Starwood Adds Most Hotel Rooms In Its History In 2011

From the American Lodging Investment Summit (ALIS) in Los Angeles, Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT) today announced that building on a year of record growth and deal activity in 2011 it plans to open an additional 80 new hotels in 2012, following last year’s addition of 81 new hotels around the globe.

2011: A Year of Record Growth and Deal Momentum

Even against a backdrop of economic and geo-political uncertainty, 2011 was a record growth year for Starwood. Around the world, Starwood opened 21,000 new hotel rooms – the largest organic growth in its history. Importantly, the company also signed 112 new hotel deals, the highest number of new deals since before the global economic crisis.

"Our global multi-brand growth continues unabated and Starwood is particularly well positioned to take full advantage of growth anywhere in the world, whether in established markets or in fast growing economies," said Simon Turner, President of Global Development for Starwood. "In 2012, markets like Brazil, Africa, the Middle East and Indonesia will be ones to watch. In developed markets, conversions continue to drive growth. In Europe, while financing for new builds is scarce, there is a large landscape of independent hotels ripe for flags, and we’re also keenly focused on an expected uptick in portfolio transaction activity in North America which should lead to heightened conversion opportunities."

Starwood’s President and CEO Frits van Paasschen continued, "All pipelines are not created equal. Never in Starwood’s history have we had a pipeline of this scale and quality. Our growth as a percentage of our base continues to exceed that of our competition and with 389 new hotels since 2007, we have more new hotels as a percentage of our portfolio than our competitors, which demonstrates ongoing demand for our sought-after lifestyle brands."

Starwood to Lengthen Luxury and Global Lead in 2012

Turning to 2012, more than 60% of Starwood’s new hotels will be in the luxury and upper upscale segment including the 30th St. Regis hotel, the 80th Luxury Collection hotel and the 45th W hotel. In just four years Starwood has grown its luxury room count by 75% and will celebrate its 150th luxury hotel milestone this year under its St. Regis, Luxury Collection and W Hotels brands. With more luxury hotels than even Four Seasons or Ritz Carlton, Starwood is well positioned to capitalize on wealth creation around the world which continues to fuel demand for luxury hotels.

Influenced by macro economic growth trends, nearly 75% of Starwood’s new hotels in 2012 will open outside North America, strengthening Starwood’s lead as the largest global hospitality company in Asia Pacific, Latin America, the Middle East, Africa and Europe. Starwood’s growing global portfolio will also enhance its stronghold in the world’s fastest growing markets. In fact, across all emerging markets, Starwood is now nearly the same size as Marriott, Hilton and Hyatt combined.

Long Runway to Grow Mid Market Brands Globally

According to Turner, Starwood is also looking to "turbo charge" expansion of its Four Points by Sheraton and Aloft brands. Leveraging its longstanding tenure and teams in key global markets, it’s setting its sights on expanding its mid-market brands in secondary and tertiary markets around the globe where there is a long runway to grow reliable and affordable hospitality. Accounting for 27% of the company’s global development pipeline, Starwood will open its 250th mid market hotel this year fueled by Four Points’s great global momentum, representing almost a quarter of Starwood’s openings and signings last year, as well as new brand Aloft, which launched global from the start, and just opened its 55th hotel.

Deal Momentum and Heightened Opportunity in North America

Even in more challenged markets, Starwood is entering 2012 with new momentum. Denise Coll, President of North America for Starwood said, "In North America, the company signed more new deals in 2011 than in 2010 or 2009. Conversions continue to dominate, and Sheraton and Four Points by Sheraton are leading our growth with great Westin and Luxury Collection conversions as well. Our new owners are benefiting from the strength of our centralized services and the room contribution from Starwood Preferred Guest which is close to 50 percent."

Asia Pacific Continues to Fuel Growth

Driven by phenomenal demand, Starwood will open nearly 60% of its new hotels in Asia Pacific in 2012. The addition of nearly 50 new Starwood hotels will increase the company’s portfolio in the region to 250 hotels by year’s end.

China continues to lead Starwood’s growth in Asia Pacific, accounting for nearly 35 of Starwood’s new hotel openings this year. Starwood is set to open its 125th hotel in Greater China in 2012, fueled by the strength of its Sheraton and Westin brands and increasingly the momentum of Four Points and Aloft. More than one-third of Starwood’s new hotels in China will fly the Sheraton flag, building on the brand’s 30-year legacy in the country. In addition, Westin Hotels will continue its global expansion with the opening of the brand’s 20th hotel in China.

"Starwood is keenly focused on meeting the ever-growing demand for our high-quality brands in China and India, as well as in other fast-growing economies across Asia," said Miguel Ko, Chairman & President, Asia Pacific for Starwood. "For instance, we are experiencing a surge of development in Indonesia, which has a young and growing population of 240 million, an abundance of natural resources, and major tourist destinations."

Starwood will open four new hotels in Indonesia this year, adding to its current portfolio of 12 properties. Future Starwood openings include the just signed W Jakarta and the Le Meridien Bali.

Other strong markets in Asia Pacific include Malaysia, Thailand and Vietnam. Starwood will grow by nearly 50% in Malaysia in the next three years with plans to open another four hotels. In Thailand, Starwood has a robust footprint of 19 hotels, with another five openings planned by 2014. Starwood will also grow its footprint in Vietnam with the opening of Le Meridien Saigon, Starwood’s 4th hotel in Vietnam and its 2nd in Ho Chi Minh City.

The Next Frontier – Brazil and Africa

Starwood is laying the groundwork for future hotel development in Brazil which is poised for a surge in tourism in the run-up to the 2014 World Cup and 2016 Summer Olympics. Starwood, through its Sheraton brand, has been established in Brazil since the 1970s and currently has six hotels there under its Sheraton and Four Points by Sheraton brands in popular destinations such as Rio, Sao Paulo and Porto Alegre. Starwood recently added Development resources in Brazil and launched its website in Portuguese.

"Brazil is one of the most enticing global markets for future hotel development," said Osvaldo Librizzi, President, Latin American Division for Starwood. "It remains one of the world’s great untapped hospitality markets, under-hoteled, and under-flagged. With the influx of new travelers and the infrastructure development activity that comes with that, there is tremendous potential to develop all of our high-caliber brands across Brazil."

Starwood is also eyeing Africa as one of its next growth markets. "As oil and commodity dependent states look to diversify with a focus on tourism coupled with an increase in leisure demand from China and India, Africa is poised for meaningful hotel growth," said Roeland Vos, President, Europe, Africa & Middle East Division for Starwood. Today Starwood is already the largest global hotel company in Africa with nearly 40 hotels primarily across its Le Meridien and Sheraton brands. In 2012 Starwood will open the first St. Regis in the Africa region with the St. Regis Mauritius and at the other end of the spectrum Starwood sees the mid market segment as a particular opportunity for expansion.