Hotels and Motels[1]

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United States - Hotels & Motels 0072 - 0520 - 2009

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INDUSTRY PROFILE

Hotels & Motels in the United States

Reference Code: 0072-0520

Publication Date: October 2010

EXECUTIVE SUMMARY



EXECUTIVE SUMMARY

Market value

The United States hotels & motels industry shrank by 9.5% in 2009 to reach a value of $127.2 billion.

Market value forecast

In 2014, the United States hotels & motels industry is forecast to have a value of $175.3 billion, an increase of 37.8% since 2009.

Market segmentation I

Domestic Consumer is the largest segment of the hotels & motels industry in the United States, accounting for 46.5% of the industry's total value.

Market segmentation II

The United States accounts for 30% of the global hotels & motels industry value.

Market rivalry

The hotels and motels industry’s performance has been negatively affected by the recent global economic downturn and now, more than ever, most hoteliers are searching for demand generators and are relying on direct sales to boost revenues and beat competition.

CONTENTS



TABLE OF CONTENTS

EXECUTIVE SUMMARY 2

MARKET OVERVIEW 6

Market definition 6 Research highlights 7 Market analysis 8

MARKET VALUE 9

MARKET SEGMENTATION I 10

MARKET SEGMENTATION II 11

COMPETITIVE LANDSCAPE 12

LEADING COMPANIES 15

Hilton Hotels Corporation 15 Marriott International 17 Starwood Hotels & Resorts Worldwide, Inc. 21 Wyndham Worldwide Corporation 25

MARKET FORECASTS 29

Market value forecast 29 MACROECONOMIC INDICATORS 30

APPENDIX 32

Methodology 32 Industry associations 33 Related Datamonitor research 33 Disclaimer 34

ABOUT DATAMONITOR 35

Premium Reports 35 Summary Reports 35 Datamonitor consulting 35

CONTENTS



LIST OF TABLES Table 1: United States hotels & motels industry value: $ billion, 2005–09 9

Table 2: United States hotels & motels industry segmentation I:% share, by value, 2009 10

Table 3: United States hotels & motels industry segmentation II: % share, by value, 2009 11

Table 4: Hilton Hotels Corporation: key facts 15

Table 5: Marriott International: key facts 17

Table 6: Marriott International: key financials ($) 19

Table 7: Marriott International: key financial ratios 19

Table 8: Starwood Hotels & Resorts Worldwide, Inc.: key facts 21

Table 9: Starwood Hotels & Resorts Worldwide, Inc.: key financials ($) 22

Table 10: Starwood Hotels & Resorts Worldwide, Inc.: key financial ratios 23

Table 11: Wyndham Worldwide Corporation: key facts 25

Table 12: Wyndham Worldwide Corporation: key financials ($) 26

Table 13: Wyndham Worldwide Corporation: key financial ratios 27

Table 14: United States hotels & motels industry value forecast: $ billion, 2009–14 29

Table 15: United States size of population (million), 2005–09 30

Table 16: United States GDP (constant 2000 prices, $ billion), 2005–09 30

Table 17: United States GDP (current prices, $ billion), 2005–09 30

Table 18: United States inflation, 2005–09 31

Table 19: United States consumer price index (absolute), 2005–09 31

Table 20: United States exchange rate, 2005–09 31

CONTENTS



LIST OF FIGURES Figure 1: United States hotels & motels industry value: $ billion, 2005–09 9

Figure 2: United States hotels & motels industry segmentation I:% share, by value, 2009 10

Figure 3: United States hotels & motels industry segmentation II: % share, by value, 2009 11

Figure 4: Marriott International: revenues & profitability 20

Figure 5: Marriott International: assets & liabilities 20

Figure 6: Starwood Hotels & Resorts Worldwide, Inc.: revenues & profitability 23

Figure 7: Starwood Hotels & Resorts Worldwide, Inc.: assets & liabilities 24

Figure 8: Wyndham Worldwide Corporation: revenues & profitability 27

Figure 9: Wyndham Worldwide Corporation: assets & liabilities 28

Figure 10: United States hotels & motels industry value forecast: $ billion, 2009–14 29

MARKET OVERVIEW



MARKET OVERVIEW

Market definition

The hotels & motels industry value consists of all revenues generated by hotels, motels and other accommodation providers through the provision of accommodation and foodservice. The value does not include any revenues generated through other interests, such as casinos, shops and telecommunication services. The industry is segmented according to the origin of the revenues (domestic consumers, domestic business and international business & consumers). Any currency conversions included within this report have been calculated using constant 2009 annual average exchange rates.

For the purposes of this report, the Americas consists of North America and South America.

North America consists of Canada, Mexico, and the United States.

