GHN BRAND TALK Home2 Suites by Hilton

GlobalHotelNetwork.com: When was your brand introduced into the industry?

Bill Duncan: Home2 Suites holds the distinction of being the first new brand to be launched by Hilton Worldwide in the last 20 years. The brand was officially announced in January 2009 at a special media and developer event prior to the kick-off of the 8th Annual Americas Lodging Investment Summit (ALIS) in San Diego, California. The inaugural Home2 Suites hotel opened in Fayetteville, N.C. on February 3, 2011.

GlobalHotelNetwork.com: What is the significance of your brand's name? How did the name come about?

Bill Duncan: When we were brainstorming potential brand names, we wanted something that would make guests feel comfortable, always welcome and have an innate sense of familiarity even on a first visit. We loved Home2 upon hearing it, and several rounds of consumer testing confirmed that it was the right decision. Respondents during the testing remarked that the name made them think of the property as their home away from home, which is exactly the feeling we wanted to invoke.

GlobalHotelNetwork.com: At which segment of the market does your brand compete? Who is in your competitive set?

Bill Duncan: Home2 Suites operates in the mid-tier extended stay segment, targeting business travelers and leisure travelers. The competitive set for Home2 Suites includes Candlewood Suites, TownePlace Suites, SpringHill Suites, Comfort Suites and Holiday Inn Express.

GlobalHotelNetwork.com: Describe your brand's prototype:

Bill Duncan: The Home2 Suites prototype was developed to be cost-effective to build and operate, occupy less than two acres, with total property square footage measuring approximately

Copyright (c) 2012 Global Hospitality Resources®, Inc., San Diego, CA USA All rights reserved. 1

Bill DuncanGlobal Head Home2 Suites

56,000 square feet, and able to build in less than one year. Key aspects of the Home2 Suites prototype include a four-story wood frame construction, 107-suites, with studios taking up 323 square feet and one-bedroom suites starting at 490 square feet, and a minimum of 4,200 square feet of community space. The prototype can be adapted by developers to meet local needs and requirements.

GlobalHotelNetwork.com: Describe Home2 Suites’s amenities:

Bill Duncan: Home2 Suites offers guests a wide variety of amenities spanning from the outdoor areas, to the common areas and into the guest rooms. A few examples of each include:

Common areas:

• The Oasis is an expanded community space that provides common areas for social gathering as well as communal and individual work and meeting zones.

• The Go2Spot, an iconic seating piece, is the focal feature and community hub within the Oasis. It provides guests a variety of options for meeting up with friends, sharing a meal or catching up on work.

• Our Inspired breakfast offers a wide variety of continental and customizable breakfast items served each morning, including a select hot breakfast sandwich (Sunny Side Sandwich), cereal, yogurt, oatmeal , a variety of bakery products, and lots of toppings to make it your own. Coffee and tea are served throughout the day.

• Spin2 Cycle provides an integrated fitness and laundry room, allowing guests to do their laundry while they work out.

• The Home2 MKT is an open retail area available for guests to purchase food, drinks, and other essentials they may nee

• The Business Services Area, open 24/7, offers dual workstations with wireless and wired high-speed internet access as well as free printing through PrinterOn® technology.

Guestrooms

• Proprietary working wall runs the length of the room and includes: a kitchen, working area, 42” TV, counter space, drawers, shelves, and closet.

Copyright (c) 2012 Global Hospitality Resources®, Inc., San Diego, CA USA All rights reserved. 2

• The media/working zone includes a full size sofa/sleeper, roll-around ottoman, ambient and task lighting, alarm clock with iPod port and MP3 jack, and various pieces of furniture which can be moved around to create customized living spaces and adjustable storage options.

• Guest rooms also come equipped with complimentary high speed internet access. Outdoor amenities:

• Home2 properties feature saline-based pools, maintained with natural chemicals.

• The outdoor Lounge offers a comfortable area for guests to relax and unwind or grill out on one of our gas grills.

• One way for our guests to maintain their exercise program is by using our outdoor walking trail, which is incorporated into the design of our hotels.

A key feature of Home2 Suites that is emphasized in each property is sustainability, which has been incorporated through the use of recycled floors and carpet tiles, recycling centers, bulk bath amenities, dual flush toilets, Energy Star appliances and more. Additionally, all Home2 Suites are pet friendly, and many feature an outdoor green area for pets.

All Home2 Suites offer guests a satisfaction guarantee, which promises an engaging experience and clean, comfortable accommodations. If a guest is not completely satisfied, Home2 will do everything in its power to remedy the situation or the stay is free.

GlobalHotelNetwork.com: Will growth be principally by new build or conversion also? If conversion, which competing brands most naturally convert to your prototype?

Bill Duncan: Home2 Suites portfolio will mainly consist of new builds; however, the brand does lend itself to be easily adapted to be conversions of other hotels or commercial buildings. For example, our properties in the urban neighborhoods of downtown Baltimore and San Antonio are “adaptive reuse” projects, which are breathing new life into local landmark buildings to create the latest hip and humble hotels.

The Baltimore Home2 Suites was built inside a 13-story high-rise, which was previously used as another extended-stay hotel, and before that, a residential apartment building. The hotel is located in downtown Baltimore and opened in June 2011.

