2018 Market Pulse: What the Data Reveals Spring 2017 JP Ford, CHB, ISHC, Senior Vice President, Global Director of Business Development DONE

The State of the US Construction Pipeline Fast Facts The latest US Construction Pipeline Trend Report from Lodging Econometrics (LE), states that the total US Construction Pipeline ended Q3 2017 with 5,011 Projects/608,837 Rooms, up 4% by projects and 4% by rooms Year-Over-Year (YOY). • There are 1,592 Projects/208,523 Rooms Under Construction, up 123 projects or 8% YOY. • Projects Scheduled to Start in the Next 12 Months, at 2,198 Projects/251,259 Rooms, are down 17 projects, <1% YOY. • Projects in Early Planning at 1,221 Projects/ 149,055 Rooms are up 109 projects or 10% YOY. • Close to 3,300 new hotels with nearly 378,000 new rooms are forecast to open in the US through 2019. Add conversions notes

US Lodging Real Estate Cycle Last Cycle Peak: Q208 with 5,883 Projects/785,547 Rooms Earnings Development Lending Transactions Peak New Hotel Openings Peak Earnings Peak Transaction Activity Wall St. Activity New Project Announcements Full Operating Recovery Landing Zone ?? Early Transaction Recovery Add conversions notes Main Street Debt Availability Conversions/Renovations Early Operating Recovery Recovery Expansion Cycle Peak X 12 13 14 15 16 17 18 19 20 21

US Construction Pipeline By Projects and Rooms 609 615 599 Forecast 546 461 383 Rooms (000s) 341 Re-tick Projects 2,757 3,020 3,645 4,413 4,960 5,011

US Construction Pipeline By Project Stage Year-Over-Year (YOY) Q317 Q316 % Variance Projects Rooms Under Construction 1,592 208,523 1,469 194,380 8% 7% Starts Next 12 Months 2,198 251,259 2,215 250,251 <1% 0% Early Planning 1,221 149,055 1,112 141,471 10% 5% Total Pipeline 5,011 608,837 4,796 586,102 4% Re-tick

US Construction Pipeline By Chain Scale Rooms Luxury 16,463 Upper Upscale 58,378 Upscale 164,628 Upper Midscale 205,330 Midscale 50,077 Economy 12,091 Casino 10,969 Unbranded 90,901 Total 608,837 Re-tick % by rooms

US Construction Pipeline By Chain Scale with Unbranded Included Rooms Luxury 23,071 Upper Upscale 75,416 Upscale 197,847 Upper Midscale 228,420 Midscale 58,315 Economy 14,799 Casino 10,969 Total 608,837 % by rooms

US Forecast New Hotel Openings By Rooms Re-tick

US Forecast for New Hotel Openings By Chain Scale 2017 2018 2019 Projects Rooms Growth Rate Luxury 22 4,093 2.6 18 4,748 2.9 16 4,276 2.5 Upper Upscale 48 10,365 1.7 71 12,617 2.0 73 14,198 2.2 Upscale 265 35,362 5.0 318 40,193 5.4 344 42,956 5.5 Upper Midscale 450 43,755 4.7 521 51,064 5.2 516 51,467 Midscale 80 6,174 1.3 91 7,643 1.5 103 8,133 1.6 Economy 38 3,589 0.4 46 4,306 0.5 33 4,057 Unbranded 70 7,572 0.6 76 8,868 0.7 63 8,619 Casino 6 1,106 5 1,194 1,284 Re-tick

US Construction Pipeline Top Ten Markets YOY by Rooms 190 31.2 181 30.2 Projects Rooms 169 19.9 143 17.6 108 18.2 112 16.8 124 16.7 131 15.8 123 15.7 148 16.4 Re-tick Rooms Pipeline as a % of Market Census 28.4% 26.4% 19.3% 20.6% 18.3% 16.6% 39.4% 40.3% 25.0% 19.6%

US Construction Pipeline Top Ten Markets YOY by Rooms cont’d Projects Rooms 65 15.5 84 14.8 79 14.9 73 12.7 68 11.6 64 11.4 68 11.5 67 11.3 68 10.5 39 7.0 Re-tick Rooms Pipeline as a % of Market Census 5.3% 11.7% 27.7% 27.4% 11.5% 10.4% 25.9% 25.2% 19.3% 20.4%

Average # Rooms Per Project U.S. Construction Pipeline Top US Parent Companies New Construction Plus Conversions by Rooms Q317 Q316 Projects Rooms Average # Rooms Per Project Marriott International 1,382 179,656 130 1,253 165,642 132 Hilton Worldwide 1,335 155,052 116 1,165 137,629 118 InterContinental Hotels Group (IHG) 890 92,634 104 857 91,208 106 Choice Hotels 661 50,913 77 621 49,058 79 Best Western Hotels & Resorts 264 27,631 105 196 17,424 89 Re-tick Q317