South America comprises Argentina, Brazil, Chile, Colombia, and Venezuela.

MARKET OVERVIEW



Research highlights

The US hotels & motels industry had total revenue of $127.2 billion in 2009, representing a compound annual growth rate (CAGR) of 0.9% for the period spanning 2005-2009.

The domestic consumer segment was the industry's most lucrative in 2009, with total revenue of $59.1 billion, equivalent to 46.5% of the industry's overall value.

The performance of the industry is forecast to accelerate, with an anticipated CAGR of 6.6% for the five-year period 2009-2014, which is expected to drive the industry to a value of $175.3 billion by the end of 2014.

MARKET OVERVIEW



Market analysis

The US hotels & motels industry has been decelerating in recent years, suffering a severe decline of -9.5% in 2009. A strong recovery is expected in 2010, with strong growth anticipated for the remainder of the forecast period.

The US hotels & motels industry had total revenue of $127.2 billion in 2009, representing a compound annual growth rate (CAGR) of 0.9% for the period spanning 2005-2009. In comparison, the European and Asia-Pacific industries grew with CAGRs of 1.2% and 3.6% respectively, over the same period, to reach respective values of $179.3 billion and $75.2 billion in 2009.

The domestic consumer segment was the industry's most lucrative in 2009, with total revenue of $59.1 billion, equivalent to 46.5% of the industry's overall value. The domestic business segment contributed revenue of $40.7 billion in 2009, equating to 32% of the industry's aggregate value.

The performance of the industry is forecast to accelerate, with an anticipated CAGR of 6.6% for the five-year period 2009-2014, which is expected to drive the industry to a value of $175.3 billion by the end of 2014. Comparatively, the European and Asia-Pacific industries will grow with CAGRs of 4.8% and 8.3% respectively, over the same period, to reach respective values of $226.2 billion and $112 billion in 2014.

MARKET VALUE



MARKET VALUE

The United States hotels & motels industry shrank by 9.5% in 2009 to reach a value of $127.2 billion.

The compound annual growth rate of the industry in the period 2005–09 was 0.9%.

Table 1: United States hotels & motels industry value: $ billion, 2005–09 Year $ billion € billion % Growth2005 122.7 88.2 2006 133.4 95.9 8.7%2007 139.4 100.3 4.5%2008 140.6 101.1 0.9%2009 127.2 91.5 (9.5%)

CAGR: 2005–09 0.9%

Source: Datamonitor D A T A M O N I T O R

Figure 1: United States hotels & motels industry value: $ billion, 2005–09


MARKET SEGMENTATION I



MARKET SEGMENTATION I

Domestic Consumer is the largest segment of the hotels & motels industry in the United States, accounting for 46.5% of the industry's total value.

The domestic business segment accounts for a further 32% of the industry.

Table 2: United States hotels & motels industry segmentation I:% share, by value, 2009 Category % ShareDomestic Consumer 46.5%Domestic Business 32.0%International 21.5%

Total 100%


Figure 2: United States hotels & motels industry segmentation I:% share, by value, 2009


MARKET SEGMENTATION II



MARKET SEGMENTATION II

The United States accounts for 30% of the global hotels & motels industry value.

Europe accounts for a further 42.2% of the global industry.

Table 3: United States hotels & motels industry segmentation II: % share, by value, 2009 Category % ShareEurope 42.2%United States 30.0%Asia-Pacific 17.7%Rest of the World 10.1%

Total 100%


Figure 3: United States hotels & motels industry segmentation II: % share, by value, 2009


COMPETITIVE LANDSCAPE




The hotels & motels market will be analyzed taking hotel and motel operators as players. The key buyers will be taken as consumers, and property owners, interior designers, and information and computer technology manufacturers as the key suppliers.

The hotels and motels industry’s performance has been negatively affected by the recent global economic downturn and now, more than ever, most hoteliers are searching for demand generators and are relying on direct sales to boost revenues and beat competition.

Within the hotels and motels industry, where switching costs are rather negligible and competing on price alone is no longer a key to success, brand recognition and innovation helps to attract first-time customers and also repeat business. Suppliers include providers of various goods and services, as well as a qualified workforce. Due to a high reliance on sophisticated technology and systems and the growing importance of mobile communication channels, some suppliers may exert strong supplier power. Globalization is an important key driver within the industry, with emerging markets offering significant opportunities, but it also involves employing various business strategies and extra costs. Substitutes include alternative forms of leisure accommodation. The presence of strong, international players, coupled with decline in industry value in 2009, boosts the rivalry level.