The San Antonio Home2 Suites was built inside the South Texas Building, also known historically as the Central Trust Company Building. The 12-story hotel is a Beaux Arts Style

Copyright (c) 2012 Global Hospitality Resources®, Inc., San Diego, CA USA All rights reserved. 3

commercial/office building that was opened in 1919 as the Central Trust company building. The building is significant because of its uncommon style and its association with Sanguinet and Staats – one of Texas’ most prestigious, early twentieth century architectural firms. It is also on the National Register of Historic Places. The hotel opened in October 2011.

GlobalHotelNetwork.com: How many hotels are currently in your brand's system and where are your properties geographically concentrated? Please tell us about your development pipeline for 2012-2014.

Bill Duncan: Home2 Suites currently has seven properties open in the United States in Fayetteville, North Carolina; Layton, Utah; Baltimore, Maryland; San Antonio, Texas; West Valley City, Utah; North Charleston, South Carolina; and Lexington Park, Maryland. There are eight Home2 Suites under construction, and the brand more than 60 properties in the development pipeline.

GlobalHotelNetwork.com: Geographically, where would you like to grow? Domestically? Internationally?

Bill Duncan: Home2 Suites is the fastest growing new hotel brand based on the June 2011 STR numbers, with 100 percent of that growth taking place within the U.S. Our first priority is to grow within North America, and we are always looking for skilled hotel owners and developers to grow the brand through new construction and conversions, as well as identifying key locations that are ideal for an extended-stay hotel. Future properties are slated for many of the nation’s major markets, including Houston, Atlanta, Washington, D.C., Philadelphia and Denver. The brand just signed its first deal in Canada, and Home2 Suites is also approved for expansion into Mexico.

GlobalHotelNetwork.com: What are the franchise costs associated with your brand?

Bill Duncan: Home2 Suites is a value-wise, cost-effective extended-stay option for franchisees, with the current fees for 2012 as follows:

• Initial Fee = $50,000, regardless of room count• Royalty Fee = All applications that are received in 2011: Year 1 = 3%, Year 2 = 4%, and

5% thereafter. • Brand program fee = 3%, which is lower than standard for other Hilton Family brands.• Per key costs = $75,000 approximately, excluding land costs and FF&E

Copyright (c) 2012 Global Hospitality Resources®, Inc., San Diego, CA USA All rights reserved. 4

GlobalHotelNetwork.com: Closing comments. Why your brand?

Bill Duncan: Home2 Suites concept is a fresh, modern addition to the Hilton Worldwide portfolio, and a game changer in the mid-tier extended-stay segment. Home2 Suites is designed to meet the needs of younger travelers, and is a more affordable option for guests seeking extended-stay accommodations. The Home2 Suites brand offers guests the opportunity to create their own experience in a comfortable, flexible environment, and, so far, has been received with open arms by guests.

For franchisees, Home2 Suites offers the opportunity to break into a burgeoning market with a product that is cost effective and efficient to build, operate and maintain. Home2 Suites was founded on a drive to break out of the “me too” sameness of the extended-stay market, and we look forward to continuing to develop and expand this unique offering domestically and internationally. The first hotel in Fayetteville surpassed a 100% occupancy index during opening week, and the rate remains high today.

GlobalHotelNetwork.com: How does Home2 Suites engage in community relations?

Bill Duncan: To coincide with the official launch of Home2 Suites in early 2011, a brand-wide community relations concept was developed called “Your2 Hands.” The Your2 Hands initiative connects Home2 Suites hotels with hometown charities to help support local communities and put into action the brand’s commitment to giving back. The program’s objective is to honor and reward individuals and nonprofit organizations by having each Home2 Suites hotel recognize how someone’s “two hands” are improving their hometown. The brand-wide community outreach campaign is a commitment from Home2 to give back to the neighborhoods where it puts down roots. Hotel team members join forces with a local nonprofit through on-site events to make a difference outside of hotel walls, engaging members of the community and guests, to make the biggest impact possible.

About Bill Duncan

Bill Duncan is the global head of brand management for Homewood Suites by Hilton and Home2 Suites by Hilton. During his tenure, Duncan has established Homewood Suites as the extended-stay category leader, growing market share and expanding the brand’s footprint from 75 to over 300 hotels. He is also responsible for the introduction of Home2 Suites, the fastest growing brand in Hilton Worldwide history.

Copyright (c) 2012 Global Hospitality Resources®, Inc., San Diego, CA USA All rights reserved. 5

Based at Hilton’s Memphis Operations Center, his primary duties include maintaining a solid development pace, overseeing all programs designed to increase occupancy and enhance owner satisfaction, and positioning both Homewood Suites and Home2 Suites as innovators in their respective extended-stay categories.

Prior to his appointment as global head, Duncan held the role of vice president of sales and marketing for Homewood Suites, where he directed strategy and implementation in the areas of sales, marketing, public relations, quality, guest retention, and development support. He has also served as vice president of hotel performance support, a role in which his responsibilities included overseeing revenue management, product service and development, brand performance support, and financial management and profitability.

Duncan has won a variety of awards over his distinguished career including the Hospitality Sales & Marketing Association’s “Top 25 Extraordinary Minds in Sales & Marketing” award in 2009 and most recently the Memphis Corporate Volunteer Council Executive Leadership Award. In addition, Duncan is known as a strong advocate for literacy. He is the author of Homewood’s Lewis the Duck book series and is responsible for the brand’s partnership with childhood literacy organization Books for Kids.

Copyright (c) 2012 Global Hospitality Resources®, Inc., San Diego, CA USA All rights reserved. 6