Financial Information

PART II

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Asia Pacific

2019 Compared to 2018

In 2019, across our Asia Pacific segment we added 78 properties (17,361 rooms) and 8 properties (2,328 rooms) left our system.

Asia Pacific segment profits decreased by $87 million, primarily due to the following changes:

• $69 million of lower gains and other income, net, primarily due to a $57 million gain on 2018 property sales and a $13 million gain on sale of our interest in two equity method investments in 2018; and
   
  
• $9 million of lower cost reimbursement revenue, net of reimbursed expenses.

2018 Compared to 2017

In 2018, across our Asia Pacific segment we added 82 properties (19,661 rooms) and 11 properties (3,399 rooms) left our system.

Asia Pacific segment profits increased by $95 million, primarily due to the following:

• $71 million of higher gains and other income, net, primarily reflecting a $57 million gain on 2018 property sales and $13 million from gains on sale of our interest in two equity method investments;
   
  
• $26 million of higher base management and franchise fees, primarily reflecting $16 million from unit growth; and
   
  
• $22 million of higher incentive management fees, primarily driven by net higher profits at managed hotels;

partially offset by:

• $29 million of lower cost reimbursement revenue, net of reimbursed expenses.