Within the hotels & motels industry, which is both mature and very competitive, brand recognition is important to attract consumers. Many of the major players also operate extensive franchise businesses that make brand recognition particularly important. A strong brand image helps to attract first-time customers and also to repeat business as switching costs are negligible in this industry. Buyers are generally price sensitive, except in the premium market. Innovation is also vitally important in attracting customers, as competing on price alone can be difficult. Operators try to tempt customers with new ideas, such as capsule style hotels aimed at the mid-market consumer. In the premium segment, companies can attract customers by better security and more facilities, such as spas, gyms and integrating hotels into golf complexes. Some larger companies have begun to introduce loyalty schemes, by offering a points system or air miles to regular customers, which reduces buyer power. As customers are numerous and mostly small in size, their buyer power is reduced since the impact of losing one customer is not a significant threat to business. Overall, buyer power is moderate.

Suppliers in this market are defined as property owners, developers and real estate companies, interior design and furnishing companies, architects, management and training service providers, marketing companies, industry consultants, and information and computer technology (ICT) manufacturers. Real estate companies are often much smaller companies than hotel and motel operators and rather than being globalized, they are usually local to the property they develop, which reduces their financial muscle and ability to negotiate favorable contracts. Furthermore, hotels can integrate backwards and operate their own real estate business. The quality and availability of supplier services and equipment is essential to the hotel and motel industry. Hotel operators are reliant upon sophisticated technology and systems, including technology utilized for property management, procurement and reservation systems.




Applications, databases and networks must integrate easily with each other and third-party systems to facilitate collaborations with partners. The growing importance of the mobile channel is clear. The technology platforms used by hospitality companies must support and enable all user interactions to integrate in the future, from phones to fax machines to personal computers to personal digital assistants (PDAs) to mobiles. This strengthens supplier power. The industry is also labor intensive. In a competitive industry, sales people who take the time to understand clients’ needs can hold an advantage. Staff costs are significant as success in the hotel industry is strongly influenced by the quality of the service provided. Supplier power is assessed as moderate overall.

The hotels & motels industry is strongly influenced by travel and tourism trends. The situation within the industry has changed significantly in recent years. The business used to be strong and the biggest challenge was finding space to book. Now that it is a buyer’s market, most hotel sales people are faced with the challenge of finding customers. The recent global economic downturn had an adverse effect on the industry’s performance and now more than ever, most hoteliers are searching for demand generators and are relying on direct sales to impact revenues and fill the significant void left by the ailing economy. This may act as deterrent for newcomers; however, the growth forecast is positive, which may boost the risk of new entrants in future.

It is possible to enter the industry in a relatively low-key way by opening a small, independent hotel or motel as a sole proprietor. However, the industry is capital intensive, and for a large-scale entrance, upfront investment in buildings, décor and furnishings, ICT infrastructure and staff is expensive. In a highly competitive business, conducting operations using all the latest technology, as well as constantly developing the tools and skills required, is essential (e.g. allowing travelers to check in to hotel rooms remotely). The more demanding customer of the future will want to engage with a hotel across all touch points (i.e. text, email, and social media) where appropriate. Hotels will need to capture and store more data, yet access to it must be faster and more targeted in order to personalize the guest experience.

As tourism is not a vital consumer good, it will tend to be cyclical and travelers are increasingly expecting bargain rates while refusing to tolerate lapses in quality and service. To sustain revenue growth in the premium market, operating a chain of hotels is often an important strategy as it reduces dependence on tourism in any particular location. However, in order to open an international chain of hotels, regulations in terms of real estate and buying abroad need to be taken into consideration and can therefore be restrictive in some countries. The purchase, leasing, and management of property may involve legal and financial complexities, necessitating spending on professional services.

Globalization is an important key driver within the industry, with emerging markets, i.e. Russia, India and China, offering significant opportunities, but it also involves employing various business strategies and extra costs. For example, customers from China will search for, plan and book a hotel in a different way from customers from Russia. The notion of brand integrity is crucial: hotels will need to supply consistent service in a global environment, while adapting to support customers with new cultural background and sensitivities in local markets.




Some companies have been able to develop a certain business model to avoid many of these extra costs; however, a completely new entrant might not have sufficient scale economies to attempt this. Some companies, such as Marriott, have developed business models involving third parties deal with its property, which has allowed it to bring costs down. Overall, the likelihood of new entrants is moderate.

Substitutes to hotels and motels include alternative forms of leisure accommodation, such as camping facilities or recreational vehicles, or informal accommodation with friends and family. Switching costs range from negligible to high (e.g. the purchase price of a recreational vehicle). While all these substitutes offer the same basic function of a place to stay, up-market hotels and motels often provide added benefits, such as spas and restaurants. The threat of substitutes is assessed as moderate.

