Hotels

Accor is the world's largest hotel and tourism group with more than 3,500 hotels and resorts in 90 countries, with the most comprehensive choice of hotel styles and locations. Accor's hotel brands include the luxury of Sofitel, business class of Novotel, variety of All Seasons, flexibility of Mercure, value of Ibis and convenience of Formule 1. Accor is also one of the global leaders in tourism, travel, casinos, restaurants and the provision of corporate and public institution services. Each day, more than 12 million people in 31 countries use a range of services created and managed by Accor. Accor Services is the Accor Group's second largest international line of business. The goal of Accor Services is to help companies and public institutions to improve performance by fostering the well-being of their employees and citizens. Present in 35 countries, more than 300,000 client companies or public institutions and 19 million employees uses our services everyday. In the Asia Pacific region, Accor is the largest and fastest growing hotel group with some 180 hotels and more than 30,000 rooms in 15 countries - Australia, New Zealand, New Caledonia, Cambodia, China, India, Indonesia, Japan, Korea, Laos, Malaysia, Myanmar, Singapore, Thailand and Vietnam. In Australia and New Zealand, there are over 100 hotels and resorts covering all prime business and holiday destinations with many new hotels to be opened over the next few years. Following is more information on Accor's hotel brands. Accor is also a leader in tourism services, with Blue Line Cruises offering charter cruises on Sydney Harbour, The Summit Restaurant providing one of the city's finest dining experiences, and the Sydney Convention and Exhibition Centre offering the largest and most technically advanced exhibitions and meeting venue in Australia. Sofitel Hotels and Resorts Sofitel is Accor's 5-star hotel brand offering 145 prestigious hotels and resorts in the world's most desired business, cultural and resort destinations. Distinctive flair is complemented by the highest levels of service, the most up-to-date technological services, the finest cuisine and a genuine feel for the authenticity of the destination. Sofitel is your rendezvous with the exceptional.

IHG is an international hotel company that always tries to see the world through the eyes of others. We have more guest rooms than any other hotel company in the world – that's 556,000 rooms in over 3,700 hotels across nearly 100 countries. Our guests make over 120 million stays in IHG hotels every year. We operate seven hotel brands – InterContinental, Crowne Plaza, Hotel Indigo, Holiday Inn, Holiday Inn Express, Staybridge Suites and Candlewood Suites. For an overview please Download our Group at a Glance factsheet (PDF 0.12Mb). Our goal We want to grow by making our brands the first choice for guests and hotel owners. Our target By the end of 2008, we're looking to increase the number of rooms we have by 50,000 to 60,000 on a net and organic basis. Our target growth will be organic – meaning that it will be achieved by our existing brands and not through acquisition – and it will be net – meaning that it will take into account the rooms that leave our system. Most of the rooms that leave our system do so at our instigation as we raise the quality of our hotels across all of our brands. Our strategy Our strategy is to build the hotel industry’s strongest operating system focused on the biggest markets and segments where scale really counts. Our operating system IHG’s operating system is made up of all the things we do to drive demand for our brands. This includes our advertising and marketing campaigns, our 13 global call centres, 12 local language websites, an 8,000-strong sales force, Priority Club Rewards – the world’s largest hotel loyalty scheme with over 31 million members – and all the advantages that IHG’s global hotel distribution and scale brings to brand awareness. Our focus on the biggest markets where our scale really counts ensures that we concentrate our resources on the opportunities that will provide the greatest return. Find out more about how we drive demand Our strategic priorities Improving the performance of our brands Using our insight to make our brands the first choice for guests Delivering consistent customer experiences Generating excellent returns from our hotels Improving hotel revenue by encouraging guest visits Improving the efficiency of our hotels and operating processes Putting our market scale and knowledge to good use Using our worldwide scale and experience to convert more hotels to our brands Making the most of our global presence – guests choose brands they know when they travel Strengthening our organisation Investing in our people and our ability to do business Building strong partnerships within our own company and with our owners across the world Our business model We operate hotels in three different ways – as a franchisor, a manager and on an owned and leased basis. Our business model focuses on managing and franchising hotels, whilst our business partners own the bricks and mortar. Franchising This is the largest part of our business: 3,158 hotels (85% of our portfolio) operate under franchise agreements. Managing We manage 498 hotels worldwide (14% of our portfolio). Owning We own 24 hotels worldwide (less than 1% of our portfolio). Brand Marketing and distribution Staff Ownership Capital IHG income Owned IHG IHG IHG IHG High All revenue Managed IHG IHG IHG supply general managers as a minimum Third party Low / none Fee % of total revenue plus % of profit Franchised IHG IHG Third party Third party None Fee % of rooms revenue Our hotel development pipeline IHG’s strategy is focused on increasing the number of franchised and managed hotels we have. Our hotel development pipeline is the industry’s largest, and is at a record high of more than 1,100 hotels (more than 140,000 rooms).

