Hotel Industry Overview 2019 Lodging Conference Vail Ross

Agenda Total U. S. Review Class & Customer Segmentation Review Pipeline Outlook Forecast ©

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Total U. S. Review © 2019 STR. All Rights Reserved.

Longest Rev. PAR Upcycle (with two small interruptions) 15 5 111 Months (out of

Little (or no growth) Story Continues Actual % Change Room Supply 2. 0% p

Demand Supply growth in sync 8 Supply % Change Demand % Change 4 2.

ADR growth positive however slowing 10 Occ % Change ADR % Change 1. 4%

Real ADR Growth (ADR% minus CPI%) Negative For Four Qtrs 10 5 0 -5

De tro i Or t, M Ph la I ila de nd o, lp

Top 25 Market Performance: Despite High Occupancies a Very Mixed Bag Market OCC %

STR monitoring the Number of Submarkets with Negative Rev. PAR % 97% 70% U.

Class and Customer Segmentation © 2019 STR. All Rights Reserved.

All Rev. PAR growth coming from ADR…except Economy Occ % Change ADR % Change

Still somewhat high actual occupancy levels 72. 4 72. 5 74. 0 74. 6

Transient Segment – Rooms reserved at rack rate, corporate negotiated, package, government rate or

Gap between Group and Transient has continued 65% 60% 55% 50% 16. 5 28.

Demand Growth positive however slowing Demand % Change 5% ADR % Change 2% -1%

ADR growth falling with Demand is steady 4% 3% 2% 1% Demand % Change

Top 10 Destinations For Future Meetings New York, NY Chicago, IL Las Vegas, NV

Pipeline © 2019 STR. All Rights Reserved.

Under Construction Rooms Increase. Only 4 K off from 2007/2008 Peak Phase 2019 2018

Select Service Construction Is The Name Of The Game 70% Thousands 63. 2 63.

In Construction Rooms Are Dominated By Two Players: Hilton & Marriott Hilton + Marriott

Large Markets Grow Rapidly Market Rooms In Construction % Of Existing Nashville, TN New

2019 / 2020 Forecast © 2019 STR. All Rights Reserved.

Miscellaneous Income saw biggest gain in 2018 Rooms Other F&B +2. 4% +3. 9%

Outlook Metric 2019 Forecast 2020 Forecast Supply 1. 9% Demand 2. 1% 1. 6%

2019 Year End Rev. PAR Forecast Top North American Markets, August 2019 Forecast (Markets

2020 Year End Rev. PAR Forecast Top North American Markets, August 2019 Forecast (Markets

Threats looming on the horizon Slower Profitability Growth Anemic ADR Growth Low Unemployment Overall

Thank You! Vail Ross SVP, Global Business Development & Marketing vross@str. com @vross_STR www.

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Hotel Industry Overview 2019 Lodging Conference Vail Ross Senior VP, Global Business Development & Marketing vross@str. com @vail_STR © 2019 STR, Inc. All Rights Reserved. Any reprint, use or republication of all or a part of this presentation without the prior written approval of STR, Inc. or STR Global, Ltd. trading as STR (collectively “STR”) is strictly prohibited. Any such reproduction shall specifically credit STR as the source. This presentation is based on data collected by STR. No strategic advice or marketing recommendation is intended or implied.

Longest Rev. PAR Upcycle (with two small interruptions) 15 5 111 Months (out of 112) -5 112 Months (out of 114) 56 Months -15 -25 1990 2000 Total U. S. , Rev. PAR % Change by month, 1/1990 – 08/2019 2010 © 2019 STR. All Rights Reserved.

Little (or no growth) Story Continues Actual % Change Room Supply 2. 0% p Room Demand 2. 1% p Occupancy 67. 6% 0. 1% p ADR $132 1. 1% p Rev. PAR $90 1. 2% p Total U. S. Results, August YTD 2019 © 2019 STR. All Rights Reserved.