The industry includes several large hotel operators, such as Starwood, Marriott and Hilton, with most of the leading players operating several different branded chains. However, there are also a large number of independents present in the industry. Many larger operators have diversified to some extent and own additional businesses, such as casinos, restaurants and shops. To attract and sustain more business, operators try to offer more and more complex packages and value-added services, such as free breakfast and parking, free third night, etc. Recently, a rising popularity of lifestyle hotels amongst major chains can be observed. Such hotels cater to the conscientious traveler's demands for eco-friendly practices, social responsibility, and affordable style. The largest hotel and motel operators are fairly well insulated from unpredictable market conditions by geographical diversification. However, others are based largely or exclusively in one country. Exit barriers in the industry are fairly high because most of the major tangible assets are highly specific to their industry, and thus harder to divest. This is a likely motivator for many of the global leaders to pursue expansion through franchising and hotel management services, as well as through the acquisition of properties. Many big chains have adopted an asset-light business model in order to fuel expansion; selling off assets has allowed large competitors to raise capital and invest in expanded operations, which again intensifies the competitive nature of the industry. In addition, the declining industry value in 2009 forces players to fight fiercely over a limited share of revenues. However, the industry is expected to recover and post good rates of growth in the forecast period, which may ease the competition somewhat. Overall, rivalry in the industry is strong.

LEADING COMPANIES



LEADING COMPANIES

Hilton Hotels Corporation

Table 4: Hilton Hotels Corporation: key facts Head office: 7930 Jones Branch Drive, Suite 1100, McLean, Virginia 22102, USA Telephone: 1 703 883 1000 Website: www.hiltonworldwide.com Financial year-end: December Source: company website D A T A M O N I T O R

HHC is one of the leading global hospitality companies which own more than 3,400 hotels in 79 countries and territories. The company owns, manages or franchises a hotel portfolio of best known brands. The company primarily operates in the US. HHC hotel portfolio includes Hilton HHonors; Waldorf Astoria; Conrad; Hilton; Doubletree; Embassy Suites; Hilton Garden Inn; Hampton; Homewood Suites; Hilton Grand Vacations. Hilton HHonors is the world's leading frequent-guest program. This division operates 3,300 hotels worldwide. It is the only program that offers its members the ability to earn points and miles for the same hotel stay and allow members to redeem points.

The Waldorf Astoria Collection operates 20 properties and 8,800 rooms in the luxury hotel segment. Waldorf offers hotel rooms as well as spas across all its properties. Its key properties include the Waldorf Astoria New York and Waldorf Astoria Orlando.

Conrad is a global, contemporary luxury brand. Conrad Hotels & Resorts has presence in key destinations across the globe with four hotels & resorts in Europe, two in the Middle East and Africa, eight in Asia-Pacific and four in the Americas. There are nearly 6,520 rooms worldwide. Furthermore, HHC has plans to expand into new markets, including: UAE, Portugal, China and Thailand.

Hilton Hotels & Resorts is a full-service hospitality segment of HHC. This concept operates more than 520 hotels and resorts, with nearly 181,030 rooms in 76 countries across six continents.

The Doubletree brand primarily caters business and leisure travelers. The brand operates a total of 46,000 rooms across its 180 Doubletree hotels (with 22 in development process) including 135 Doubletree Hotels & Resorts, 32 Doubletree Guest Suites and 13 Doubletree Clubs.

Embassy Suites Hotels is the one of the largest hotel brands in the premium segment in the US. It operates in seven countries, and in the US it is present in 39 states and 1 US territory. There are 200 Embassy Suites Hotels (52 of them are in development stage) with 48,000 suites.

LEADING COMPANIES



Hilton Garden Inn (Hilton Garden) is a mid priced brand. Hilton Garden operates a portfolio of nearly 500 hotel globally (450 hotels in the US, Canada and Latin America) with 65,000 rooms.

Hampton is one of the fastest growing hotel chains. The Hampton brand includes Hampton Inn and Hampton Inn & Suites hotels. There are more than 1,700 Hampton hotels with more than 168,000 guest rooms located in 49 states in the US. Hampton's international properties are located in: Canada, Costa Rica, Ecuador, Mexico, and Puerto Rico.

Homewood Suites is a premium product which offers guest suites with fully equipped kitchens with microwave ovens, full-size refrigerators, dishwashers, twin-burner stoves, coffee-makers, utensils and place settings.

HHC has more than 275 hotels located throughout the US, Canada and Mexico, totaling more than 29,000 guest suites. More than 120 new Homewood Suites projects are in the pipeline.