We are one of the world's largest hotel and leisure companies. We conduct our hotel and leisure business both directly and through our subsidiaries. Our brand names include the following: Sheraton Hotels & Resorts (luxury and upscale full-service hotels and resorts) is the Company's largest brand serving the needs of upscale business and leisure travelers worldwide. We offer the entire spectrum of comfort. From full-service hotels in major cities to luxurious resorts by the water, Sheraton can be found in the most sought-after cities and resort destinations around the world. Every guest at Sheraton hotels and resorts feels a warm and welcoming connection, the feeling you have when you walk into a place and your favorite song is playing - a sense of comfort and belonging. At Sheraton, we help our guests connect to what matters most to them, the office, home and the best spots in town. Westin Hotels & Resorts (luxury and upscale full-service hotels and resorts) are destinations where guests are understood and feel that this is a place where "I can be at my best." When guests arrive, they feel the Westin ambience and are welcomed by "hosts" who help them get the most out of their stay. Westin's General Managers have inspired all associates to instinctively and thoughtfully respond to guests' needs on a personal level. Westin's customized renewal experiences energize guests' minds, bodies and spirits, making each guest's stay especially memorable. Guests leave Westin Hotels & Resorts rested, energized, enriched and renewed, feeling much better than they did when they arrived. W Hotels (luxury and upscale full service hotels, retreats and residences). W branded properties feature world class design, world class restaurants and "on trend" bars and lounges and its signature Whatever\Whenever service standard. It's a sensory multiplex that not only indulges the senses, it delivers an emotional experience. Whether it's "behind the scenes" access at Whappenings, or our cutting edge music, lighting and scent programs, W delivers an experience unmatched in the hotel segment. St. Regis Hotels & Resorts (luxury full-service hotels, resorts and residences) are for connoisseurs who desire the finest expressions of luxury. They provide flawless and bespoke service to high-end leisure and business travelers. St. Regis hotels are located in the ultimate locations within the world's most desired destinations, important emerging markets and yet to be discovered paradises, and they typically have individual design characteristics to capture the distinctive personality of each location. The Luxury Collection (luxury full-service hotels and resorts) is a group of unique hotels and resorts offering exceptional service to an elite clientele. From legendary palaces and remote retreats to timeless modern classics, these remarkable hotels and resorts enable the most discerning traveler to collect a world of unique, authentic and enriching experiences that capture the sense of both luxury and place. They are distinguished by magnificent decor, spectacular settings and impeccable service. Le Méridien (luxury and upscale full-service hotels and resorts) is a European brand with a French accent. Each of its hotels, whether city, airport or resort has a distinctive character driven by its individuality and the Le Méridien brand values. With its underlying passion for food, art and style and its classic yet stylish design, Le Méridien offers a unique experience at some of the world's top travel destinations. Four Points by Sheraton (moderately priced select-service hotels) delights the self-sufficient traveler with a new kind of comfort, approachable style and spirited, can-do service - all at the honest value our guests deserve. Our guests start their day feeling energized and finish up relaxed and free to enjoy little indulgences that make their time away from home special. aloft (moderately priced select-service hotels), a brand introduced in 2005 with the first hotel expected to open in 2007, is a hotel of new heights, an oasis where you least expect it, a spirited neighborhood outpost, a haven at the side of the road. Bringing a cozy harmony of modern elements to the classic American on-the-road tradition, aloft offers a sassy, refreshing, ultra effortless alternative for both the business and leisure traveler. Fresh, fun, and fulfilling, aloft is an experience to be discovered and rediscovered, destination after destination, as you ease on down the road. Starwood Vacation Ownership Vacation ownership with the integrity of the industry's most renowned brands, the appeal of world-class resorts and the flexibility to go where you want when you want. Through our brands, we are well represented in most major markets around the world. Our operations are grouped into two business segments, hotels and vacation ownership and residential operations. Our revenue and earnings are derived primarily from hotel operations, which include the operation of our owned