August 2008

Thomas Weisel PartnersCommonwealth Business Travel Group

2

Executive Summary The demand picture is bad and not getting better in the short term Supply outlook is mixed with hotels building & airlines cutting Travelers are still moving online & GDS going through ownership

changes

Demand Outlook

4

Demand has softened and estimates look aggressive1. Year-to-date demand -0.3% & June -2.1%. Estimate for 2008 +1%????

• On track for -1% and each point of demand = $1.1bn in revenue• Air capacity cuts could hit demand by up to 10mn annual room nights, or another point

Traling 12-Month Occupancy & Change in Room Night Demand

55%

57%

59%

61%

63%

65%

D-00 J-01 D-01 J-02 D-02 J-03 D-03 J-04 D-04 J-05 D-05 J-06 D-06 J-07 D-07 J-08

-5%

0%

5%Occupancy Demand

Sources: Smith Travel Research

Lodging Industry Demand Picture

5

Pricing power may be the next to go1. Rates up 4% so far this year and 3% in June. Not Sustainable!!!

• See cuts at annualized occupancy rate of <62%. Peaked at 64%, at 63% now• Get there in 3 months at current rate of decline• Estimates call for >4% growth in 2008, but we see back half at low single digits and possibly negative in

4Q • Each point of rate = $1.1bn in revenue

Traling 12-Month ADR & Change

$80

$85

$90

$95

$100

$105

D-00 J-01 D-01 J-02 D-02 J-03 D-03 J-04 D-04 J-05 D-05 J-06 D-06 J-07 D-07 J-08

-5%

0%

5%

10%ADR Growth

Sources: Smith Travel Research

Lodging Industry Demand Picture

6

Even with downturn, still financially sound1. Estimates: Revenue $140-145bn, Operating Profit $25-28bn

• Unlike airlines, still profitable with >$4bn in net income• Break-even occupancy ~50% have never seen it that low

Industry Revenue & Operating Profit ($ in billions)

$0

$25

$50

$75

$100

$125

$150

2006 2007 2008E 2009E

Revenue Profit

Sources: Smith Travel Research and Thomas Weisel Partners LLC estimates

Lodging Industry Demand Picture

7

Airlines struggling with weak demand too 1. Demand down -0.3% year-to-date & -3.3% in April

• Data for May-June suggests trend has gotten worse

Traling 12-Month Load & Change in Passenger Enplanements

65%

70%

75%

80%

D-00 J-01 D-01 J-02 D-02 J-03 D-03 J-04 D-04 J-05 D-05 J-06 D-06 J-07 D-07

-15%

-10%

-5%

0%

5%

10%

15%Load Demand

Sources: Smith Travel Research

Airline Industry Demand Picture

8

Offsetting weaker demand with fewer flights1. Number of domestic flights cut 2.3% in 1Q 2008

• Load stabilizing at ~80% with recent capacity cuts

2. Aggressive pricing could be a demand-side issue• New fees could cost travelers billions• Fully loaded prices up >12% in 2Q 2008 (according to Expedia)

Change in Available Seat Miles

-2.5%

-1.0%

0.5%

2.0%

3.5%

7-Jan 7-Apr 7-Jul 7-Oct 8-Jan 8-Apr

Sources: Bureau of Transportation Statistics

Airline Industry Demand Picture

9

Airline Industry Demand Picture Massive restructuring coming

1. Demand is an issue, but real problem is cost structure• Fuel cost has spiked +69% year-to-date, up from 30% of rev in 2006 to >40%• Profit of $5.8bn in 2007, but 2009 losses of $7-13bn on spike in jet fuel

2. Cut flights and boost prices• Plan to cut capacity by 15-20%, boost prices by 20%+ (with all of the new fees) • Hard to assess ripple effect

Supply Outlook

11

Net New Hotel Rooms (in 000s)

Sources: PricewaterhouseCoopers, Smith Travel Research and Thomas Weisel Partners

Hotel Industry Supply

Hotel construction near historical peak • Supply growth forecast at 2.4% in 2008 and 2009• Look for 105-110,000 new rooms in 2008 and 110-115,000 in 2009• Construction by tier: Midscale w/o F&B 30%, Upscale 25%, Upper Upscale 11%

0

50

100

150

200

1968 1973 1978 1983 1988 1993 1998 2003

12

There is >$75bn in announced gaming development• Amounts to 30-35% increase in gaming capacity, 5-year CAGR of >5%• Building concentrated in Vegas & Macau• Not all will get built, but still a massive increase

Announced Project Budgets ($ in billions)

Sources: Company reports and Thomas Weisel Partners LLC estimates

Gaming Industry Supply

$38

$25

$12$10

$0

$10

$20

$30

$40

$50

Las Vegas International Regions Atlantic City

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Airline Industry Supply Cutting flights in bid to stay viable

• Major announced cuts totaling >15% of domestic capacity• Cuts weighted to 4Q 2008 and beyond

Change in Available Seat Miles

Sources: Air Transportation Association

-15.0%

-10.0%

-5.0%

0.0%

1Q08 2Q08 3Q08 4Q08 1Q09

Distribution Landscape

15

eTravel Penetration Rate

Sources: Phocuswright, eyefortravel and Thomas Weisel Partners LLC estimates

eTravel Evolving

Online travel $240-250bn industry, growing 2-3x industry pace• Market: US $135-140bn, Europe $75-80bn, Asia Pac $30bn• Global penetration 30-35%: US 50-55%, Europe 35-40%, Asia Pac 15%

• Corporate travel: managed 35-40%

• Forecast 5-yr CAGR of 20% with penetration ramping to 60% by 2012

0%

20%

40%

60%

80%

100%

2006 2007 2008E 2009E 2010E 2011E 2012E

Online Offline

16

Travel Industry Revenue Comparisons ($ in billions)

Sources: Bureau of Transportation Statistics, Smith Travel Research, Auto Rental News, Cruise Line Industry Association & Company Reports

GDS Landscape

Look for further consolidation to survive airline squeeze1. Still fat: Revenue $8-8.5bn, EBITDA $1.5-2bn

• Fees down 30% since 2003 in two rounds: 2003 $4.39 to $3.85, 2006 $3.85 to $3.10. Deals expire mid-2011• Who suffered? GDSs cut agency incentives by ~$500mn, with most from smaller offline agents

2. Look for more changes in next two years• Blackstone owns Travelport (Galileo + Worldspan). Texas Pacific owns Sabre, BC Partners/Cenven own Amadeus• Private equity strategy: Consolidate, cut costs and sell or IPO. Sabre + Amadeus???• Clock ticking: Airline deals expire mid-2011

$0

$25

$50

$75

$100

Hotel Air Car Cruise GDS

$8.3bn