Demand Supply growth in sync 8 Supply % Change Demand % Change 4 2. 0% 0 -4 -8 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Total U. S. , Supply & Demand % Change, 12 MMA 1/1990 – 8/2019 © 2019 STR. All Rights Reserved.

ADR growth positive however slowing 10 Occ % Change ADR % Change 1. 4% 5 0 -5 -0. 0% -10 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Total U. S. , ADR & OCC % Change, 12 MMA 1/1990 – 8/2019 © 2019 STR. All Rights Reserved.

Or it, de lp la n M I do hi , FL a, W PA as S hi e at NJ ng t to le , n, DC WA -M Sa Dn Di VA eg Ho o, C M A ia usto m i/H n, T M in X ia ne le a ap Ne h, ol FL is/ w Y or St k, Pa N ul , M Y NSa W n D I al Fr S l an as t. L cis , T ou X co i s , M /S an OM IL a Ne te w o Or , CA le an Bo s, L A s Oa ton , hu M A Isl An an d, ah A Lo HI s A eim tlan / ta ng Sa , G el es nta A /L An on a g. B , C No A e ac rfo h lk /V Ch , CA irg i in cag o ia Be , IL ac h De , VA nv Ta er m N , C pa as O hv /S t. P ill e et er , TN sb ur Ph g, F L oe ni x, AZ ila Ph De tro 18 of the top 25 markets have Occ declines… 0. 0 0. 2 -3. 0 -2. 8 -2. 6 -1. 9 -2. 1 -1. 6 -1. 2 -0. 9 Occupancy % Change, August 2019 YTD -0. 4 -0. 8 -0. 6 0. 5 1. 0 1. 1 1. 4 1. 8 -0. 3 -0. 1 © 2019 STR. All Rights Reserved.

De tro i Or t, M Ph la I ila de nd o, lp FL hi a, W PA as S hi ng eat NJ tle to n, , DC WA -M Sa Dn Di VA eg Ho o, C M ia ust A m o i/H n, M in ia TX ne l ap Ne eah ol , F w is/ L St Yor k Pa , N ul , M Y NSa W n D I Fr St alla an s, Lo cis TX u co /S is, M an OM at IL Ne eo w Or , C A le an Bo s, L A s Oa ton , hu M A Isl An an a d h Lo A , H s A eim tla I n /S ng ta a , G el es nta A /L An on a g. B , C No ea A rfo ch lk /V Ch , CA irg i in cag ia o Be , IL ac h De , V A n Ta ve m N r , C pa as O /S h t P vill e, et T er sb N ur Ph g, F oe L ni x, AZ … Of those, 5 also have ADR declines 6 4 2 0 -2 -4 OCC % Chg Occupancy & ADR % Change, August 2019 YTD ADR % Chg -6 © 2019 STR. All Rights Reserved.

Top 25 Market Performance: Despite High Occupancies a Very Mixed Bag Market OCC % Rev. PAR % Change Influenced By Atlanta, GA 71. 3 65. 6 Super Bowl LIII Phoenix, AZ 72. 1 4. 9 0. 6% Supply Growth San Francisco/San Mateo, CA 82. 5 4. 4 Groups Return Full Force Denver, CO 76 3. 9 8. 3% Demand Growth Nashville, TN 74. 5 3. 6 NFL Draft +Bachelorettes Seattle, WA 75. 5 -5. 4 Houston, TX 64. 2 -5. 0 New York, NY 84. 9 -3. 6 6. 6% Supply Growth Hurricane Comp & 4% Supply Growth Surprisingly Weak Minneapolis/St Paul, MN-WI 68. 7 -3. 1 Superbowl LII Orlando, FL 78. 1 -2. 3 -4. 1% Group OCC Decline Rev. PAR % Change & absolute OCC in Top 25 Markets: 5 Leading / 5 Lagging Performing Rev. PAR % Markets, YTD August 2019 © 2019 STR. All Rights Reserved.

