starwood hotels & resorts worldwide inc. fy 2010
DESCRIPTION
Starwood Hotels & Resorts Worldwide Inc. FY 2010. Starwood vs. its Main Competitors. Pipeline. Network. Vs end 2009. In ‘000 rooms. Pipeline. In ‘000 rooms. EMEA. APAC. Americas. -3%. 205. 647. 13%. 19%. 68%. 208 Kr. (2) . 138. +6%. 613. 8%. 9%. 83%. 605. 105. +5%. - PowerPoint PPT PresentationTRANSCRIPT
Company profile : StarwoodHotels & ResortsWorldwide Inc.
FY 2010
2
Starwood vs. its Main CompetitorsR
oom
s ne
twor
k as
of e
nd o
f yea
r, 20
10
Source : Companies annual reports except for Hilton network, Accor internal data
88%
86%
85%
83%
68%
61%
56% 28%
Worldwide excluding the US
208 Kr
366Kr
In ‘000 rooms
EMEA Americas
Starwood 7th global player in the hospitality business
1st
647
613
605
~600
507
495
302
Network
13%19%
8% 9%
8%7%
10% 4%
16%
7%5%
20%19%
Roo
ms
pipe
line
as o
f end
of y
ear,
2010
In ‘000 roomsPipeline
Starwood has the 6th pipeline worldwide,stable compared to 2009
205
103
105
138
101
51
85
NB: Figures include traditional lodging and extended stay units but exclude timeshare products
APACVs
end 2009
-3%
-5%
+5%
+6%
0%
-24%
0%
(2)
(2) Hilton pipeline based on an internal press release, January 2011(1) Hilton geographical breakdown based on 2009 figures
(1)
Pipeline
3
1. Company overview Slide 4
2. Company organization Slide 5
3. Brand positioning Slide 6
4. Geographical breakdown Slide 7
5. Room portfolio Slide 8
6. Operating mode Slide 9
7. Group strategy Slide 11
8. Pipeline and lodging development Slide 13
9. Key figures Slide 14
10. SWOT analysis Slide 17
11. Company history Slide 18
12. Brands description Slide 19
13. Accor + Starwood Slide 19
4
– 7th global player in the hospitality business with 308,736 r.– 1,041 hotels, including 14 vacation ownerships– 9 main brands, mostly upper-upscale and luxury segments– 145,000 employees– American company
– Funded in 1969, Starwood is present in 3 main segments– Traditional lodging industry (from midscale to luxury)– Extended stay segment– Timeshare segment
– Worldwide location– But concentration in North America (53% of room network)– Few hotels in South America (6%)
Description
Financials
Ownership
1. Company overview
Owners Stake
Float 100,0%
Waddell & Reed Financial Inc 10,1%T. Rowe Price Associates 7,1%
Fidelity Management & Research 5,1%
Source: Reuters, as of March 7, 2011
2009 2010E 2011E 2012EFinancials (M$)
Revenue 4 696 5 071 5 229 5 768% Change in Revenue 8,0% 3,1% 10,3%
EBITDA 793 879 997 1 160EBITDA margin 16,9% 17,3% 19,1% 20,1%
Net Profit (pre excep) 188 237 321 444Net margin 4,0% 4,7% 6,1% 7,7%
Market Data (M$)Market Cap 11 370
NetworkHotels 992 1,041Rooms 298 522 308 700
Main figures
7%
52%
39%
2%
Operating type
Franchise TimeshareO&L Management
20%
20%60%
Geographical breakdown
APAC
EMEA
Americas
# rooms
Mid-Lux 1,027 301,736
# hotels
66.6% 160.0$ 106.6$ADROR Revpar
segment
5
Full & limited service segment
Timesharesegment
Extended stay segment
2. Company organization
3. Brand positioning & strategy (1/2)
6
LeisureBusiness “New Generation” niche
Authentic LuxuryBespoke services Unique / Local
Group of hotels
TrendsetterDesign / Innovation
Extended stayEco-friendly
Casual / UrbanSuites
Upscale
High-end luxury
Midscale
Upper upscale
Pric
e se
gmen
tatio
n
Lifestyle segmentation
19 h.
