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US Lodging Industry Overview

Jan D. Freitag

Senior Vice President

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www.hotelnewsnow.com Click on “Hotel Data Presentations”

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Agenda • Total US Review

• Chain Scale Review

• Segmentation Review – Group & Transient

• 2012 / 2013 Forecast

• Channel Study Highlights

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Total US Review

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Supply / Demand Imbalance Drove Last 12 Months

% Change

• Room Supply* 1.8 bn 0.4% • Room Demand* 1.06 bn 4.4% • Occupancy 60.5% 4.0% • A.D.R. $102 3.9% • RevPAR $62 8.0% • Room Revenue* $109 bn 8.4%

12 Months Ending March 2012, Total US Results * All Time High

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Q1 2012: Highest Demand - EVER

(245 Million Rooms Sold)

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-8

-4

0

4

8

1990 2000 2010

Supply Demand

Demand Growth Expected To Revert To Mean. Supply Not An Issue

-6.9%

-0.9%

- 4.7%

*Total US, Supply & Demand % Change, 12 MMA 1/90 – 3/12

8.0%

4.4%

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-10

-5

0

5

1990 2000 2010

Demand ADR

ADR Rebound Trajectory Bodes Well for 2012

-6.9%

-4.7%

-0.9%

-4.6%

-0.2%

-8.7%

3.9%

*Total US, ADR & Demand % Change, 12 MMA 1/90 – 3/12

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ADR Discounting at Twice The Speed of ADR Increases

95

100

105

110

2008 2009 2010 2011

*Total US, ADR $, 12 MMA 2007 - 2011

Apr ‘10 $97

Sept ‘08 $108

Dec ‘11 $102

+4.6%

-10%

19 Months

19 Months

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3.1

2.6

3.9

2.9

4.1

3.7 4.0

3.5

4.1 4.0 4.4

3.5 3.9 4.0 3.9

Jan-11 Jul-11 Jan-12

* Total US, ADR $ % Change, by Month, 1/11 – 3/12

ADRs Are Growing (But Comps Get More Difficult)

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Do You Really Know Your Competitors?

National Nameback %: ??%

* % of hotels that use hotels in their compset which have named them Source: STR Analytics

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Do You Really Know Your Competitors?

National Nameback %: 45%

* % of hotels that use hotels in their compset which have named them Source: STR Analytics

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Chain Scale Review

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Q1: Strong Demand Growth, Supply Not An Issue

-0.9

0.2

1.5

3.2 3.7

4.9

Luxury Upper Upscale Upscale

Supply

Demand

*Supply / Demand % Change, by Scale, Q1 ‘12

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Q1: Strong Beginning to 2012

4.1

3.6 3.4

4.3

3.5

4.1

Luxury Upper Upscale Upscale

Occupancy ADR

*OCC / ADR % Change, by Scale, Q1 ‘12

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Upper End Sells 7 out of 10 Rooms Every Night

72.5

70.5 69.6

71.7 69.9 70.1

Luxury Upper Upscale Upscale

2007 12 Months end 3/12

*Absolute OCC %, by Scale, 2007 & 12 Months ending 3/12

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ADR Growth Is Strong – But Not Strong Enough (...yet)

$293

$159

$121

$264

$149

$113

Luxury Upper Upscale Upscale

2007 12 Months end 3/12

*Absolute ADR $, by Scale, 2007 & 12 Months ending 3/12

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Segmentation Review

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Transient Demand Breaks Records, But....

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12.5

15

17.5

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Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2007 2011 2012

*Transient Demand in Millions of Rooms; 2007, 2011, 2012 Data is for upper tier hotels only (LUX & UU chains, & Upper Tier independents)

Mill

ions

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… Transient ADR Still Lags 2007 Results

$140

$150

$160

$170

$180

$190

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2007 2011 2012

*Transient ADR $, 2007, 2011, 2012 Data is for upper tier hotels only (LUX & UU chains, & Upper Tier independents)

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5.3

4.6

6.4

5.4 5.9

5.1 5.0

3.7

4.7 4.3

4.6

3.7 3.8 3.4

4.0

Jan-11 Apr-11 Jul-11 Oct-11 Jan-12

*Transient ADR % by Month, 1/11 – 3/12 Data is for upper tier hotels only (LUX & UU chains, & Upper Tier independents)

We Expect Transient ADR Growth To Continue

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Group Demand Has Not Changed Over Time, But…

4

6

8

10

12

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Mill

ions

2007 2011 2012

*Group Demand in Millions of Rooms, 2007, 2011, 2012 Data is for upper tier hotels only (LUX & UU chains, & Upper Tier independents)

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… Group ADRs Still Depressed (& Could Dampen Future Absolute ADRs)

$130

$140

$150

$160

$170

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2008 2011 2012

*Group ADR $, 2008, 2011, 2012 Data is for upper tier hotels only (LUX & UU chains, & Upper Tier independents)

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2.6 2.4 2.4

0.2

3.5

2.1 2.1 1.8

3.1 2.7

3.7

-0.5

2.8 2.6

2.3

Jan-11 Apr-11 Jul-11 Oct-11 Jan-12

*Group ADR % by Month, 1/11 – 3/12 Data is for upper tier hotels only (LUX & UU chains, & Upper Tier independents)

Group ADR Expectation Still Depressed

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2012 / 2013 Forecast

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Rooms Pipeline Still Not An Issue in 2012

Phase March 2012 March 2011 Dec 2007

In Construction 60 50 211 “Planned Pipeline” 233 274 204

Active Pipeline 293 324 415

*Total US Pipeline, in ‘000s of rooms, by Phase by Year Planned Pipeline includes projects in Final Planning and Planning phases Source: STR / McGraw-Hill Construction Dodge

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U/C Pipeline By Selected Markets

Market Projects Rooms

Chicago 6 1,300

Miami 9 1,200

Nashville 4 1,400

NYC 50 7,600

Orlando 15 3,700

Washington, DC 12 2,700

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Total United States Forecast 2012 / 2013 Key Performance Indicator % Change 2012

Forecast 2013

Forecast

Supply 0.5% 1.1%

Demand 2.0% 1.8%

Occupancy 1.5% 0.7%

ADR 4.0% 4.6%

RevPAR 5.5% 5.4%

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Total United States Chain Scale Key Performance Indicator Outlook 2012F by Chain Scale

Chain Scale Occupancy

(% chg) ADR

(% chg) RevPAR (%chg)

Luxury +2.6% +5.1% +7.9%

Upper Upscale +1.5% +4.2% +5.7%

Upscale +2.3% +4.6% +7.1%

Total United States 1.5% 4.0% 5.5%

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Channel Study Highlights

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OTA Revenue: 8% Of Revenue, 88% Of Our Conversation

3.2

7.9 8.0 4.7

21.7

45.5

3.6

8.7 8.0 5.2

22.2

47.7

4.2

10.1 9.0 6.2

22.6

52.1

OTA Brand.com CRS/Voice GDS Prop Direct/Other Total US

2009 2010 2011

*Total rooms revenue in billions $, by channel, June YTD 2009 - 2011

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Wide ADR Variance Between OTA and GDS Channel

75

109

128 127

89

99

73

110

127 126

87

97

74

115

127 128

89

101

OTA Brand.com CRS/Voice GDS Prop Direct/Other Total US

2009 2010 2011

*ADR $, by channel, June YTD 2009 - 2011

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Wide ADR Variance By OTA Business Model

97

78

55

90

70

54

97

75

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Retail Merchant Opaque

2009 2010 2011

*ADR $, by OTA channel, June YTD 2009 - 2011

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