Starwood 2012 Annual Report Download - page 5

of W Hotels, the Westin Heavenly Bed
and Starwood Preferred Guest (SPG) with
no blackouts. In the past few years, we
rolled out the Link@Sheraton, a first-of-
its-kind cybercafe. And we launched Aloft
and Element, both of which promise to be
as disruptive to their segments as W has
been to luxury.
In 2012, we turned our innovation lens
back to loyalty. SPG was already the
industry’s leading program. And we made
it even more valuable for SPG members
and our hotels by introducing new
benefits. Your24 allows our most loyal
guests to keep their room for a full 24
hours regardless of when they checked
in, and lifetime membership recognizes
guests who have stayed with us over
time. For our members who stay over 100
nights a year, we give them access to a
personal Starwood Ambassador to take
care of everything Starwood and more.
We like to say we have created “Loyalty
Beyond Reason,” winning a greater share
of business from the growing ranks of
global “mega-travelers.”
Innovation only matters if it drives results.
Our transformation of SPG in 2012 drove
a 12% year-over-year increase in revenue
to our hotels from SPG members. And
revenue from Platinum SPG members
was up 16%.
Our innovation lens is also focused on
the mobile revolution. Mobile bookings
are now growing even faster than web
bookings did a decade ago. In fast-
growing economies, mobile often is
already leapfrogging traditional channels.
So in 2012, we launched our latest SPG
App for both iPhone and Android. It has
all the features you might expect – like
viewing hotel details, making bookings
and managing your SPG account. But
there’s more. It connects guests to
Starwood through text, email, voice and
video chat. While guests are staying at
our properties, the App’s “State Aware”
technology changes the interface and
provides helpful information about the
property and local area. For example, it
shows the hotel address in Chinese to
help you take a taxi to the stunning new
Sheraton Huzhou. We’re already seeing
great results. During 2012, the App was
installed over 600,000 times, and mobile
bookings more than doubled over 2011.
And on our Chinese App after just a few
months, mobile accounted for half of our
web bookings.
LOOKING AHEAD
Starwood is already the leading global
high-end hotel company, and in 2012,
we generated 35% of our fees outside of
mature markets. With 80% of our future
hotel openings planned in these high-
growth markets, we are growing where
demand is growing. Our focus on the
high end is also paying off, as interest
in high-end and luxury travel has more
than bounced back – it has reached new
heights. The Sheraton and Le Méridien
brands, for example, have never been
stronger in terms of their performance,
guest satisfaction and future growth. And
their long-standing presence around the
world provides the foundation for two of
the fastest-growing brands in hospitality
history – W and Aloft. The simple truth
is that having great hotels begets even
more growth as more guests, customers
and developers become connected to
our brands.
We enter 2013 with the strongest balance
sheet in the history of our company,
perhaps the fastest-growing luxury hotel
portfolio in the industry and the largest
high-end global footprint of hotels. As
a result, we expect to generate strong
free cash flow and to continue delivering
market-leading returns to stockholders.
Specifically, we expect to grow with our
high-quality global pipeline in rapidly
growing markets and with higher rates
in mature markets with tight supply, like
North America and Europe. All the while,
we will generate cash from selling hotels
and from vacation ownership.
Thank you for your confidence in Starwood.
As we leave Dubai and the Middle East,
we hope to see even faster growth in the
region, just as we did after our temporary
relocation to China a couple of years ago.
I wish you many wonderful stays at
Starwood properties in 2013, and as we
say on Facebook, Twitter and Weibo, we
hope you enjoy the #SPGLife.
Frits van Paasschen
Chief Executive Officer