38 h.
76 h.
6 h.45 h.
100 h.
Bus. & LeisureChic and culturedFrench heritage
Focus European market
176 h.
Bus. & LeisureComfort / Wellness
Global standardsFocus US market
403 h.Bus. & Leisure
Accessibility / Conviviality
158 h.
Network figures as of end 2010
BusinessComfort / Functional
Starwood – Company profileDecember 2010
Sources: Starwood website and reports, Network figures as of end 2010
Each brand (except on the luxury pole) is under a flagship umbrella in terms of communication and logo:
– Luxury pole 1 brand / 1 label• St Régis : Starwood luxury brand mainly in urban
environment• The Luxury Collection : more a label than a
brand (hotels are not branded and keep their original name), more in leisure environment
– Westin pole 1 flagship brand / 4 associated brands• Westin : Starwood upper-upscale flagship brand
(mainly US and Asia markets)• W : a trendy declinaison with Westin design • Le Méridien : Westin declinaison on European
markets with a trendy / smart touch • A loft : A W midscale declinaison with a more
limited service• Element : the Westin extended stay declinaison– Sheraton pole 1 strong brand and a recently
brand associated• Sheraton : the upscale Starwood flagship
business and leisure oriented• Four Points : an upper midscale brand focused on
the business and MICE segment
Thanks to a clear segmentation, Starwood brands have a clear positioning avoiding cannibalization and addressing different demands
7
3. Brand positioning & strategy (2/2)Starwood has restructured its portfolio in 3 segments and has launched or revitalized some brands :Specialty select services : 3 brands in midscale
– with the launch of two brands Aloft and Elements – with the rejuvenation of Four Points by Sheraton
Full Services : 6 brands from upscale to luxury– With the $6bn revitalization program of Sheraton,
Starwood’s largest and most global brand
Starwood targets a consistent brand portfolio:All hotels must comply with its brand standards:
– “Cleaning-up” of Le Méridien and Sheraton resulting in a disposal of 20% of the hotels in the system
– 60% of hotels are brand new or freshly renovated A portfolio focused on upscale and luxury segment
but a clear segmentation to avoid any cannibalization− Introduction of a “lifestyle dimension” in addition to the
price based on 3 segments: Business, Leisure and New Generation each brand positioning corresponds to a crossing Lifestyle / price
– If networks are still heterogeneous, the Group’s communication is in line with this approach
8
4. Geographical Breakdown
45%
36%
3%14%2%
60%
18%8%14%
43% 38%
12%7%
North America538 h 169,191 r
56%
19%
Asia & Pacific181 h58,444 r
20%
Europe, Africa &Middle-East247 h61,348 r
4%
South America61 h12,753 r
Starwood – Company profileSeptember 2008
X%Share ofglobalnetwork
Luxury
Upper upscale
Upscale
Midscale
Hotel and room network1,027 h. / 301,736 r.*
(As of December 31, 2010)
*Figures do not include vacation ownership
47%34%
9%10%
Unbranded
H R H R H R H R
Upscale & Luxury 806 263 490 327 222 57 233 375 142 564 49 10 972 160 52 721 7% 58% 36%St Regis Luxury Sof itel Coll. 22 4 305 196 3 389 11 2 276 2 309 6 1 331 19% 78% 3%The Luxury Collection Luxury Sof itel Coll. 75 15 043 201 42 7 140 11 3 547 9 648 13 3 708 11% 51% 39%W Hotels Luxury So 38 11 206 295 3 1 050 29 8 926 2 433 4 797 26% 74% 0%Westin Up. Upscale Sof itel 176 68 488 389 21 6 552 115 49 213 6 1 563 34 11 160 7% 58% 35%Le Méridien Up. Upscale Sof itel 100 26 678 267 59 16 012 11 2 604 2 324 28 7 738 0% 84% 16%Sheraton Upscale Pullman 395 137 770 349 94 26 090 198 75 998 28 7 695 75 27 987 6% 51% 43%Midscale 212 36 818 174 25 4 115 154 25 199 12 1 781 21 5 723 9% 21% 71%Aloft (L) Midscale Novotel 46 6 827 136 2 555 41 5 785 3 487 4% 11% 85%
Four Points (L) Midscale Novotel 158 27 391 173 22 3 560 106 16 814 12 1 781 18 5 236 1% 25% 74%
Others 8 2 600 325 1 7 2 600 100%
Total Lodging 1 018 300 308 295 247 61 348 529 167 763 61 12 753 181 58 444 7% 53% 40%