hotels; management and other fees earned from hotels we manage pursuant to management contracts; and the receipt of franchise and other fees. Our hotel business emphasizes the global operation of hotels and resorts primarily in the luxury and upscale segment of the lodging industry. We seek to acquire interests in, or management or franchise rights with respect to properties in this segment. At December 31, 2005, our hotel portfolio included owned, leased, managed and franchised hotels totaling 845 hotels with approximately 258,000 rooms in approximately 100 countries, and is comprised of 130 hotels that we own or lease or in which we have a majority equity interest, 378 hotels managed by us on behalf of third-party owners (including entities in which we have a minority equity interest) and 337 hotels for which we receive franchise fees. Our revenues and earnings are also derived from the development, ownership and operation of vacation ownership resorts, marketing and selling vacation ownership interests ("VOIs") in the resorts and providing financing to customers who purchase such interests. Generally these resorts are marketed under the brand names described above. At December 31, 2005, we had 19 vacation ownership resorts and residential properties in the United States, Mexico and the Bahamas. Additionally, our revenues and earnings are derived from the development, marketing and selling of residential units at mixed use hotel projects owned by us as well as fees earned from the marketing and selling of residential units at mixed use hotel projects developed by third-party owners of hotels operated under our brands. The Trust was organized in 1969, and the Corporation was incorporated in 1980, both under the laws of Maryland. Sheraton Hotels & Resorts and Westin Hotels & Resorts, Starwood's largest brands, have been serving guests for more than 60 years. Starwood Vacation Ownership (and its predecessor, Vistana, Inc.) has been selling VOIs for more than 20 years. Our principal executive offices are located at 1111 Westchester Avenue, White Plains, New York 10604, and our telephone number is (914) 640-8100. For a discussion of our revenues, profits, assets and geographical segments, see the notes to financial statements of this Joint Annual Report. For additional information concerning our business, see Item 2. Properties, of this Joint Annual Report. Competitive Strengths Management believes that the following factors contribute to our position as a leader in the lodging and vacation ownership industry and provide a foundation for the Company's business strategy: Brand Strength. We have assumed a leadership position in markets worldwide based on our superior global distribution, coupled with strong brands and brand recognition. Our upscale and luxury brands continue to capture market share from our competitors by aggressively cultivating new customers while maintaining loyalty among the world's most active travelers. The strength of our brands is evidenced, in part, by the superior ratings received from our hotel guests and from industry publications. In 2005 we had 35 of our hotels on the Condé Nast Traveler's 2005 Readers Choice Awards List, including three hotels on their "Top 100 Best Hotels in the World." Frequent Guest Program. Our loyalty program, Starwood Preferred Guest® ("SPG"), has over 27 million members and since its inception in 1999, has been awarded the Hotel Program of the Year six times by consumers via the prestigious Freddie Awards. SPG has also received top honors for awards for Best Customer Service, Best Elite-Level Program, Best Award and Best Redemption. SPG, which was the first loyalty program in the hotel industry with a policy of no blackout dates and no capacity controls, enables members to redeem stays when they want and where they want. SPG yields repeat guest business primarily by rewarding customers with points towards free hotel stays and other rewards, or airline miles with any of the participating 33 airline programs. Significant Presence in Top Markets. Our luxury and upscale hotel and resort assets are well positioned throughout the world. These assets are primarily located in major cities and resort areas that management believes have historically demonstrated a strong breadth, depth and growing demand for luxury and upscale hotels and resorts, in which the supply of sites suitable for hotel development has been limited and in which development of such sites is relatively expensive. Premier and Distinctive Properties. We control a distinguished and diversified group of hotel properties throughout the world, including the St. Regis in New York, New York; The Phoenician in Scottsdale, Arizona; the Hotel Gritti Palace in Venice, Italy; the St. Regis in Beijing, China; and the Westin Palace in Madrid, Spain. These are among the leading hotels in the industry and are at the forefront of providing the highest quality and service. Our properties are consistently recognized as the best of the best