US LODGING INDUSTRY OVERVIEW Mark V Lomanno President

US LODGING INDUSTRY OVERVIEW Mark V. Lomanno President SMITH TRAVEL RESEARCH

Total United States Occupancy Percent Twelve Month Moving Average – 1989 to October 2005 64. 9% Sep 95 & May 96 63. 3% Feb 2001 61. 9 % December 1991 58. 5% Aug 02 & May 03 Oct 05 62. 6%

Total United States Room Supply/Demand Percent Change Twelve Month Moving Average – 1989 to October 2005 3. 0% 0. 3%

Total United States Room Supply Percent Change Jan 2001 – October 2005

Total United States Room Demand Percent Change Jan 2001 – October 2005

Total United States Occupancy/ADR Percent Change Twelve Month Moving Average – 1989 to October 2005 Divergence? Divergence

Total United States Rev. PAR Percent Change Twelve Month Moving Average – 1989 to October 2005 6. 5% 8. 1% 6. 5% Feb 05 Feb 01 Feb 97 -2. 6% Oct 91 -10. 6% Jun 02 7. 6 %

Total United States Key Performance Indicators Percent Change October YTD

Total U. S. - Occupancy October YTD

Total U. S. – Nominal Average Daily Rate October YTD

STR Chain Scales Selected chains from each segment • Luxury – Four Seasons, Ritz Carlton, Fairmont • Upper Upscale – Embassy, Hilton, Marriott, Sheraton • Upscale – Hilton Garden Inn, Courtyard, Crowne Plaza • Mid with F&B – Holiday Inn, Ramada, Best Western • Mid no F&B – Hampton Inn, HI Express, Comfort Inn • Economy – Motel 6, Red Roof, Days Inn

Chain Scale - Average Daily Rate October 2005 YTD

Chain Scale- Occupancy Percent October 2005 YTD

Chain Scales Supply/Demand Percent Change October 2005 YTD

Chain Scales Occupancy/ADR Percent Change October 2005 YTD

U. S. Economic Outlook Blue Chip Economic Indicators – October 2005 2004 A 2005 F 2006 F Real GDP +4. 2% +3. 5% +3. 3% CPI +2. 7% +3. 3% +2. 9% Corporate Profits +12. 5% +15. 4% +7. 1% Disp Personal Income +3. 4% +1. 9% +3. 3% Unemployment Rate 5. 5% 5. 1% 5. 0%

Total United States Active Development Pipeline - Rooms Change From Last Year Sept 2005 Sept 2004 In Construction 95, 967 89, 752 6, 215 6. 9% Final Planning 18, 226 15, 840 2, 386 15. 1% 168, 687 162, 740 5, 947 3. 7% 56, 489 110, 743 (54, 254) -49. 0% 339, 369 379, 075 (39, 706) -10. 5% Planning In Pre-Planning Total Development Source: STR / TWR / Dodge Construction Pipeline Change % Chg

Katrina Impact on the Region / Nation Region: • Lower room supply through Dec ‘ 05 • Much higher room demand through Dec ’ 05 Nation: • Displaced meetings will go elsewhere • Displaced leisure travelers will go elsewhere • National supply number decreases • National demand number increases • National 2005 Rev. PAR higher than prior estimates

Total United States Katrina Impact - 2005

Total United States Supply/Demand Percent Change 2000 – 2006 P

Total United States Occupancy Percent 2000 – 2006 P

Total United States Occupancy Percent Change 2000 – 2006 P

Total United States ADR Percent Change 2000 – 2006 P

Total United States Nominal Room Rates 1998 – 2006 P Source: STR

Total United States Real Room Rates – (Base Year = 2000) Year End 2000 – 2005 P Source: STR

Total United States Rev. PAR Percent Change 2000 – 2006 P

Total United States Nominal Rev. PAR Year End 2000 – 2006 P Source: STR

United States Lodging Industry - Estimated Profits (Billions $) 1982 – 2005 E $ 30. 5% 24. 5% In 2005: $500 M revenue increase due to Katrina- $75 M increase to profits Source: PWC 2005 Estimate

Key Points * Low Room Supply Growth * Good Demand Growth * Increased Pricing Leverage * Street Corner Business * Long Term Optimism Source: STR