Extended Stay 9 1 428 0 0 9 1 428 0 0 0 9% 0% 91%Element (L) Upscale 9 1 428 159 9 1 428 9% 0% 91%
Total Hotels 1 027 301 736 294 247 61 348 538 169 191 61 12 753 181 58 444 7% 53% 40%
Timeshare 14 7 000 500 13 6 618 1 382
Total 1 041 308 736 297 247 61 348 551 175 809 62 13 135 181 58 444Sources : 2010 10-K
timeshare = 2% of total network
Geographical repartition (italic=estimate) Operation mode (% rooms)Europe Af. M. East North Am. Sth Am. Asia Pac. Ow ned
& LeasedMnged Fchised
RoomsHotel av
SizeBreakdow n by brand Category
ACCORBrand Hotels
9
5. Room portfolio
2009 2010 Change
Occupancy rate 61,5% 66,6% 5,1Average Daily rate 158,5 160,0 0,9%RevPar 97,5 106,6 9,3%
7%
52%
39%
2%
10
Global network per operating mode(In room number)
Network 2000738 h / 227,000 rooms
Network 20101,041 h / 308,736
rooms
Franchise TimeshareOwned & Leased Management
22%
35%
42%
1%
Sources: Starwood’s2003 & 2010 annual reports
+81,736 rooms+36% over 10 years
6. Operating modeEvolution 2003- 2010
11 Source: Starwood’s FY results 2010
Brand* Hotels Rooms Ownership by brand
22 4,305
75 15,043
38 11,206
176 68,488
100 26,678
395 137,770
158 27,391
46 6,827
9 1,428
19% 78% 3%OwnedManagedFranchised
11% 51% 39%OwnedManagedFranchised
26% 74%OwnedManagedFranchised
58%7% 35%OwnedManagedFranchised
84% 16%OwnedManagedFranchised
51%6% 43%OwnedManagedFranchised
1%25% 74%
OwnedManagedFranchised
4%11%
85%OwnedManagedFranchised
9% 91%OwnedManagedFranchised
6. Operating modePer brand, 2010 FY
* Excluding unbranded hotels : 8 h. / 2,600 r. (100% owned)
12
Network 2010
1,041 properties308,736 rooms
– +341 hotels and 78,736 rooms– Increase in profitability– Increase in share of mgmt. and fra. contracts– Development of vacation ownership– Product innovation– Sheraton revitalization (2007, $6bn plan)– Launch of Aloft and Element (2008)
Source: Starwood’s Q4 2010 earnings Call transcript
Network 2000
738 hotels227,000 rooms
Recent Group Strategy
2011 Group Strategy
Expansion out of domestic market
Focus on Asia and especially China (pipeline : 27k rooms, i.e 40% of total)
Starwood is the most int’l of US players (40% out of the US)
Brand portfolio differentiation Unique and strong brand positioning through a lifestyle segmentation;
innovation / renovation to keep brands fresh
Product innovation Development of related products/services that enhance brand
experience and differentiation and deliver attractive economics
7. Group strategy
Increase the number of hotel management contracts and franchise agreement
Earnings and cash-flow maximization
13
– The company is still in the process of moving to an asset-light business model by selling owned hotels and non core assets as opportunities arise :
• Since 2000, the Company has sold 110 owned hotels for approximately $7.5 billion (including 33 properties it sold to Host Hotels in 2006, for approximately $4.1 billion)
• Since 2000,the company has added 338 Managed and franchised hotels (79 k r.) • Non Core business : Selling of multi-channel spa and retail product company Spa Bliss in
2009 (≈$100M)
– Keep hotel with high value/growth/returns
– Shift to higher margin fee business : management and franchise growth strategy
7. Group strategyAsset Light Strategy
Starwood has been focused on reducing its investment in owned real estate while simultaneously working to increase the revenue generated from its management & franchise business
Asset Light Strategy1
14
7. Group strategyDevelopment Strategy
Americas• Hotels openings will represent both
new built & conversion properties• Openings of 30 h. in 2010
Asia- PacificNorth Am. :
2 Development
– Starwood CEO expects to open 70-80 hotels in 2011, signing new projects and conversions
– Upper Upscale & Luxury brands should represent 60% of these new openings (Sheraton = 30% of Starwood’s pipeline)
– 84% will be outside USA, with a strong ambition in China & India
EMEA• Opening of 50 hotels in EMEA over
the next three to five years, including 12 hotels in 2011.
