North American Limited-Service Lodging includes Courtyard, Fairfield Inn & Suites, SpringHill Suites, Residence Inn, TownePlace Suites, and Marriott ExecuStay.

2011 Compared to 2010

In 2011, across our North American Limited-Service Lodging segment we added 68 properties (8,379 rooms) and 13 properties (1,432 rooms) left the system. The majority of the properties that left the system were older Residence Inn and Fairfield Inn properties.

In 2011, RevPAR for comparable company-operated North American Limited-Service properties increased by 6.7 percent to $76.86, occupancy for these properties increased by 2.4 percentage points to 69.7 percent, and average daily rates increased by 3.0 percent to $110.34.

The $84 million increase in segment results, compared to 2010, primarily reflected $50 million of higher franchise and base management fees, $12 million of higher owned, leased, corporate housing, and other revenue net of direct expenses, $12 million of lower general, administrative, and other expenses, and $11 million of decreased joint venture equity losses.

Higher franchise and base management fees primarily reflected higher RevPAR and new unit growth, as well as the favorable effect of property renovations.

The $12 million increase in owned, leased, corporate housing, and other revenue net of direct expenses primarily reflected $5 million of stronger results for owned and leased properties driven by higher RevPAR and property-level margins, $3 million of higher corporate housing revenue, net of expenses, and $2 million of higher termination fees.

The $12 million decrease in general, administrative, and other expenses primarily reflected a favorable variance from a $14 million long-lived asset impairment charge in 2010, partially offset by $2 million of other cost increases.

The $11 million decrease in joint venture equity losses primarily reflected $5 million of increased earnings in 2011 associated with two joint ventures primarily reflecting stronger property-level performance and a $5 million impairment charge recorded in 2010 associated with another joint venture.

Cost reimbursements revenue and expenses associated with our North American Limited-Service Lodging segment properties totaled $1,687 million in 2011, compared to $1,548 million in 2010.

2010 Compared to 2009

In 2010, across our North American Limited-Service Lodging segment, we added 103 properties (12,341 rooms) and 15 properties (1,556 rooms) left the system. The majority of the properties that left the system were Residence Inn properties of poor quality.

In 2010, RevPAR for comparable company-operated North American Limited-Service properties increased by 3.5 percent to $71.51, occupancy for these properties increased by 3.6 percentage points to 67.1 percent, and average daily rates decreased by 2.0 percent to $106.59.

The $33 million increase in segment results, compared to 2009, primarily reflected $33 million of higher base management and franchise fees, $8 million of lower general, administrative, and other expenses, and $2 million of higher incentive management fees, partially offset by $4 million of increased joint venture equity losses, $4 million of lower owned, leased, corporate housing, and other revenue net of direct expenses, and $2 million of lower gains and other income.

The $33 million of higher base management and franchise fees primarily reflected higher RevPAR and new unit growth. The $2 million increase in incentive management fees was due to higher property-level revenue and continued tight property-level cost controls favorably impacting house profit margins.

The $8 million decrease in general, administrative, and other expenses primarily reflected a favorable variance from a net $31 million impairment charge recorded in 2009 related to two security deposits that we deemed unrecoverable due, in part, to our decision not to fund certain cash flow shortfalls, partially offset by a $14 million long-lived asset impairment charge in 2010 and $9 million of other cost increases primarily driven by higher incentive compensation. See Footnote No. 7, “Property and Equipment,” of the Notes to our Financial Statements for more information on the impairment charge recorded in 2010.

The $4 million increase in joint venture equity losses primarily reflected an impairment charge associated with one joint venture. The $2 million decrease in gains and other income reflected the lack of dividends from one joint venture due to a decline in available cash flow.

The $4 million decrease in owned, leased, corporate housing, and other revenue net of direct expenses primarily reflected lower revenue and property-level margins associated with weaker demand at certain leased properties.

Cost reimbursements revenue and expenses associated with our North American Limited-Service Lodging segment properties totaled $1,548 million in 2010, compared to $1,419 million in 2009.

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