STR monitoring the Number of Submarkets with Negative Rev. PAR % 97% 70% U. S. Tipping Point 43. 5% 63% 57% 54% 46% 33% 25% 24% 1991 1994 24% 28% 37% 33% 23% 15% 9% 8% 8% 1997 2000 2003 2006 23% 18% 14% 9% 2009 Submarkets with Negative Rev. PAR % Change out of all 649 Submarkets, by year 1991 – 2018, YTD 2018/2019 12% 16% 27% 26% 12% 4% 2012 2015 YTD 2018 ‘ 19 © 2019 STR. All Rights Reserved.

All Rev. PAR growth coming from ADR…except Economy Occ % Change ADR % Change 0. 5 1. 1 1. 4 0. 8 -0. 1 Luxury -0. 7 -0. 5 Upper Upscale 0. 8 0. 6 0. 0 -0. 1 Upper Midscale Rev. PAR % Change by Contribution of OCC / ADR % Change, by Class, Aug YTD 2019 1. 0 Economy © 2019 STR. All Rights Reserved.

Still somewhat high actual occupancy levels 72. 4 72. 5 74. 0 74. 6 2019 73. 0 73. 4 2018 69. 2 69. 3 Luxury Upper Upscale OCC %, by Class, Aug YTD 2019 & 2018 Upscale Upper Midscale 61. 4 61. 5 60. 9 60. 3 Midscale Economy © 2019 STR. All Rights Reserved.

Transient Segment – Rooms reserved at rack rate, corporate negotiated, package, government rate or rooms booked via third party websites. Group Segment – Rooms sold simultaneously in blocks of 10 or more. © 2019 STR. All Rights Reserved.

Gap between Group and Transient has continued 65% 60% 55% 50% 16. 5 28. 4 32. 6 45% 40% 35% 30% Group Mix 25% 2005 2010 Transient Mix 2015 Group and Transient Mix, 12 MMA January 2005 – August 2019 (Luxury and Upper Upscale Class only) © 2019 STR. All Rights Reserved.

Demand Growth positive however slowing Demand % Change 5% ADR % Change 2% -1% -4% Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Group: Demand ADR % Change, Luxury and Upper Upscale Classes, 12 MMA, 1/2016 – 8/2019 (Luxury and Upper Upscale Class only) Jul-18 Jan-19 Jul-19 © 2019 STR. All Rights Reserved.

ADR growth falling with Demand is steady 4% 3% 2% 1% Demand % Change ADR % Change 0% Jan-16 Jul-16 Jan-17 Jul-17 18 -Jan Jul-18 Transient: Demand ADR % Change, Luxury and Upper Upscale Classes, 12 MMA, 1/2016 – 8/2019 (Luxury and Upper Upscale Class only) Jan-19 Jul-19 © 2019 STR. All Rights Reserved.

Top 10 Destinations For Future Meetings New York, NY Chicago, IL Las Vegas, NV Orlando, FL Washington, D. C. Atlanta, GA San Diego, CA Dallas, TX Los Angeles, CA Austin, TX 0% 5% 10% 15% 20% 25% STR 2019 Destination. MAP: % of meetings planners who plan to use destination for a meeting in the next two years © 2019 STR. All Rights Reserved.

Under Construction Rooms Increase. Only 4 K off from 2007/2008 Peak Phase 2019 2018 % Change In Construction 207 188 10. 4% Final Planning 238 215 10. 6% Planning 216 203 5. 9% Under Contract 661 607 9. 0% Total U. S. Pipeline, by Phase, ‘ 000 s Rooms, August 2019 and 2018 © 2019 STR. All Rights Reserved.

Select Service Construction Is The Name Of The Game 70% Thousands 63. 2 63. 1 29. 4 20. 2 14. 3 14. 1 3. 2 Luxury Upper Upscale Upper Midscale U. S. Pipeline, Rooms In Construction , ‘ 000 s Rooms, by Scale, August 2019 Economy Unaffiliated © 2019 STR. All Rights Reserved.

In Construction Rooms Are Dominated By Two Players: Hilton & Marriott Hilton + Marriott All Other 42% 58% U. S. Pipeline, Rooms In Construction, Share of HLT & MAR of total, Q 2 2019 © 2019 STR. All Rights Reserved.