EMEA :
India :
China :
Latin Am. : • Openings of 6 hotels in 2011• Westin to debut in Peru, Mexico
and Panama in 2011
• 70 hotels in operation, 85 in the pipeline. In 2011, one in every three new Starwood hotels will open in China
• Starwood expects to operate 50 hotels in India by the end of 2012 and have 100 hotels under operation, development or management contracts signed by 2015
• Sheraton represents the largest portion of the Chinese pipeline with approximately 31 hotels.
• Seven hotels to open in 2011
15
7. Group strategyBrand strategy
3 Brand Strategy
Starwood has restructured its portfolio in 2 segments and has launched or revitalized some brands :Specialty select services : 3 brands in midscale
– with the launch of two brands Aloft and Elements – with the rejuvenation of Four Points by Sheraton
• In the past five years, Starwood and its partners have invested more than $1 billion to reinvent Four Points by Sheraton resulting in a 70 percent turnover of the portfolio driven by major property renovations, conversions and new-build hotels
Full Services : 6 brands from upscale to luxury– With the $6bn revitalization program of Sheraton, Starwood’s largest and most global brand
Starwood targets a consistent brand portfolio:Each brand designed to cater a specific sub marketsAll hotels must comply with its brand standards:
– “Cleaning-up” of Le Méridien and Sheraton resulting in a disposal of 20% of the hotels in the system– 60% of hotels are brand new or freshly renovated
16
8. Pipeline and lodging development
Development in previous years- 2006 : Opening of more than 50 hotels (14,000 rooms) and addition of 124 new properties in portfolio through the acquisition of Le Méridien while removing 58 properties- 2007 : Opening of 67 hotels and addition of 47,000 rooms to the pipeline- 2008 : Opening of 87 hotels and addition of 147 properties to the pipeline- 2009 : Opening of 83 hotels and addition of 77 properties to the pipeline- 2010 : Opening of 70 hotels (managed and franchised) and no addition to the pipeline
Development plan, as of December 2010:- 85,000 rooms in the active pipeline
- 61% of which is dedicated to the upper upscale and luxury categories
- Strong international development with 84% outside of the USA. Priority given to Asia (60% of the pipeline, mainly China – 45% of Starwood’s pipeline – and India)
Sources: Starwood’s 2010 annual report, Lodging Econometrics Q3 2010
South AmericaAPAC
EAMEUnited States
Pipeline breakdown in % of room total :
55%
5%
21%
19%
17 Starwood – Company profileDecember 2010
9. Key figuresP&L evolution & forecasts
In M$
Financials (in M$) 2000A 2001A 2002A 2003A 2004A 2005A 2006A 2007A 2008A 2009A 2010A 2011E 2012E CAGR 2003-2010Revenue 5 040 4 633 4 588 4 630 5 368 5 977 5 979 6 153 5 907 4 756 5 071 5 229 5 768 1,3%
% Change in Revenue 1,0% 0,0% 0,9% 15,9% 11,3% 0,0% 2,9% -4,0% -19,5% 6,6% 3,1% 10,3%EBITDA 1 509 1 094 1 039 856 1 084 1 229 1 145 1 164 942 793 879 997 1 160 0,4%
EBITDA margin 29,9% 23,6% 22,6% 18,5% 20,2% 20,6% 19,2% 18,9% 15,9% 16,7% 17,3% 19,1% 20,1%Net Profit 398 147 251 105 369 423 1 115 543 254 73 237 321 444 12,3%