by readers of Condé Nast Traveler, who are among the world's most sophisticated and discerning group of travelers. The January 2006 issue of the Condé Nast Traveler Magazine included 45 Starwood properties among its prestigious Gold List and Gold List Reserve, including the Sheraton Laguna in the Best by Design category. Scale. As one of the largest hotel and leisure companies focusing on the luxury and upscale full-service lodging market, we have the scale to support our core marketing and reservation functions. We also believe that our scale will contribute to lower our cost of operations through purchasing economies areas such as insurance, energy, telecommunications, technology, employee benefits, food and beverage, furniture, fixtures and equipment and operating supplies. Diversification of Cash Flow and Assets. Management believes that the diversity of our brands, market segments served, revenue sources and geographic locations provides a broad base from which to enhance revenue and profits and to strengthen our global brands. This diversity limits our exposure to any particular lodging or vacation ownership asset, brand or geographic region. While we focus on the luxury and upscale portion of the full-service lodging, vacation ownership and residential markets, our brands cater to a diverse group of sub-markets within this market. For example, the St. Regis hotels cater to high-end hotel and resort clientele while Four Points by Sheraton hotels deliver extensive amenities and services at more affordable rates. The newly announced aloft brand will provide a youthful alternative to the "commodity lodging" of currently existing brands in the select-service market segment. We derive our cash flow from multiple sources within our hotel and vacation ownership and residential segments, including owned hotels activity and management and franchise fees, and are geographically diverse with operations around the world. The following tables reflect our hotel and vacation ownership and residential properties by type of revenue source and geographical presence by major geographic area as of December 31, 2005: Number of Properties Rooms Owned Hotels(a) 130 47,000 Managed and unconsolidated joint venture hotels 378 121,000 Franchised hotels 337 90,000 Vacation ownership resorts 19 6,000 Total properties 864 264,000 (a) Includes wholly owned, majority owned and leased hotels. Number of Properties Rooms North America 431 149,000 Europe, Africa and the Middle East 259 64,000 Latin America 55 12,000 Asia Pacific 119 39,000 Total 864 264,000 Business Segment and Geographical Information Incorporated by reference in Note 23. Business Segment and Geographical Information, in the notes to financial statements set forth in Part II, Item 8. Financial Statements and Supplementary Data. Business Strategy We recently announced a strategy of reducing our investment in owned real estate and increasing our focus on the management and franchise business. In furtherance of this strategy, we have sold and entered into agreements to sell hotels, including the agreement to sell 38 properties to Host Marriott Corporation ("Host" or "Host Marriott") for approximately $4.1 billion (based on the closing price of Host's stock immediately prior to the announcement of the transaction). As a result, our primary business objective is to maximize earnings and cash flow by increasing the number of our hotel management contracts and franchise agreements; acquiring and developing vacation ownership resorts and selling VOIs; and holding real estate assets where there is a strategic rationale for doing so which may include selectively acquiring interests in additional assets and disposing of non-core hotels (including hotels where the return on invested capital is not adequate) and "trophy" assets that may be sold at significant premiums. We plan to meet these objectives by leveraging our global assets, broad customer base and other resources and by taking advantage of our scale to reduce costs. The uncertainty relating to political and economic environments around the world and their consequent impact on travel in their respective regions and the rest of the world, make financial planning and implementation of our strategy more challenging. Growth Opportunities. Management has identified several growth opportunities with a goal of enhancing our operating performance and profitability, including Continuing to build our brands to appeal to upscale business travelers and other customers seeking full-service hotels in major markets by establishing emotional connections to our brands by offering signature experiences at our properties such as by placing Bliss® Spas, Remede SM Spas and their branded amenities and upscale restaurants in certain of our branded hotels and by continuing our tradition of innovation started with the Heavenly Bed® and Heavenly Bath, the Sheraton Sweet Sleeper SM Bed, the Sheraton Service Promise SM and the Four Points by Sheraton Four Comfort Bed SM