Resort Conference March 21 st 2006 Jan D

Resort Conference March 21 st, 2006 Jan D. Freitag, VP SMITH TRAVEL RESEARCH

Agenda • Total US Overview • Resort Locations • Destination Resorts • Condo Hotels • Total US Projections

Total United States Estimated Revenue and Profitability Years 1999 – 2005 P Life is good !

U. S. Lodging Industry - Key Statistics Latest 12 Months - January 2006 • • • Hotels Rooms Occupancy A. D. R. Rev. Par Room Revenue 47, 735 4. 4 mm 63. 3% $91. 28 $57. 76 $94 B % Change 0. 6% 0. 3% 2. 9% 5. 5% 8. 6% 9. 0%

Total United States Room Supply/Demand Percent Change Twelve Month Moving Average – 1989 to January 2006 3. 3% 0. 3% Cyclicality Clearly Visible – Recent S/D Imbalance Spells Opportunity

Total United States Occupancy/ADR Percent Change Twelve Month Moving Average – 1989 to January 2006 Divergence? Divergence If History Repeats Itself, Strong ADR Gains are Here to Stay

Total United States Occupancy Percent, Average Daily Rate, Rev. PAR Twelve Month Moving Average – 1989 to January 2006 $91. 28 $86. 36 64. 9% Robust OCC and ADR Gains post 9/11 63. 3%

STR Chain Scales Selected chains from each segment • Luxury – Four Seasons, Ritz Carlton, Fairmont, W Hotels • Upper Upscale – Doubletree, Hilton, Hyatt, Sheraton • Upscale – Hilton Garden Inn, Courtyard, Crowne Plaza, Radisson • Mid with F&B – Holiday Inn, Ramada, Best Western, Quality Inn • Mid no F&B – Comfort Inn, HI Express, Country Inns & Suites • Economy – Motel 6, Days Inn, ESA, Travelodge, Ramada Limited

Chain Scales Supply/Demand Percent Change Twelve Months Ended January 2006 Business Traveler Drives Demand for Big Boxes

Chain Scales Occupancy/ADR Percent Change Twelve Months Ended January 2006 Above Inflation Rate Growth Across all Chain Scales

Chain Scales Rev. PAR/Room Revenue Percent Change Twelve Months Ended January 2006 Life is Good!

Agenda • Total US Overview • Resort Locations • Destination Resorts • Condo Hotels • Total US Projections

Resort Locations Key Statistics 12 Month Moving Average January 2006 • • Hotels Room Nights Demand Occupancy ADR Rev. PAR Room Rev 3, 890 214. 6 m 143. 3 m 66. 7% $127. 06 $85. 11 $18. 3 b % Change -2. 5% -1. 8% -0. 8% 1. 1% 6. 0% 7. 1% 5. 2%

Resort Locations Room Supply/Demand Percent Change Twelve Month Moving Average – 1989 to January 2006 -0. 8% -1. 8% Supply Increase Used to be Somewhat Constant – Until 9/11

Resort Locations Room Demand Percent Change Peaks Twelve Month Moving Average – 1989 to January 2006 48 months Demand Peaks Every 48 months – Or Does it? 42 months

Resort Locations Occupancy/ADR Percent Change Twelve Month Moving Average – 1989 to January 2006 Despite Decreasing OCC Growth, ADR Growth Should be Here to Stay

Resort Locations Occupancy Percent, Average Daily Rate Twelve Month Moving Average – 1989 to January 2006 Jan 2006: $127 July 2001: $115 July 1997: 69. 1% Jan 2006: 66. 7% OCC & ADR Rebound after 9/11 – but OCC still has a way to go

Resorts Day of Week Analysis – Occupancy 2003 - 2005 Nice Increases Midweek - but Have Weekends Peaked?

Resorts Day of Week Analysis – ADR 2003 - 2005 ~$8 Rate Growth Across the Board – a Good Sign for 2006

Resorts Group vs. Transient ADR 2003 - 2005 Group Rate Growth Lags Transient Rate Growth

Resorts Day of Week ADR - Group 2003 - 2005 vs 2004: Moderate Daily Rate Growth (~3%) For Groups

Resorts Day of Week ADR – Transient 2003 - 2005 vs 2004: Healthy Rate Increases Across All Days (~10%)

Agenda • Total US Overview • Resort Locations • Destination Resorts • Condo Hotels • Total US Projections

Destination Resort Key Statistics 12 Month Moving Average January 2006 • • Hotels Room Nights Demand Occupancy ADR Rev. PAR Room Rev 317 57. 7 m 38. 8 m 67. 3% $182. 98 $123. 14 $7. 1 b % Change 1. 0 % - 0. 5 % 1. 2 % 1. 7 % 6. 3 % 8. 1 % 7. 6 % 0. 7% of US Hotel Supply generates 7. 6 % of US Rooms Revenue