Net margin 7,9% 3,2% 5,5% 2,3% 6,9% 7,1% 18,6% 8,8% 4,3% 1,5% 4,7% 6,1% 7,7%Sources: company reports and Reuters consensus estimates as of March, 4 2011
18
– Strong portfolio of internationally well-known hotel brands with a good image
– Innovation capacity (brand creation : Aloft, Element)
– Starwood excels in North America – Strong loyalty program
Strength
– High sensitivity to the economic fortunes of its domestic market (confinement to upscale and luxury segments)
– Dependence on North America– Limited presence in emerging markets – Old designed Sheraton network, requiring a
strong and expensive renovation program
Weaknesses
– Development of two new brands in the limited-service segment opening potential for new customers
– Consolidation of presence in Europe with the acquisition of Le Méridien
– Intensification of competition in mature markets is likely to favor major brands with high levels of consumer recognition and significant marketing resources
Opportunities
– Over reliance on upscale hotels may erode– Starwood‘s potential to boost sales in line with
consumer trends towards low-cost travel– Timeshare segment trend to be considered with
caution
Threats
10. SWOT analysis
19
11. Company history
- Acquisition of Le Méridien which greatly increased the company's operations in Europe- Launch of A Loft, a new hotel brand based on W hotels
- Starwood's founder and CEO Barry Sternlicht stepped down as CEO, to focus his attention on his other firm, Starwood Capital. He remained on the Board of Directors until 2005
- Change of the corporate form from an REIT to a C-Corporation- Acquisition of Vistana Inc. renamed Starwood Vacation Ownership
- Acquisitions of Westin H&R and ITT Sheraton Corporation - Starwood is removed from the S&P 500 as no REIT is allowed in the index.
- Starwood Capital takes control of a distressed NYSE listed company: Hotel Investors Trust, a REIT and renamed it Starwood Lodging (Starwood keeps its NYSE stock symbol, HOT)
- Barry Sternlicht forms Starwood Capital Partners in 1991 in Chicago backed by high net worth families specializing in real estate acquisitions. Starwood Capital buys its first hotels in 1993
- Launch of W Hotels, a new lifestyle brand
Source: Datamonitor company profiles
- Incorporation of Starwood
- Creation of Starwood
- Launch of Element, a new brand on the extended stay segment
2005
2004
1999
1998
1995
1991
1980
2006
1969
1997
20
Full Service
St Regis
The Luxury Collection
W Hotels
Westin
Le Meridien
Sheraton
Limited ServiceFour Points
Aloft
Extended Stay Element
Timeshare Starwood Vacation Ownership
Source: Starwood’s FY results 2010
12. Brands description
Starwood Brands PortfolioFrom midscale to luxury with clear lifestyle positioning
21
LeisureBusiness “New Generation” niche
Authentic LuxuryBespoke services Unique / Local
Group of hotels
TrendsetterDesign / Innovation
Extended stayEco-friendly
Casual / UrbanSuites
Upscale
High-end luxury
Midscale
Upper upscale
Pric
e se
gmen
tatio
n
Lifestyle segmentation
19 h.
38 h.
76 h.
6 h.45 h.
100 h.
Bus. & LeisureChic and culturedFrench heritage
Focus European market
176 h.
Bus. & LeisureComfort / Wellness
Global standardsFocus US market
403 h.Bus. & Leisure
Accessibility / Conviviality
158 h.
