China Becomes Starwood’s Second Largest Hotel Market Behind U.S.

Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT) is lengthening its long established lead in China as one of the largest four and five star hotel operators here with 62 existing hotels and a pipeline of 86 new hotels. Now through 2011, one in every three new Starwood hotels will open in China, including new brand flagships for eight of its nine brands. China is now Starwood’s second largest hotel market in the world, behind only the United States. “China is one of the world’s fastest growing domestic and outbound travel markets,” said Frits van Paasschen, President and CEO of Starwood. “Demand continues to outpace supply in China, and there is still a long runway for growth especially when you consider that China has 171 cities with populations of more than one million, most of which do not yet have a major international branded hotel. It is not hard to imagine that we will ultimately have as many hotels in China as we do in the United States, which is more than 450.”

First Mover Advantage Key to Starwood’s Dominance in China

Starwood’s first-mover advantage in China dates back to 1985 and the landmark debut of The Great Wall Sheraton Hotel in Beijing, which was the first international branded hotel in the People’s Republic of China. Today, Starwood has a significantly larger footprint than its competitors, and the largest pipeline of new hotels in the four and five star category. “Starwood’s long legacy in China gave us a considerable head start. Today, with more than 30 years of experience in the market, longstanding native Chinese teams and valuable relationships with local owners and developers, this advantage continues to be meaningful,” said Miguel Ko, Chairman and President of Starwood’s Asia-Pacific Division, a Chinese native who began his career with Starwood in 1979.

China Provides Blueprint for Growth to Emerging Markets Around the Globe

According to van Paasschen, Starwood’s growth in China is illustrative of growth opportunities in other markets throughout Asia Pacific, Africa, the Middle East and Latin America. “Many predict that more than 70% of the world’s growth over the next decade will come from emerging markets, which is consistent with Starwood’s skew towards development in these markets. China recognizes that hotels are an essential component of infrastructure growth, and other fast growing markets are following suit. As the world’s most global hotel company with the strongest presence in emerging markets, these trends work in our favor, and we could not be more bullish on our long-term prospects.”

Intra-China and Chinese Outbound Travel on the Rise

“When we opened our first hotels in China, we were basically an outpost for Western travelers,” says Simon Turner, President of Global Development for Starwood. “Today, more than 50% of our guests in China are Chinese. The Chinese are beginning to become a major global travel force as well, and by 2015 China will have 100 million outbound travelers, the largest in the world. For some perspective, that is more people than visit France each year, which is the number one international tourist destination in the world. When they travel abroad, the Chinese will stay with the hotel brands they know from home, which underscores the significance of our growing footprint of flagship hotels in China and its halo effect on Starwood’s hotels around the world.”

Eight Out of Nine Starwood Brands Fly Flags in China

* With 31 existing hotels and another 34 in the pipeline, Sheraton Hotels & Resorts is the dominant upper upscale brand in China and leads Starwood’s growth here. Sheraton’s heritage as the first international branded hotel in burgeoning urban locations continues today, as evidenced by new hotels planned in Jiangyin and Huzhou.
* Benefiting from Sheraton’s strong brand awareness, sister brand Four Points by Sheraton has 11 hotels and another 14 poised to open, primarily in growing second and third tier cities and tertiary markets.
* The Westin brand boasts a pipeline of 13 new hotels set to join its existing portfolio of eight award-winning properties including the Westin Shanghai and the Westin Guangzhou.
* Global powerhouse Le Méridien currently features hotels in Qingdao, Chongqing, Xiamen, Shanghai, Shimei Bay, Sheshan and Hong Kong with three additional hotels in the pipeline.
* St. Regis, Starwood’s ultra-luxury brand, has fast become a favorite for visiting heads of state and celebrities with flagships in Beijing and Shanghai and is poised to more than triple its presence with seven more hotels in its Chinese pipeline. Next month, the brand will debut its first resort in China with the opening of The St. Regis Lhasa Resort.
* Also on the luxury front, China’s legendary The Astor Hotel in Tianjin made its debut as the first of four hotels to open within Starwood’s esteemed The Luxury Collection.
* Design-led W Hotels made its buzzworthy debut in China with the W Hong Kong in 2008 and next year will open its doors in Taipei and Guangzhou, with another three hotels in its pipeline.
* Starwood’s new Aloft brand, which offers style, design and high tech touches at an affordable price, opened one of its first hotels worldwide in Beijing in 2008, and continues to make inroads here with seven new hotels slated.

Starwood Hotels & Resorts Worldwide, Inc.

Starwood Hotels & Resorts Worldwide, Inc. is one of the leading hotel and leisure companies in the world with 1000 properties in nearly 100 countries and 145,000 employees at its owned and managed properties. Starwood Hotels is a fully integrated owner, operator and franchisor of hotels, resorts and residences with the following internationally renowned brands: St. Regis®, The Luxury Collection®, W®, Westin®, Le Méridien®, Sheraton®, Four Points® by Sheraton, and the recently launched Aloft®, and Element SM. Starwood Hotels also owns Starwood Vacation Ownership, Inc., one of the premier developers and operators of high quality vacation interval ownership resorts. For more information, please visit www.starwoodhotels.com.