party owners (including entities in which we have a minority equity interest) and 499
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, 2011, 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,
in 2009 we evaluated all of our existing vacation ownership projects, as well as land held for future vacation
ownership projects. At that time, we decided not to initiate any new vacation ownership projects. We also
decided not to develop certain vacation ownership sites and future phases of certain existing projects. As the
economy and market conditions improved in 2011, we commenced construction on a future phase at one
timeshare location where we had ceased development.
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, 2011:
Number of
Properties Rooms
Managed and unconsolidated joint venture hotels ....................... 518 172,900
Franchised hotels ................................................. 499 123,000
Owned hotels (a) .................................................. 59 19,400
Vacation ownership resorts and stand-alone properties ................... 13 7,000
Total properties .................................................. 1,089 322,300
(a) Includes wholly owned, majority owned and leased hotels.
Number of
Properties Rooms
North America (and Caribbean) ..................................... 565 179,600
Europe ......................................................... 161 39,000
Asia Pacific ..................................................... 210 66,900
Africa and the Middle East ......................................... 84 21,600
Latin America ................................................... 69 15,200
Total properties .................................................. 1,089 322,300
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 65 hotels for
approximately $5.6 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.
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