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Starwood Hotels & Resorts Worldwide Inc. FY 2010

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%.

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Starwood Hotels & Resorts Worldwide Inc. FY 2010

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  1. StarwoodHotels & ResortsWorldwide Inc.FY 2010

  2. 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% 8% 7% 85% Rooms network as of end of year, 2010 Rooms pipelineas of end of year, 2010 (1) 103 -5% ~600 10% 4% 86% 1st Worldwide excluding the US 0% 101 507 56% 16% 28% 366Kr 85 0% 495 88% 7% 5% -24% 51 302 61% 20% 19% (1) Hilton geographical breakdown based on 2009 figures (2) Hilton pipeline based on an internal press release, January 2011 NB: Figures include traditional lodging and extended stay units but exclude timeshare products Starwood 7th global player in the hospitality business Starwood has the 6th pipeline worldwide, stable compared to 2009 Source : Companies annual reports except for Hilton network, Accor internal data

  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. 1. Company overview # rooms segment # hotels Revpar ADR OR Description Ownership • 7thglobal 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%) Financials Main figures Operating type Geographical breakdown APAC EMEA Americas Management O&L Timeshare Franchise Source: Reuters, as of March 7, 2011

  5. Full & limited service segment Extended stay segment Timeshare segment 2. Company organization

  6. 3. Brand positioning & strategy (1/2) 19 h. 76 h. High-end luxury Authentic Luxury Bespoke services Unique / Local Group of hotels 38 h. Trendsetter Design / Innovation Upper upscale 176 h. 100 h. Bus. & Leisure Comfort / Wellness Global standards Focus US market Bus. & Leisure Chic and cultured French heritage Focus European market Price segmentation Upscale 403 h. Bus. & Leisure Accessibility / Conviviality 158 h. Business Comfort / Functional 6 h. 45 h. Extended stay Eco-friendly Midscale Casual / Urban Suites Business Leisure “New Generation” niche Lifestyle segmentation Starwood – Company profile December 2010 Network figures as of end 2010

  7. 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 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 Thanks to a clear segmentation, Starwood brands have a clear positioning avoiding cannibalization and addressing different demands Sources: Starwoodwebsite and reports, Network figures as of end 2010

  8. 4. Geographical Breakdown Hotel and room network1,027 h. / 301,736 r.*(As of December 31, 2010) North America 538 h 169,191 r 56% Europe, Africa &Middle-East 247 h 61,348 r 20% Asia & Pacific 181 h 58,444 r 19% South America 61 h 12,753 r 4% Luxury Upper upscale Share ofglobalnetwork Upscale X% Midscale Starwood – Company profile September 2008 *Figures do not include vacation ownership Unbranded

  9. 5. Room portfolio

  10. Franchise Timeshare 6. Operating modeEvolution 2003- 2010 Global network per operating mode(In room number) Network 2000 738 h / 227,000 rooms Network 2010 1,041 h / 308,736 rooms +81,736 rooms +36% over 10 years Owned & Leased Management Sources: Starwood’s2003 & 2010 annual reports

  11. 6. Operating modePer brand, 2010 FY * Excluding unbranded hotels : 8 h. / 2,600 r. (100% owned) Source: Starwood’s FY results 2010

  12. 7. Group strategy Recent Group Strategy • +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) Network 2010 1,041 properties 308,736 rooms Network 2000 738 hotels 227,000 rooms 2011 Group Strategy Product innovation • Development of related products/services that enhance brand experience and differentiation and deliver attractive economics 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 • Increase the number of hotel management contracts and franchise agreement Earnings and cash-flow maximization Source: Starwood’s Q4 2010 earnings Call transcript

  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 Asset Light Strategy 1 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

  14. 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 7. Group strategyDevelopment Strategy Development 2 Americas Asia- Pacific • Hotels openings will represent both new built & conversion properties • Openings of 30 h. in 2010 North Am. : China : • 70 hotels in operation, 85 in the pipeline. In 2011, one in every three new Starwood hotels will open in China Latin Am. : • Openings of 6 hotels in 2011 • Westin to debut in Peru, Mexico and Panama in 2011 • Sheraton represents the largest portion of the Chinese pipeline with approximately 31 hotels. India : • Seven hotels to open in 2011 EMEA • 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 • Opening of 50 hotels in EMEA over the next three to five years, including 12 hotels in 2011. EMEA :