Hilton Grand Vacations develops markets and operates a system of high-quality vacation ownership resorts in select vacation destinations. Hilton Grand Vacations operates 38 units with 4,500 rooms. The company also manages and operates two innovative club membership programs: Hilton Grand Vacations Club and The Hilton Club, providing exclusive exchange, leisure travel and reservation services. The company is also engaged in eBusiness through the operation of the Hiltonworldwide.com, Hilton.com, Doubletree.com, EmbassySuites.com, Hamptoninn.com, HomewoodSuites.com and HiltonGardenInn.com websites, which provides customer service in addition to the Hilstar reservation system used by HRW. It also provides internet access and business services in hotel guestrooms and other areas at certain hotels.

Key Metrics

HHC, being a privately owned company, does not announce its financials in the public domain.

LEADING COMPANIES



Marriott International

Table 5: Marriott International: key facts Head office: 10400 Fernwood Road, Bethesda, Maryland 20817, USA Telephone: 1 301 380 3000 Fax: 1 301 380 3967 Website: www.marriott.com Financial year-end: December Ticker: MAR Stock exchange: New York Source: company website D A T A M O N I T O R

Marriott is a worldwide operator and franchiser of hotels and related lodging facilities. It has a strong presence in the US and 68 other countries and territories. The company operated or franchised 3,420 lodging properties worldwide, with 595,461 rooms as of FY2009. In addition, it provides 2,072 furnished corporate housing rental units and 30 home and condominium products.

The company operates through five business segments: North American full-service lodging; North American limited-service lodging; international lodging; luxury lodging; and timeshare.

The North American full-service lodging segment includes properties located in continental US and Canada and operates brands like: Marriott Hotels & Resorts, JW Marriott, Renaissance Hotels, and Renaissance ClubSport. Marriott Hotels & Resorts is the company's global flagship brand, providing 521 full-service hotels and resorts, 343 in the US and the remaining 178 in international locations. JW Marriott Hotels & Resorts is the premium brand of the company, offering luxurious hotels and resorts services. Renaissance Hotels & Resorts is a distinctive, global, full-service brand that targets business and leisure travelers.

The company's North American limited-service lodging segment also operates in the US and Canada through brands, such as; Courtyard, Fairfield Inn & Suites, SpringHill Suites, Residence Inn, TownePlace Suites and Marriott ExecuStay. Courtyard is the company's upper-moderate-priced, select-service hotel product aimed primarily at transient business travel. Fairfield Inn competes in the lower moderate-price tier and is targeted at value-conscious business and leisure travelers. SpringHill Suites is an all-suite brand in the upper moderate-price tier segment. The segment also includes extended-stay lodging brands, such as: Residence Inn, TownePlace Suites and Marriott ExecuStay.

LEADING COMPANIES



The company's international lodging includes its operations outside the US and Canada, with the brands: Marriott hotels & resorts, JW Marriott hotels & resorts, Renaissance hotels & resorts, Courtyard, Fairfield Inn, Residence Inn, and Marriott Executive Apartments.

The company recently added one more brand, Autograph Collection, to its portfolio. Autograph Collection comprises of upper-upscale and luxury, independent hotels located in major cities worldwide.

Marriott's luxury lodging operates around the world through brands like The Ritz-Carlton and Bulgari hotels & resorts. The Ritz-Carlton is a premium brand in the luxurious hotel space. Bulgari hotels & resorts are a collection of luxury properties, which have been developed in partnership with jeweler and luxury goods designer Bulgari.

The company's timeshare brands are: Marriott Vacation Club (MVC), The Ritz-Carlton Destination Club, The Ritz-Carlton Residences and Grand Residences. The MVC brand, under this segment, offers full-service villas in 50 locations worldwide. The Ritz-Carlton Club and Residences offers luxurious vacation packages while the Grand Residences offers fractional ownership and personal residence on rents in its luxurious resorts.

Key Metrics

The company recorded revenues of $10,908 million in the fiscal year ending December 2009, a decrease of 15.3% compared to fiscal 2008. Its net loss was $346 million in fiscal 2009, compared to a net income of $362 million in the preceding year.

Marriott generates revenues through five business segments: North American full-service (44.8% of the total revenues during FY2009), North American limited-service (18.3%), timeshare (13.3%), luxury (13.0%) and international (10.6%).

In FY2009, the North American Full-Service segment recorded revenues of $4,848 million, a decrease of 13.9% over 2008.

The North American Limited-Service segment recorded revenues of $1,986 million in FY2009, a decrease of 11.1% over 2008.

The timeshare segment recorded revenues of $1,439 million in FY2009, a decrease of 17.8% over 2008.

The luxury segment recorded revenues of $1,413 million in FY2009, a decrease of 14.8% over 2008.