Large Markets Grow Rapidly Market Rooms In Construction % Of Existing Nashville, TN New York, NY Minneapolis/St Paul, MN-WI Tampa/St Petersburg, FL Boston, MA 5, 572 14, 437 3, 482 3, 137 3, 826 12% 11% 8% 7% 6% Dallas, TX 5, 913 6% Los Angeles/Long Beach, CA 6, 130 6% Philadelphia, PA-NJ 2, 866 6% Phoenix, AZ 3, 964 6% Orlando, FL 7, 099 6% U. S. Pipeline, Rooms In Construction and as % of Existing Supply, Largest % In Top 26 Markets, Aug 2019 © 2019 STR. All Rights Reserved.

Miscellaneous Income saw biggest gain in 2018 Rooms Other F&B +2. 4% +3. 9% Miscellaneous Income +11. 3% Total Revenue +2. 9% Food +2. 4% Other Operated Departments Beverage +5. 2% +3. 2% Total U. S. Revenue Variance, 2018 vs. 2017 Source: 2019 HOST Almanac © 2019 STR. All Rights Reserved.

Outlook Metric 2019 Forecast 2020 Forecast Supply 1. 9% Demand 2. 1% 1. 6% Occupancy 0. 2% -0. 3% ADR 1. 4% Rev. PAR 1. 6% 1. 1% Total United States Key Performance Indicator Outlook (% Change vs. Prior Year) 2019 F – 2020 F © 2019 STR. All Rights Reserved.

2019 Year End Rev. PAR Forecast Top North American Markets, August 2019 Forecast (Markets sorted alphabetically) - 3% to 1% 1% to 3% 3% to 6% Chicago, IL Dallas, TX Detroit, MI Houston, TX Miami/Hialeah, FL Minneapolis/St Paul MN-WI New Orleans, LA New York, NY Oahu Island, HI Orlando, FL Philadelphia, PA-NJ San Diego, CA Seattle, WA Washington, DC-MD-VA Anaheim/Santa Ana, CA Boston, MA Denver, CO Los Angeles/Long Beach, CA Norfolk/Virginia Beach, VA Phoenix, AZ St Louis, MO-IL Toronto, ON Atlanta, GA Montreal, QC Nashville, TN San Francisco/ San Mateo, CA Tampa/St Petersburg, FL Vancouver, BC Note: Rev. PAR Growth forecast estimates are in local currency © 2019 STR. All Rights Reserved.

2020 Year End Rev. PAR Forecast Top North American Markets, August 2019 Forecast (Markets sorted alphabetically) - 3% to 1% 1% to 3% 3% to 6% Atlanta, GA New York, NY Philadelphia, PA-NJ Tampa/St Petersburg, FL Anaheim/Santa Ana, CA Boston, MA Chicago, IL Dallas, TX Denver, CO Detroit, MI Houston, TX Los Angeles/Long Beach, CA Minneapolis/St Paul MN-WI Nashville, TN New Orleans, LA Norfolk/Virginia Beach, VA Oahu Island, HI Orlando, FL Phoenix, AZ San Diego, CA Seattle, WA St Louis, MO-IL Washington, DC-MD-VA Toronto, ON Miami/Hialeah, FL Montreal, QC San Francisco/ San Mateo, CA Vancouver, BC Note: Rev. PAR Growth forecast estimates are in local currency © 2019 STR. All Rights Reserved.

Thank You! Vail Ross SVP, Global Business Development & Marketing vross@str. com @vross_STR www. linkedin. com/in/vailross © 2019 STR, Inc. All Rights Reserved. Any reprint, use or republication of all or a part of this presentation without the prior written approval of STR, Inc. or STR Global, Ltd. trading as STR (collectively “STR”) is strictly prohibited. Any such reproduction shall specifically credit STR as the source. This presentation is based on data collected by STR. No strategic advice or marketing recommendation is intended or implied.