Network figures as of end 2010
BusinessComfort / Functional
Starwood – Company profileDecember 2010
9%50% 13% 27%North AmericaEMEAAPACSouth America
75%20% 5%OwnedManagedFranchised
15%13% 36% 37%North AmericaEMEAAPACSouth America
St. Regis19 hotels / 3,860 rooms
22
Luxury brand (Starwood’s flagship brand) Concept: Full service, authentic luxury
heritage, tradition and opulence Target : Industry leaders with
entrepreneurial spirit, international dignitaries, style pacesetters, contemporary epicureans, “Connoisseurs of the art of living”
Location : World’s most prestigious places (urban & resort). Best address in town.
Main competitors : Sofitel Legend, Ritz-Carlton, the Waldorf-Astoria Collection
RevPar 2010 : $186 (incl. Luxury Collection)
Brand internationalization Portfolio to double by 2014. 5k rooms in the pipeline, with focus on
Middle East and China Comm’ emphasizing on quality and
bespoke services
Positioning
Existing network 19 hotels / 3,860 rooms(average of 203 r. per hotel)
Geographical footprint
– Worldwide brand– 9 countries
Pipeline
– 5k rooms (+130% vs. exist.)– Focus on ME (2k) and China (1k)
Operating type: mainly Mngt
Strategy
Network
Starwood – Company profileDecember 2010
The Luxury Collection76 hotels / 12,399 rooms
23
Luxury “brand” (2nd largest luxury “brand” ww). Group of hotels, rather than brand
Concept: Full service, Legendary palaces and remote retreats. Unique and indigenous experiences, Non standardized hotels (label / group of hotels)
Target : Global discerning adventurers Location : World’s most prestigious places,
either primary cities or resort places Main competitors : Sofitel Legend,
Bulgari, the Waldorf-Astoria Collection, Relais & Chateaux
RevPar 2010 : $186 (incl. St. Regis)
Limited pipeline vs. other brands Development focused on China and ME Comm’ emphasizing on a unique location
and experience
13%14% 55% 17%North AmericaEMEAAPACSouth America
38%15% 48%OwnedManagedFranchised
8%7% 32% 52%North AmericaEMEAAPACSouth America
Positioning
Strategy
Existing network 76 hotels / 12,399 rooms(average of 163 r. per hotel)
Geographical footprint
– Worldwide brand with focus on EMEA
– 28 countries
Pipeline
– Limited : 2k rooms (+18%)– 80% of pipeline in emerging markets
Operating type : mix model
Network
Starwood – Company profileDecember 2010
70%30% Owned
Managed
4% 42% 49% 5%
North AmericaEMEAAPACSouth America
W38 hotels / 11,206 rooms
Existing network : 38 hotels / 11,206 rooms(average of 295 r. per hotel)
Geographical footprint
– Mainly US– 10 countries
Pipeline
– 6k rooms (+50% vs. exist.)– 95% out of the US
Operating type : mainly Mngt
24
Upper upscale brand (created in 1999) Concept: Full service, Innovative and
stylish designed hotels, Be the coolest place in town, attractive F&B outlets
Target : New Generation, Younger clients who are into music, fashion, design, etc. Trendsetters interested in the lastest, newest, hippest.
Location : Upscale neighborhood close to business districts
Main competitors : So by Sofitel, Ritz-Carlton, Intercontinental H&R, Conrad H&R, Park Hyatt
RevPar 2010 : $172
Reach 50 hotels in 2-3 years Internationalization with 95% of the
pipeline out of the US Comm’ emphasizing on the “cool” side
Network Positioning
Strategy
76% 11%
North AmericaEMEAAPACSouth America
Starwood – Company profileDecember 2010
65% 12% 19%
North AmericaEMEAAPACSouth America
58%7% 35%OwnedManagedFranchised
16% 13% 45% 25%
North AmericaEMEAAPACSouth America
Westin176 hotels / 68,488 rooms
Existing network : 176 hotels / 68,488 rooms(average of 389 r. per hotel)
Geographical footprint
– Mainly US– 37 countries
Pipeline
– 12k rooms (+18% vs. exist.)– 80% out of the US.