LEADING COMPANIES



Table 6: Marriott International: key financials ($) $ million 2005 2006 2007 2008 2009Revenues 11,550.0 12,160.0 12,990.0 12,879.0 10,908.0Net income (loss) 669.0 608.0 696.0 362.0 (346.0)Total assets 8,530.0 8,588.0 8,942.0 8,903.0 7,933.0Total liabilities 5,278.0 5,970.0 7,513.0 7,523.0 6,791.0Employees 143,000 150,600 145,000 145,000 137,000 Source: company filings D A T A M O N I T O R

Table 7: Marriott International: key financial ratios Ratio 2005 2006 2007 2008 2009Profit margin 5.8% 5.0% 5.4% 2.8% (3.2%)Revenue growth 14.4% 5.3% 6.8% (0.9%) (15.3%)Asset growth (1.6%) 0.7% 4.1% (0.4%) (10.9%)Liabilities growth (39.1%) 13.1% 25.8% 0.1% (9.7%)Debt/asset ratio 61.9% 69.5% 84.0% 84.5% 85.6%Return on assets 7.8% 7.1% 7.9% 4.1% (4.1%)Revenue per employee $80,769 $80,744 $89,586 $88,821 $79,620Profit per employee $4,678 $4,037 $4,800 $2,497 ($2,526) Source: company filings D A T A M O N I T O R

LEADING COMPANIES



Figure 4: Marriott International: revenues & profitability

Source: company filings D A T A M O N I T O R

Figure 5: Marriott International: assets & liabilities


LEADING COMPANIES



Starwood Hotels & Resorts Worldwide, Inc.

Table 8: Starwood Hotels & Resorts Worldwide, Inc.: key facts Head office: 1111 Westchester Avenue, White Plains, New York 10604, USA Telephone: 1 914 640 8100 Fax: 1 914 640 8310 Website: www.starwood.com Financial year-end: December Ticker: HOT Stock exchange: New York Source: company website D A T A M O N I T O R

Starwood is engaged in the global operations of hotels and resorts primarily in the luxury and upscale segment of the lodging industry. The company conducts its hotel and leisure business both directly and through its subsidiaries. Starwood is well represented in most major markets around the world through its brands such as St. Regis, The Luxury Collection, W Hotels, Westin, Le Meridien, Sheraton, Four Points, Aloft and Element.

The company operates through two segments: hotels, and vacation ownership and residential.

The company's hotel segment operates primarily in the luxury and upscale segment, representing a worldwide network of owned, leased and consolidated joint venture hotels and resorts, which are operated under the company's proprietary brand names. As of December 2009, the company operated, owned, leased, managed and franchised approximately 979 hotels with 292,000 rooms. Out of which 63 hotels are owned or leased or in which the company has a majority equity interest, 440 hotels are managed by the company on behalf of third-party owners, and 476 hotels are franchised. Starwood's key hotel brands include: St. Regis, The Luxury Collection, W Hotels, Westin, Le Meridien, Sheraton, Four Points, Aloft and Element.

The company's St. Regis, The Luxury Collection, W Hotels, Westin, Le Meridien and Sheraton brands comprises of luxury and upscale full-service hotels, resorts and residences while the Four Points and Aloft are select-service hotels. The company offers extended stay hotels through its Element brand.

The company's vacation ownership and residential segment, is engaged in the development, ownership and operation of vacation ownership resorts, marketing and selling of vacation ownership interests (VOIs), purchase financing, licensing fees from branded condominiums and residences, and sale of residential units.

LEADING COMPANIES



As of December 2009, the company owned 22 vacation ownership resorts and residential properties. The company offers vacation ownership and residential services through Starwood Vacation Ownership and its hotel brands.

Key Metrics

The company recorded revenues of $4,756 million in the fiscal year ending December 2009, a decrease of 17.3% compared to fiscal 2008. Its net income was $73 million in fiscal 2009, compared to a net income of $329 million in the preceding year.

Starwood generates revenues through two business divisions: hotels (85.7% of the total revenues during fiscal year 2009) and vacation ownership and residential (15.5%).

In FY2009, the hotel division recorded revenues of $4,038 million, a decrease of 16.9% as compared to 2008.

The vacation ownership and residential division recorded revenues of $674 million in FY2009, a decrease of 24.6% as compared to 2008.

In FY2009, the United States was the company's largest geographic market, accounting for 72.2% of the total revenues.