and with such ideas as Westin being the first major brand to go "smoke-free" in North America; Renovating, upgrading and expanding our branded hotels to further our strategy of strengthening brand identity; Continuing to expand our role as a third-party manager of hotels and resorts. This allows us to expand the presence of our lodging brands and gain additional cash flow generally with modest capital commitment; Franchising the Sheraton, Westin, Four Points by Sheraton, Luxury Collection, Le Méridien and aloft brands to selected third-party operators and licensing the Sheraton, Westin, W and St. Regis brand names to selected third parties in connection with luxury residential condominiums, thereby expanding our market presence, enhancing the exposure of our hotel brands and providing additional income through franchise and license fees; Expanding our internet presence and sales capabilities to increase revenue and improve customer service; Continuing to grow our frequent guest program, thereby increasing occupancy rates while providing our customers with benefits based upon loyalty to our hotels and vacation ownership resorts; Enhancing our marketing efforts by integrating our proprietary customer databases, so as to sell additional products and services to existing customers, improve occupancy rates and create additional marketing opportunities; Optimizing use of our real estate assets to improve ancillary revenue, such as residential sales and restaurant, beverage and parking revenue from our hotels and resorts; Establishing relationships with third parties to enable us to provide attractive restaurants and other amenities at our branded properties; Developing additional vacation ownership resorts and leveraging our hotel real estate assets where possible through VOI construction and residential sales; Leveraging the Bliss and Remede product lines and distribution channels; and Increasing operating efficiencies through increased use of technology. We intend to explore opportunities to expand and diversify our hotel portfolio through internal development, minority investments and selective acquisitions of properties domestically and internationally that meet some or all of the following criteria: Luxury and upscale hotels and resorts in major metropolitan areas and business centers; Development of an "extended stay" product by Westin; Hotels or brands which would enable us to provide a wider range of amenities and services to customers or provide attractive geographic distribution; Major tourist hotels, destination resorts or conference centers that have favorable demographic trends and are located in markets with significant barriers to entry or with major room demand generators such as office or retail complexes, airports, tourist attractions or universities; Undervalued hotels whose performance can be increased by re-branding to one of our hotel brands, the introduction of better and more efficient management techniques and practices and/or the injection of capital for renovating, expanding or repositioning the property; and Portfolios of hotels or hotel companies that exhibit some or all of the criteria listed above, where the purchase of several hotels in one transaction enables us to obtain favorable pricing or obtain attractive assets that would otherwise not be available or realize cost reductions on operating the hotels by incorporating them into the Starwood system. We may also selectively choose to develop and construct desirable hotels and resorts to help us meet our strategic goals, such as the St. Regis Museum Tower Hotel in San Francisco, California which opened in November 2005 with 260 hotel rooms and 102 residential condominiums, and we are building a Sheraton prototype in Rockville, Maryland. Furthermore, we have developed plans along with third party developers for flexible new-build Sheraton and Westin prototypes, with the intent of expanding these brands into tertiary markets. Competition The hotel industry is highly competitive. Competition is generally based on quality and consistency of room, restaurant and meeting facilities and services, attractiveness of locations, availability of a global distribution system, price, the ability to earn and redeem loyalty program points and other factors. Management believes that we compete favorably in these areas. Our properties compete with other hotels and resorts in their geographic markets, including facilities owned by local interests and facilities owned by national and international chains. Our principal competitors include other hotel operating companies, ownership companies (including hotel REITs) and national and international hotel brands. We encounter strong competition as a hotel, residential, resort and vacation ownership operator and developer. While some of our competitors are private management firms, several are large national and international chains that own and operate their own hotels, as well as manage hotels for third-party owners and develop