Destination Resorts Room Supply/Demand Percent Change Twelve Month Moving Average – 1989 to January 2006 1. 2% -0. 5% Segment Always Attracts New Supply – Except in the Most Recent Past

Destination Resorts Occupancy/ADR Percent Change Twelve Month Moving Average – 1989 to January 2006 Above 6% Rate Growth Lasts Not Forever… But for Now

Destination Resorts Occupancy Percent, Average Daily Rate Twelve Month Moving Average – 1989 to January 2006 Jan 2006: $182 July 2001: $171 May 1997: 70. 6% Jan 2006: 67. 3% Still Room For Improvement Post 9/11 in Both Measures

Destination Resorts Monthly Occupancy 2000 vs. 2005 76. 8% 75. 8% In the Off Season, Year 2000 Still Is the Benchmark To Beat

Destination Resorts Monthly ADR 2000 vs. 2005 -$6 +$14 December Rate Differential Still $6

Destination Resorts Day of Week Analysis – Occupancy 2003 - 2005 Strong “Long Weekends” (Thu – Sat) But Have Fr/Sat Reached Their Peak?

Destination Resorts Day of Week Analysis – ADR 2003 - 2005 Second Part of the Cycle: Rate Increase ‘ 04/’ 03: 2% - Rate Increase ‘ 05/’ 04: 6%

Agenda • Total US Overview • Resort Locations • Destination Resorts • Condo Hotels • Total US Projections

Definitions • Condo Hotel Rooms: Rooms placed in Rental Pool • Residences: Rooms not placed in Rental Pool

Total U. S. Summary of Condotel Pipeline – March 2006 229 Projects with a total of 98, 142 reported* rooms Rooms are broken out as follows ( % of total): • Hotel Rooms: 34, 166 35% • Condo Hotel Rooms: 48, 678 50% Total Affecting Nightly Room Supply: 82, 844 85% • Non-rental Residences: 13, 938 14% 1, 360 1% • Timeshare Rooms: * Some projects have not yet reported room counts Source: STR Condotel Pipeline, part of the STR / TWR / Dodge Construction Pipeline

Total U. S. Top 10 Condotel MSAs March 2006

Annual Occupancy 2003 - 2005 Total US vs. Condo Hotels vs. Destination Resorts %

Annual ADR 2003 - 2005 Total US vs. Condo Hotels vs. Destination Resorts $

Condotel: Data Reporting Topics • Reporting Availability Static vs. Fluctuating Rooms Available • Reporting Rooms Sold Issue: Owner Occupied, Non-Revenue Generating Rooms • Reporting Rooms Revenue The Rule: No Restatements after 120 days • Comp Set Issues Choosing a Condotel in your Comp Set will likely do more harm than good

Agenda • Total US Overview • Resort Locations • Destination Resorts • Condo Hotels • Total US Projections

Lodging Industry Issues • Supply Growth Remains Benign – Construction Costs, Condo Conversions • Higher Operating Costs – Insurance, Labor, Amenities, Energy • Solid Demand Growth – Degrees of Good, Some Not So Good • Changing Demand – Experience Travel, Baby Boomers • Occupancy Growth Slows – Varies Widely by Market • Aggressive Pricing – Could Double CPI, Control of Internet Pricing • Transportation Problems – Troubled Airlines, Gasoline, Infrastructure • Higher Industry Profits – More Difficult for each Property • Global Issues – Terrorism, Bird Flu, Currency Fluctuations • Outlook – Great ‘till ‘ 08?

U. S. Economic Outlook Blue Chip Economic Indicators – March 2006 2005 A 2006 F 2007 F Real GDP +3. 6% +3. 4% +3. 0% CPI (= Inflation) +3. 4% +2. 9% +2. 4% Corporate Profits + 17. 1% +9. 5% +4. 6% Disp Personal Income +1. 5% +3. 2% Unemployment Rate 5. 1% 4. 8% 4. 7%

Total United States Supply/Demand Percent Change 2002 – 2006 P

Total United States Occupancy Percent Change 2002 – 2006 P

Total United States Occupancy Percent 2002 – 2006 P

Total United States ADR Percent Change 2002 – 2006 P

Total United States Real Room Rates – (Base Year = 2000) Year End 2000 - 2005

Total United States Nominal Room Rates 2000 – 2006 P If Yr. 2000 Rate Had Grown at 3% over 6 years:

Total United States Rev. PAR Percent Change 2002 – 2006 P

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