Table 9: Starwood Hotels & Resorts Worldwide, Inc.: key financials ($) $ million 2005 2006 2007 2008 2009Revenues 5,977.0 5,979.0 6,153.0 5,754.0 4,756.0Net income (loss) 422.0 1,043.0 542.0 329.0 73.0Total assets 12,494.0 9,280.0 9,622.0 9,703.0 8,761.0Total liabilities 7,283.0 6,272.0 7,546.0 8,082.0 6,937.0Employees 145,000 145,000 155,000 145,000 145,000 Source: company filings D A T A M O N I T O R

LEADING COMPANIES



Table 10: Starwood Hotels & Resorts Worldwide, Inc.: key financial ratios Ratio 2005 2006 2007 2008 2009Profit margin 7.1% 17.4% 8.8% 5.7% 1.5%Revenue growth 11.3% 0.0% 2.9% (6.5%) (17.3%)Asset growth 1.6% (25.7%) 3.7% 0.8% (9.7%)Liabilities growth (2.7%) (13.9%) 20.3% 7.1% (14.2%)Debt/asset ratio 58.3% 67.6% 78.4% 83.3% 79.2%Return on assets 3.4% 9.6% 5.7% 3.4% 0.8%Revenue per employee $41,221 $41,234 $39,697 $39,683 $32,800Profit per employee $2,910 $7,193 $3,497 $2,269 $503 Source: company filings D A T A M O N I T O R

Figure 6: Starwood Hotels & Resorts Worldwide, Inc.: revenues & profitability


LEADING COMPANIES



Figure 7: Starwood Hotels & Resorts Worldwide, Inc.: assets & liabilities


LEADING COMPANIES



Wyndham Worldwide Corporation

Table 11: Wyndham Worldwide Corporation: key facts Head office: 22 Sylvan Way Parsippany, New Jersey 07054, USA Telephone: 1 973 753 6000 Website: www.wyndhamworldwide.com Financial year-end: December Ticker: WYN Stock exchange: New York Source: company website D A T A M O N I T O R

Wyndham Worldwide is a hospitality company. The company offers customers with a choice of hospitality products and services across various accommodation alternatives and price ranges through its portfolio of brands, such as: Wyndham Hotels and Resorts, Ramada, Days Inn, Super 8, Wyndham Rewards, Wingate, Microtel, RCI, The Registry Collection, Endless Vacation Rentals, Landal GreenParks, Cottages4You, Novasol, Wyndham Vacation Resorts, and WorldMark by Wyndham.

Wyndham Worldwide operates through three business segments: vacation ownership, vacation exchange and rentals, and lodging.

The vacation ownership segment markets and sells vacation ownership interests to individual consumers, provides consumer financing in connection with the sale of vacation ownership interests, and provides management services at resorts. The company has developed approximately 150 vacation ownership resorts in the US, Canada, Mexico, the Caribbean and the South Pacific, that represents more than 20,000 individual vacation ownership units and over 830,000 owners of vacation ownership interests.

The vacation exchange and rentals segment provides vacation exchange products and services, and access to distribution systems and networks to resort developers and owners of intervals of vacation ownership interests. It has access to over 73,000 vacation properties, which are comprised of over 4,000 vacation ownership resorts around the world and more than 69,000 vacation rental properties located principally in Europe. It currently makes approximately 1.3 million vacation rental bookings a year. It has relationships with approximately 45,000 independent property owners in 26 countries.

The lodging segment franchises hotels in the upscale, midscale and economy segments of the lodging industry and provides hotel management services to owners of luxury, upscale and midscale hotels. It has over 7,000 franchised hotels, which represent over 593,000 rooms on six continents.

LEADING COMPANIES



The lodging business franchise operates under two models. In North America, the company employs a direct franchise model whereby it contracts with and provides services and assistance directly to independent owner-operators of hotels. In other parts of the world, the company employs either a direct franchise model or a master franchise model whereby it contracts with a qualified, experienced third party to build a franchise enterprise in such third party's country or region. The company's franchised hotels operate under lodging brands, including Wyndham Hotels and Resorts, Wingate by Wyndham, Hawthorn, Ramada, Baymont, Days Inn, Super 8, Microtel, Howard Johnson, Travelodge and Knights Inn.

The company operates a total of 5,694 hotels in the US.

Key Metrics

The company recorded revenues of $3,750 million in the fiscal year ending December 2009, a decrease of 12.4% compared to fiscal 2008. Its net income was $293 million in fiscal 2009, compared to a net loss of $1,074 million in the preceding year.

Table 12: Wyndham Worldwide Corporation: key financials ($) $ million 2005 2006 2007 2008 2009Revenues 3,471.0 3,842.0 4,360.0 4,281.0 3,750.0Net income (loss) 431.0 287.0 403.0 (1,074.0) 293.0Total assets 9,167.0 9,520.0 10,549.0 9,573.0 9,352.0Total liabilities 4,134.0 9,561.0 6,943.0 7,231.0 6,664.0Employees 30,100 30,100 33,200 25,500 24,600 Source: company filings D A T A M O N I T O R