Starts Next 12 & Early Planning Global Construction Pipeline by Region 2017 vs. 2016* United States Other Americas EMEA AP Under Construction Projects Rooms Fall 2017 1,592 208,523 488 82,610 1,065 219,929 2,618 547,208 Fall 2016 1469 194,380 471 80,394 831 185,373 2,549 537,061 YOY Variance 8% 7% 4% 3% 28% 19% 2% Starts Next 12 & Early Planning 3,419 400,314 602 91,832 964 168,594 1,480 320,687 3,327 391,722 615 95,268 848 151,762 1,313 299,664 14% 11% 13% Total Pipeline 5,011 608,837 1,090 174,442 2,029 388,523 4,098 867,895 4,796 586,102 1,086 175,662 1,679 337,135 3,862 836,725 0% 1% 21% 15% 6% Updated or Q317…Tonya to tick *US numbers are Q317 v Q316. All other regions are Q217 v Q216.

Asia Pacific Construction Pipeline Top Countries YOY by Rooms Q217 Q216 Projects Rooms China 2,410 525,225 2,323 527,933 Indonesia 407 70,241 382 62,486 India 239 37,927 300 45,187 South Korea 160 33,553 149 35,967 Japan 147 30,637 135 25,251 Updated per Paul

Asia Pacific Construction Pipeline Top Cities YOY by Rooms Projects Rooms 124 26.0 137 25.8 120 23.9 113 23.3 113 21.9 81 22.2 93 20.9 122 21.4 104 20.3 95 16.8

Latin America Construction Pipeline Top Countries YOY by Rooms Q217 Q216 Projects Rooms Brazil 311 52,634 375 64,955 Mexico 197 33,569 180 31,212 Colombia 74 10,707 64 9,451 Cuba 26 7,170 12 3,721 Peru 39 5,641 38 5,191 Updated per Paul

Latin America Construction Pipeline Top Cities YOY by Rooms 15 7.4 Projects Rooms 38 7.2 38 7.0 8 6.5 34 6.2 25 4.6 24 4.1 21 3.4 17 2.7 7 1.1

Europe Construction Pipeline Top Countries YOY by Rooms Q217 Q216 Projects Rooms Germany 186 36,556 146 28,759 United Kingdom 230 35,452 228 35,040 Russia 91 16,645 98 19,460 France 109 14,147 94 9,451 Turkey 66 11,164 73 12,114 Updated per Paul

Europe Construction Pipeline Top Cities YOY by Rooms 83 15.0 78 14.1 31 7.8 39 7.1 30 6.0 35 6.3 33 5.8 26 5.3 18 3.6 25 2.6

US Transactions with a Reported Selling Price Q3 2017 K K K K K K K Average Selling Price Per Room (000s) K K K K K K K Updated for Q317 2011 2012 2013 2014 2015 2016 YTD 17 >200 Rooms 130 110 139 175 178 137 101 <200 Rooms 558 486 889 929 1,111 904 585 Total Transactions 688 596 1,028 1,104 1,289 1,041 686

US Lodging Real Estate: Total Investment by Dollars* Q3 2017 As Buyers As Sellers 2015 2016 YTD 2017 Privately Held Companies Equity Funds 7,650 5,098 2,856 12,712 3,603 3,159 Hotel Companies 3,411 4,485 3,114 7,522 4,813 3,326 Individual Owners 2,776 3,682 2,115 2,253 4,302 2,250 Publicly Traded Companies REITs 7,579 2,547 3,497 2,110 2,663 2,011 1,463 459 25 516 409 746 Other Entities All Other Entities 3,190 210 100 955 690 217 Total Dollar Volume 26,068 16,480 11,708 Updated for Q317 * Figures are for Transactions with a Reported Selling Price and dollars are in millions

Spring 2017 Takeaways New hotel pipeline growth has moderated. Only incremental increases expected over the next few quarters. There is a disciplined approach to supply growth today characterized by the attitudes of all parties; developer, lender, franchisor, etc. We will not reach the peak of the last cycle this time around . . . good news. Bouncing around the top of the “maturity” stage of a development cycle is a good thing. . . Sales transactions accelerated tremendously in 3Q17. We expect more of the same in 4Q. If you are an owner, it is still a great time to sell and take your profits given the sales cycle and looming interest rates. JP to re-write

Thank You Come visit our booth to see our new platform! Spring 2017 JP Ford, CHB, ISHC Senior Vice President, Global Director of Business Development Office: +1 603.427.9550 Email: jpford@LodgingEconometrics.com Come visit our booth to see our new platform!