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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

• Global Review

• Total US Review

• Chain Scale Review

• Segmentation Review – Group & Transient

• 2012 / 2013 Forecast

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2011: The World Recovered

Markets with Positive REVPAR % Change

Americas: 194 of 212

Europe: 84 of 98 AsiaPac: 38 of 47

Middle East / Africa: 19 of 33

*RevPAR in local currency Source: STR Global

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Major Global Markets Did Well

*2011 % Change, ADR & RevPAR in local currency Source: STR Global

Market OCC ADR RevPAR

Beijing 8.2 5.8 14.6 Berlin 0.9 -2.0 -1.1 Dubai 7.0 3.4 10.7

Hong Kong 2.4 23.1 26.0 London -0.1 8.5 8.4

Mexico City 7.9 2.9 10.9 Moscow 2.7 5.4 8.3

Sao Paulo 2.9 17.7 21.1 Sydney -0.1 5.2 5.1 Tokyo -8.5 -6.7 -14.7

Toronto -0.6 0.6 0.0

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-12

-8

-4

0

4

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2004 2009 2014

GDP Demand

Expect Slowing Eurozone GDP / Demand % Change

*Eurozone Demand & GDP % Change, Quarterly 2004 – 2014F GDP Source: Oxford Economics

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STR Global Forecast – Selected Cities 2012 RevPAR forecast % chg, local currency

-5% to -10% -5% to 0% 0% to +5%

Athens

Amsterdam Berlin

Brussels Frankfurt

Budapest London

Dublin Moscow

Dusseldorf Munich

Hamburg Paris Lux & Up Up

Madrid Prague

Warsaw Rome

Zurich Stockholm

Vienna

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Total US Review

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Supply / Demand Imbalance Drove 2011 Results

% Change

• Room Supply* 1.8 bn 0.6%

• Room Demand* 1.06 bn 5.0%

• Occupancy 60.1% 4.4%

• A.D.R. $102 3.7%

• RevPAR $61 8.2%

• Room Revenue* $108 bn 8.8%

Full Year 2011 Total US Results * All Time High

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January 2012:

Highest January Demand - EVER

(73.4 Million Rooms Sold)

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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

3.1

3.8

2.9

4.6

* Total US, ADR $ % Change, by Month, 1/11 – 1/12, by Week 2/4 – 2/25

... That Being Said, ADRs Are Growing ...

2/4 2/11 2/18 2/25 1/12 1/11 4/11 7/11 9/11 Weekly data

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Chain Scale Review

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Strong Demand Growth, Supply Not An Issue

0.8 1.8 1.8

5.5

-8.7

0.3

6.0 4.6

6.0

11.0

-5.5

4.0

Luxury Upper Upscale Upscale Upper Midscale Midscale Economy

Supply

Demand

*Supply / Demand % Change, by Scale, 2011 Midscale Supply Change Caused by Best Western Re-classification

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Early Recovery: OCC % > ADR %

5.2

2.8

4.1

5.2

3.5 3.7

5.7

3.6 3.8 3.3

-0.5

2.2

Luxury Upper Upscale Upscale Upper Midscale Midscale Economy

Occupancy

ADR

*OCC / ADR % Change, by Scale, 2011

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Upper End Sells 7 out of 10 Rooms Every Night

71.7

70.5 69.6

65.3

58.4 57.0

69.9 69.3 69.5

61.5

53.5 53.5

Luxury Upper Upscale Upscale Upper Midscale Midscale Economy

2007 2011

*Absolute OCC %, by Scale, 2007 & 2011

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

$286

$159

$121

$94 $77

$54

$257

$148

$112 $94

$73

$50

Luxury Upper Upscale Upscale Upper Midscale Midscale Economy

2007 2011

*Absolute ADR $, by Scale, 2007 / 2011

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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 2010 2011

*Transient Demand in Millions of Rooms; 2007, 2010, 2011 Data is for upper tier hotels only (LUX & UU chains, & Upper Tier independents)

Mill

ion

s

1/12

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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 2010 2011

*Transient ADR $, 2007, 2010, 2011 Data is for upper tier hotels only (LUX & UU chains, & Upper Tier independents)

1/12

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5.0

4.0

5.9

5.1

5.6

4.8 4.9

3.5

4.4 4.1

4.4

3.2

3.8

1.4

3.3

2.2

4.5

*Transient ADR % by Month, 1/11 – 1/12, by Week 2/4 – 2/25 Data is for upper tier hotels only (LUX & UU chains, & Upper Tier independents)

We Expect Transient ADR Growth To Continue

2/4 2/11 2/18 2/25 1/12 1/11 4/11 7/11 9/11 Weekly data

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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

Millio

ns

2007 2010 2011

*Group Demand in Millions of Rooms, 2007, 2010, 2011 Data is for upper tier hotels only (LUX & UU chains, & Upper Tier independents)

1/12

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… Group ADR Does Not Increase (& Could Depress Future Absolute ADRs)

$130

$140

$150

$160

$170

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

2008 2010 2011

*Group ADR $, 2008, 2010, 2011 Data is for upper tier hotels only (LUX & UU chains, & Upper Tier independents)

1/12

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2.3 1.9

2.2

0.1

3.4

1.9 1.9 1.6

2.8 2.4

3.3

-0.7

2.8

-0.1

5.0

0.7

2.7

*Group ADR % by Month, 1/11 – 1/12, by Week 2/4 – 2/25 Data is for upper tier hotels only (LUX & UU chains, & Upper Tier independents)

Group ADR Growth Is Tepid So Far

2/4 2/11 2/18 2/25 1/12 1/11 4/11 7/11 9/11 Weekly data

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2012 / 2013 Forecast

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Rooms Pipeline Still Not An Issue in 2012

Phase Dec 2011 Dec 2010 Dec 2007

In Construction 54 52 211

“Planned Pipeline” 254 265 204

Active Pipeline 308 317 415

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

2012 Forecast

2013 Forecast

Supply 0.8% 1.4%

Demand 1.3% 2.0%

Occupancy 0.5% 0.5%

ADR 3.8% 4.4%

RevPAR 4.3% 4.9%

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Publicly Traded Company 2012 RevPAR Guidance

Company Name Guidance 2012

HOST Hotels & Resorts

Choice Hotels

DiamondRock Hospitality +4-6%

FeCor Lodging Trust

Sunstone Hotel Investors

Marriott International

LaSalle Hotel Properties +5-7%

Starwood Hotels

Wyndham Worldwide +5-8%

Chatham Lodging Trust

Hersha Hospitality +6-8%

Strategic Hotels

Chesapeake Lodging Trust +6.5–8.5%

Pebblebrook Hotel Trust +8-10%

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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 2.7% 4.7% 7.4%

Upper Upscale 0.1% 3.5% 3.6%

Upscale 2.0% 4.5% 6.6%

Upper Midscale -0.3% 3.7% 3.4%

Midscale 1.0% 0.8% 1.8%

Economy 0.7% 2.4% 3.1%

Independent -0.3% 3.4% 3.1%

Total United States 0.5% 3.8% 4.3%

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