Operating type : mainly Mngt & Fr.
25
Upper upscale brand (Starwood’s flagship brand in the upper upscale segment)
Concept: Full service, Lifestyle hotels with many sub-branded products and services (ex. Westin Heavenly Bed, line of products for bed, bath, spa), Contemporary and zen design, balance between work hard and wellness, “Sure thing” (global standards)
Target : College-educated professionals between 35-49 years old with demanding standards
Location : Primary & sec. cities, Resorts Main competitors : Sofitel, Marriott H&R,
Renaissance, Hilton, Crowne Plaza, Hyatt RevPar 2010 : $118
Active development worldwide with 80% of the pipeline out of the US
Focus on China (4k) and India (1k) Comm’ emphasizing on the comfort,
wellness and common global standards
Network Positioning
Strategy
Starwood – Company profileDecember 2010
11% 59% 28%North AmericaEMEAAPACSouth America
85% 15% Managed
Franchised
42% 58%North AmericaEMEAAPACSouth America
Le Méridien100 hotels / 26,678 rooms
Existing network : 100 hotels / 26,678 rooms(average of 267 r. per hotel)
Geographical footprint
– Worldwide brand , focus on EMEA– 44 countries
Pipeline
– 3.5k rooms (+13% vs. exist.)– 1/3 of the projects in China (1.2k r.)
Operating type : Asset Light
26
Upper upscale brand (Acquired in 2005 to complete Westin’s portfolio in Europe)
Concept: Full service, Westin’s sister brand in Europe, Focus on European and French heritage on food, culture and design, Timeless chic design, Chic, Cultured, Discovery
Target : Upscale travelers, the « creative guest » (engineers, journalists, scientists, architects and entertainment agents).
Location : Primary & sec cities, Resorts Main competitors : Pullman, Marriott H&R,
Renaissance H&R, Crowne Plaza, Hilton RevPar 2010 : $126
Major strategic axis since acquisition (2005): Portfolio “Cleaning up”
- Disposal of 20% of the hotels - 35% of hotels under renovation
Limited pipeline: Europe and Asia only Comm’ emphasizing on a rejuvenated
brand, on difference (European heritage)
Network Positioning
Strategy
Starwood – Company profileDecember 2010
7%49% 25% 19%North AmericaEMEAAPACSouth America
51%6% 42%OwnedManagedFranchised
9%12% 77%North AmericaEMEAAPACSouth America
Sheraton403 hotels / 140,382 rooms
Existing network : 403 hotels / 140,382 rooms(average of 348 r. per hotel)
Geographical footprint
– Worldwide brand– 69 countries
Pipeline
– 22k rooms (+16% vs. exist.)– Strong focus on China (14k).
Operating type : Asset Light
27
Upscale brand: Starwood largest and most important brand, from both a footprint (47%) and revenue standpoint. Heterogeneous segment positioning by geography: Upscale out of the US vs. lower upscale in the US
Concept: Full service, Approachable luxury Target : Both business and leisure
travelers (Family) Location : Primary & sec. cities, Resorts Main competitors : Pullman, Marriott H&R,
Renaissance H&R, Crowne Plaza, Hilton, Hyatt Regency
RevPar 2010 : $94
3-year revitalizing brand program of $6bn: renovation of 90 hotels in progress, removal of 35 off brand hotels
Largest pipeline, with focus on APAC Comm’ emphasizing on the accessibility
and conviviality / sharing
Network Positioning
Strategy
Starwood – Company profileDecember 2010
Existing network : 158 hotels / 27,391 rooms(average of 173 r. per hotel)
Geographical footprint
– Mainly US
Pipeline
– 10k rooms (+37% vs. exist.)– Focus on the US (33%), China (32%)
Operating type : mainly Franchise
24% 75%OwnedManagedFranchised
38% 15% 47%
North AmericaEMEAAPACSouth America
Four Points by Sheraton (1/2)158 hotels / 27,391 rooms
28
Upper-midscale brand Concept: Limited service, Derived from
Sheraton, Most global mid-market brand, Honest uncomplicated comfort
Target : Business travelers and small conventions
Location : Mainly urban locations near airports and business centers
Main competitors : Mercure, Novotel, Courtyard, Hyatt Place
RevPar 2010 : $69
Repositioning from mid to upper-midscale
- Over $1bn invested in renovations, conversions and new hotels
- Affiliation to Sheraton Second largest pipeline Comm’ emphasizing on business target
Network Positioning
Strategy
67% 14%
North AmericaEMEAAPACSouth America
Starwood – Company profileDecember 2010
Ownership
Four Points by Sheraton (2/2) Affiliation brand strategy: case study
Four Points by Sheraton was created as Sheraton’ sister midscale brand. Operated as a stand-alone brand only for 2 years, being then rebranded with Sheraton affiliation A $1bn rejuvenation plan between 2004 and 2010 resulted in a 70% turnover of the portfolio and in a repositioning on
the upper-midscale segment.