LEADING COMPANIES



Table 13: Wyndham Worldwide Corporation: key financial ratios Ratio 2005 2006 2007 2008 2009Profit margin 12.4% 7.5% 9.2% (25.1%) 7.8%Revenue growth 15.2% 10.7% 13.5% (1.8%) (12.4%)Asset growth 9.9% 3.9% 10.8% (9.3%) (2.3%)Liabilities growth 12.8% 131.3% (27.4%) 4.1% (7.8%)Debt/asset ratio 45.1% 100.4% 65.8% 75.5% 71.3%Return on assets 4.9% 3.1% 4.0% (10.7%) 3.1%Revenue per employee $115,316 $127,641 $131,325 $167,882 $152,439Profit per employee $14,319 $9,535 $12,139 ($42,118) $11,911 Source: company filings D A T A M O N I T O R

Figure 8: Wyndham Worldwide Corporation: revenues & profitability


LEADING COMPANIES



Figure 9: Wyndham Worldwide Corporation: assets & liabilities


MARKET FORECASTS



MARKET FORECASTS

Market value forecast

In 2014, the United States hotels & motels industry is forecast to have a value of $175.3 billion, an increase of 37.8% since 2009.

The compound annual growth rate of the industry in the period 2009–14 is predicted to be 6.6%.

Table 14: United States hotels & motels industry value forecast: $ billion, 2009–14 Year $ billion € billion % Growth2009 127.2 91.5 (9.5%)2010 136.1 97.8 7.0%2011 143.5 103.2 5.5%2012 153.8 110.6 7.1%2013 164.8 118.5 7.2%2014 175.3 126.0 6.3%

CAGR: 2009–14 6.6%


Figure 10: United States hotels & motels industry value forecast: $ billion, 2009–14


MACROECONOMIC INDICATORS




Table 15: United States size of population (million), 2005–09 Year Population (million) % Growth2005 295.6 0.9%2006 298.4 0.9%2007 301.3 1.0%2008 304.1 0.9%2009 307.2 1.0%


Table 16: United States GDP (constant 2000 prices, $ billion), 2005–09 Year Constant 2000 Prices, $ billion % Growth2005 11,165.8 3.0%2006 11,478.4 2.8%2007 11,716.7 2.1%2008 11,763.6 0.4%2009 11,481.3 (2.4%)


Table 17: United States GDP (current prices, $ billion), 2005–09 Year Current Prices, $ billion % Growth2005 12,664.0 6.5%2006 13,439.1 6.1%2007 14,109.1 5.0%2008 14,787.0 4.8%2009 14,380.2 (2.8%)





Table 18: United States inflation, 2005–09 Year Inflation Rate (%)2005 3.4%2006 3.2%2007 2.8%2008 4.0%2009 (0.4%)


Table 19: United States consumer price index (absolute), 2005–09 Year Consumer Price Index (2000 =

100)% Growth

2005 113.4 3.4%2006 117.1 3.2%2007 120.4 2.9%2008 125.2 4.0%2009 124.8 (0.4%)


Table 20: United States exchange rate, 2005–09 Year Exchange rate (€/$)2005 1.24302006 1.25472007 1.36832008 1.46332009 1.3905


APPENDIX



APPENDIX

Methodology

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Review of in-house databases – Created using 250,000+ industry interviews and consumer surveys and supported by analysis from industry experts using highly complex modeling & forecasting tools, Datamonitor’s in-house databases provide the foundation for all related industry profiles

Preparatory research – We also maintain extensive in-house databases of news, analyst commentary, company profiles and macroeconomic & demographic information, which enable our researchers to build an accurate market overview

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Extensive secondary research activities ensure we are always fully up-to-date with the latest industry events and trends

Datamonitor aggregates and analyzes a number of secondary information sources, including: - National/Governmental statistics - International data (official international sources) - National and International trade associations - Broker and analyst reports - Company Annual Reports - Business information libraries and databases

Modeling & forecasting tools – Datamonitor has developed powerful tools that allow quantitative and qualitative data to be combined with related macroeconomic and demographic drivers to create market models and forecasts, which can then be refined according to specific competitive, regulatory and demand-related factors

Continuous quality control ensures that our processes and profiles remain focused, accurate and up-to-date

APPENDIX



Industry associations

American Hotel and Lodging Association 1201 New York Avenue, NW, 600, Washington, DC 20005-3931, USA Tel.: 1 202 289 3100 Fax: 1 202 289 3199 www.ahla.com International Hotel and Restaurant Association 87, rue Montbrillant, 1202 Geneva, Switzerland Tel.: 44 22 734 80 41 Fax: 44 22 734 80 56 www.ih-ra.com

Related Datamonitor research

Industry Profile

Hotels & Motels in Canada

Hotels & Motels in Mexico

Hotels & Motels in Brazil

Hotels & Motels in France

APPENDIX



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