  15. 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 markets 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 7. Group strategyBrand strategy Brand Strategy 3

  16. EAME United States South America APAC 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) Pipeline breakdown in % of room total : Sources: Starwood’s 2010 annual report, Lodging Econometrics Q3 2010

  17. 9. Key figuresP&L evolution & forecasts In M$ Starwood – Company profile December 2010

  18. 10. SWOT analysis Strength Weaknesses • 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 • 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 Opportunities Threats • 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 • 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

  19. 11. Company history 2006 2005 2004 1999 1998 1997 1995 1991 1980 1969 - Launch of Element, a new brand on the extended stay segment - 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 - Launch of W Hotels, a new lifestyle brand - 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 - Incorporation of Starwood - Creation of Starwood Source: Datamonitor company profiles

  20. 12. Brands description Source: Starwood’s FY results 2010

  21. Starwood Brands PortfolioFrom midscale to luxury with clear lifestyle positioning 19 h. 76 h. High-end luxury Authentic Luxury Bespoke services Unique / Local Group of hotels 38 h. Trendsetter Design / Innovation Upper upscale 176 h. 100 h. Bus. & Leisure Comfort / Wellness Global standards Focus US market Bus. & Leisure Chic and cultured French heritage Focus European market Price segmentation Upscale 403 h. Bus. & Leisure Accessibility / Conviviality 158 h. Business Comfort / Functional 6 h. 45 h. Extended stay Eco-friendly Midscale Casual / Urban Suites Business Leisure “New Generation” niche Lifestyle segmentation Starwood – Company profile December 2010 Network figures as of end 2010

  22. St. Regis19 hotels / 3,860 rooms Network 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: mainlyMngt • 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) Strategy • 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 Starwood – Company profile December 2010

  23. The Luxury Collection76 hotels / 12,399 rooms Network Positioning • 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 • 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) Strategy • Limited pipeline vs. other brands • Development focused on China and ME • Comm’ emphasizing on a unique location and experience Starwood – Company profile December 2010

  24. W38 hotels / 11,206 rooms Network Positioning • 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 • 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 Strategy • Reach 50 hotels in 2-3 years • Internationalization with 95% of the pipeline out of the US • Comm’ emphasizing on the “cool” side Starwood – Company profile December 2010

  25. Westin176 hotels / 68,488 rooms Network Positioning • 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. • 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 Strategy • 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 Starwood – Company profile December 2010

  26. Le Méridien100 hotels / 26,678 rooms Network Positioning • 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 • 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 Strategy • 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) Starwood – Company profile December 2010

  27. Sheraton403 hotels / 140,382 rooms Network Positioning • 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 • 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 Strategy • 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 Starwood – Company profile December 2010

  28. Four Points by Sheraton (1/2)158 hotels / 27,391 rooms Network Positioning • 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 • 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 Strategy • 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 Starwood – Company profile December 2010

  29. 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. Sheraton H&R Starwood Ownership Upscale Midscale 1995 1998 2000 2010 2004 • 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 Affiliation to support brand performance & enable repositioning

  30. Alofta vision of W hotels45 hotels / 6,777 rooms Network Positioning • 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 • 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 Strategy • 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 Starwood – Company profile December 2010

  31. Elementby Westin9 hotels / 1,428 rooms Network Positioning • 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 • 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 Strategy • 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 Starwood – Company profile December 2010

  32. 13. Executive Officers Simon M. Turner President Hotel Group Mathew E. Avril President Hotel Group Vasant M. Prabhu Executive Vice President andChief Financial Officer Philip P. McAveety Executive Vice President andChief Brand Officer Jeffrey M. Cava Executive Vice President and Chief Human Resources Officer Keneth S. Siegel Chief Administrative Officer, General Counsel and Secretary Frits Van Paaschen CEO

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