29
Upscale
Midscale
1995 1998 2000 2010
Sheraton H&R Starwood
• Creation of Four Points by Sheraton Hotels
• Brand created to replace Sheraton Inns brand
• Acquisition by Starwood of ITT Sheraton, Four Points parent company
• Rebranding : brand operated as Four Points
• Relaunch of Four Points by Sheraton
• Launch of a $1 b rejuvenation plan
• Repositioning of the brand: from midscale to upper midscale
2004
Affiliation to support brand performance & enable repositioning
92%North AmericaEMEAAPAC
88%OwnedManagedFranchised
57% 7% 32% 4%
North AmericaEMEAAPACSouth America
Aloft a vision of W hotels45 hotels / 6,777 rooms
Existing network : 45 hotels / 6,777 rooms (average of 151 r. per hotel)
Geographical footprint
– Focus on US
Pipeline
– 6.5k rooms (+100%)– Start of internationalization process
Operating type : mainly Franchise
30
Midscale brand (created in 2005) Concept: Limited service, Concept derived
from W., More casual, social and affordable than W hotels, Urban-style business / boutique hotel brand.
Target : New generation, Young and fashion-conscious oriented
Location : Urban areas, unexpected places
Main competitors : Indigo Hotel, SuiteNovotel
RevPar 2009 : $86
Network to be doubled by 2014 Initialization of international development
with focus on China and India Affiliation to W hotels Comm’ emphasizing on the urban style
Network Positioning
Strategy
Starwood – Company profileDecember 2010
100% North America
16% 84% Owned
Franchised
87% 13%
North AmericaEMEAAPACSouth America
Element by Westin9 hotels / 1,428 rooms
Existing network : 9 hotels / 1,428 rooms in operation = 159 rooms per hotel on average
Geographical footprint
– US only
Pipeline
– 2k rooms (+140% vs. exist.)– 11 hotels in the US, 1 in Abu Dhabi
Operating type : Franchise mainly
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Midscale brand (created in 2008) Concept: Extended Stay, Smart and
renewing brand with an emphasis on nature, Built eco-friendly
Target : New Generation, Green-minded travelers, Extended stay (Leisure)
Location : Urban areas Main competitors : Adagio, TownePlace
Suites, Summerfield Suites
Aggressive launch of the brand confirmed Affiliation to Westin brand Still focused on the US, but with first
move of internationalization. Comm’ emphasizing on the green attitude
Network Positioning
Strategy
Starwood – Company profileDecember 2010
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13. Executive Officers
Frits Van PaaschenCEO
Mathew E. AvrilPresident Hotel Group
Jeffrey M. CavaExecutive Vice President and Chief Human Resources Officer
Vasant M. PrabhuExecutive Vice President andChief Financial Officer
Simon M. TurnerPresident Hotel Group
Philip P. McAveetyExecutive Vice President andChief Brand Officer
Keneth S. SiegelChief Administrative Officer, General Counsel and Secretary