and sell VOIs, under a variety of brands that compete directly with our brands. In addition, hotel management contracts are typically long-term arrangements, but most allow the hotel owner to replace the management firm if certain financial or performance criteria are not met. Our timeshare and residential business depends on our ability to obtain land for development of our timeshare and residential products and to utilize land already owned by us but used in hotel operations. Changes in the general availability of suitable land or the cost of acquiring such land could adversely impact the profitability of our timeshare and residential business. Employees At December 31, 2005, we employed approximately 145,000 employees at our corporate offices, owned and managed hotels and vacation ownership resorts, of whom approximately 46% were employed in the United States. At December 31, 2005, approximately 31% of the U.S.-based employees were covered by various collective bargaining agreements providing, generally, for basic pay rates, working hours, other conditions of employment and orderly settlement of labor disputes. Generally, labor relations have been maintained in a normal and satisfactory manner, and management believes that our employee relations are good

There are 215 Hyatt branded hotels and resorts (over 90,000 rooms) in 43 countries around the world, operating under the Hyatt®, Hyatt Regency®, Grand Hyatt® and Park Hyatt® brands. Currently, there are an additional 49 Hyatt hotels and resorts under development, including 15 new hotels in China. Hyatt Corporation (domestic U.S., Canada and Caribbean hotels) and Hyatt International Corporation (international properties) are subsidiaries of Chicago-based Global Hyatt Corporation. Global Hyatt Corporation is also the owner of Hyatt Vacation Ownership, Inc. operators of the Hyatt Vacation Club (timeshare and fractional residential product), Hyatt Equities, L.L.C. (hotel ownership), Select Hotel Group L.L.C. (which owns, operates and franchises AmeriSuites hotels, Hyatt Place and Hyatt Summerfield Suites hotels) and U.S. Franchise Systems, Inc. (which franchises Hawthorn Suites, and Microtel Inns and Suites).

Sol Meliá is the Spanish hotel and resort chain founded by Gabriel Escarrer Juliá in 1956 in Palma on the Mediterranean island of Mallorca in Spain. It is the leading Spanish hotel chain in both the city and resort markets, the third largest hotel chain in Europe, and the twelfth largest hotel chain in the world. Sol Meliá is also the world leader in resort hotels and number one in the ranking in Latin America and the Caribbean. The company provides almost 350 hotels with 85,000 rooms in 30 countries on 4 continents. The company operates hotels under the Meliá Hotels & Resorts, ME by Meliá, TRYP Hotels, Sol Hotels, Paradisus Resorts and Sol Meliá Vacation Club brands, each of which has been designed to satisfy the needs of the most discerning customers seeking both an excellent location and superior quality, personalised service. The different Sol Meliá hotel brands offer a great choice of products for visitors both for business and for leisure travel. Activity programmes in the hotel or in the surrounding area; programmes focused on health and beauty; programmes for kids, for adults, or for the whole family; programmes for the active and energetic, or for those seeking rest and relaxation. Sol Meliá is constantly developing new products and services to anticipate the needs of its guests and to enrich the hotel experience. At Sol Meliá, great food and beverage is one of the keys to such prolonged success, always with a focus on the culture and character of the destination and featuring theme corners, regional specialities, kids menus, and health foods, amongst others. Hotel restaurants are famous for their selection of the freshest ingredients and careful preparation and presentation. The company Research & Development Kitchens are constantly at work on the creation of new menus, the adaptation of recipes, and the training of our chefs. With more than 50 years experience in the hotel industry, Sol Meliá is also a major owner of real estate and has an active asset management business focused on the disposal of non-strategic assets, the purchase of high-yield assets and the maximisation of profitability of existing assets.

Explore your own private winter wonderland at the Bavarian-inspired town of Vail, Colorado. With its famous Covered Bridge and cobblestone streets, Vail is a mecca for travelers dreaming of fresh-powder days, exquisite boutiques and worldly restaurants. Vail’s sister mountain, Beaver Creek, offers an experience just as cozy and magical. Known as the locals’ mountain, visitors are invited to treat themselves to a glass of wine for après-ski or lace up their ice skates for a turn around the rink in the center of Market Square. Whether you’re seeking unparallel shopping, local culture or fine dining, Vail and Beaver Creek are sure to please your appetite.