Recent Economic and Value Trends for the U.S. Lodging Industry Presented by: Stephen Rushmore, MAI, CHA President and Founder HVS International ext

$12,000 $6,000 $5,000 18% 10% 7% $81,000 $69,000 $63, Per Room Change Percentage Change Per Room Value $12,000 $1,000 $0Per Room Change 17% 1% 0%Percentage Change $80,000 $68,000 $67,000Per Room Value $15,000 $8,000 $10,000 $6,000Per Room Change 28% 19% 28% 23%Percentage Change $67,000 $52,000 $44,000 $34,000Per Room Value ($3,000) -5% $58, ($19,000) -23% $61, Hotel Value Trends - USA

Value Per Room New York $223, Las Vegas $187, Oahu $174, San Diego $133, San Francisco$132, San Antonio $122, New Orleans $120, Long Island $103, Sacramento $ 96, Boston $ 96,000 Source: HVS International 21. United States $ 58,000

1.New York($159,000) 2.San Francisco ($113,000) 3.Boston ($ 87,000) 4.San Jose ($ 82,000) 5.Chicago($ 46,000) 6.Oahu($ 41,000) 7.Oakland ($ 34,000) 8.Austin ($ 32,000) 9.Orlando ($ 32,000) 10.Dallas ($ 28,000) 1.San Jose ($62,000) 2.San Francisco ($62,000) 3.Oakland ($40,000) 4.Boston($33,000) 5.Long Island($30,000) 6.Austin ($21,000) 7.Chicago ($18,000) 8.Miami ($13,000) 9.Houston ($13,000) 10.New York ($13,000) Change in Value Per Room Source: HVS International 18. United States ($ 18,000)31. United States ($ 3,000)

37. Memphis ($5,033) 38.Anaheim ($4,619) 39.Jacksonville ($3,951) 40.Albuquerque ($2,659) 41.San Antonio ($1,942) 42.Tampa ($1,566) 43.Las Vegas ($1,390) 44.Sacramento ($1,240) 45.Salt Lake City ($ 642) 46.Houston $6,838 Change in Value Per Room 2002 Source: HVS International Orlando $ 1, Jacksonville $ 1, San Diego $ 2, Sacramento $ 2, Philadelphia $ 7, Las Vegas $ 8, Baltimore $10, Oahu $11, San Antonio $19, Salt Lake City $34,292

1.San Francisco($175,000) 2.New York ($172,000) 3.San Jose ($144,000) 4.Boston ($120,000) 5.Oakland($ 74,000) 6.Chicago ($ 64,000) 7.Austin ($ 52,000) 8.Long Island ($ 47,000) 9.Dallas ($ 39,000) 10.Miami ($ 34,000) 24. United States($ 21,000) 37.Houston($ 6,000) 38.St. Louis ($ 5,000) 39.Memphis ($ 4,000) 40.Albuquerque ($ 3,000) 41.Jacksonville($ 2,000) 42.Baltimore ($ 500) 43.Sacramento $ 1, Las Vegas $ 7, San Antonio $ 18, Salt Lake City $ 34,000 Change In Value Per Room – 2001 & 2002 Source: HVS International

Number of Markets With Decline in Value Based on 47 Markets

1.New York ($99,840) 2.Long Island ($38,888) 3.Boston ($33,261) 4.Los Angeles ($28,565) 5. Washington,DC ($24,385) 6. Las Vegas ($20,210) 7. Baltimore ($17,703) 8.San Jose ($17,338) 9.San Diego ($16,798) 10.Oahu ($16,323) 14.USA ($12,840) Comparison of Per Room Change in Two Downturn Markets Per Room Source: HVS International Per Room San Francisco ($175,425) 2.New York ($172,097) 3.San Jose ($144,206) 4.Boston ($120,361) 5. Oakland ($ 73,692) 6.Chicago ($ 64,358) 7.Austin ($ 52,454) 8.Long Island ($ 47,018) 9.Dallas ($ 39,272) 10.Miami ($ 33,952) 14.USA ($ 21,240)

37Salt Lake City $ 4, Dallas $ 4, Albuquerque $ 5, Portland $ 5, San Antonio $ 7, Minneapolis $ 7, Denver $10, New Orleans $11, Austin $15, Houston $16,244 Comparison of Per Room Change in Two Downturn Markets Per Room Source: HVS International Per Room Houston ($ 5,975) 38.St. Louis ($ 5,263) 39.Memphis ($ 3,866) 40.Albuquerque ($ 2,895) 41.Jacksonville ($ 2,285) 42.Baltimore ($ 442) 43.Sacramento $ Las Vegas $ 7, San Antonio $ 17, Salt Lake City $ 33,650

1.New York$149,000 2.Oahu $140,000 3.San Francisco $109,000 4.San Diego $ 90,000 5.Las Vegas$ 86,000 6.Washington, DC$ 69,000 7.San Antonio $ 68,000 8.Long Island $ 64,000 9.Miami $ 62, San Jose $ 58, United States$ 38, Denver$18, Oakland $15, Ft. Lauderdale $13, Charlotte$11, Cincinnati$ 8, Salt Lake City $ 6, Austin $ 4, Dallas $ 4, Cleveland $ 4, Detroit $ 3,000 Change in Value Per Room – Source: HVS International

1.Pittsburgh 226% 2.Nashville 180% 3.Chicago 179% 4.Portland 165% 5.Albuquerque158% 6.Kansas City 130% 7.Cincinnati 117% 8.Minneapolis 104% 9.Los Angeles 86% 10.Indianapolis 85% 25. United States 65% 37.Sacramento42% 38.New Orleans40% 39.Boston 37% 40.Ft. Lauderdale30% 41.Oakland25% 42.Dallas 24% 43.Cleveland 21% 44.Detroit13% 45.Salt Lake City 8% 46.Austin 7% Percent Change in Value Source: HVS International

1.Las Vegas2 2.San Antonio2 3.Sacramento2 4.Salt Lake City2 5. San Diego3 6.Baltimore3 7.Jacksonville3 8.Oahu4 9.St. Louis4 10.Memphis4 16.United States5 Number of Years for Values to Recover to 2000 Levels Source: HVS International 30.New York San Francisco7+ 32.Boston7+ 33.San Jose Austin7+ 35.Oakland7+ 36.Ft. Lauderdale7+ 37.Denver Atlanta Cleveland7+ 40.Chicago7+ 41.Dallas7+ 42.Charlotte7+ 43.Detroit Cincinnati7+

Replacement Costs vs. Value per Room Luxury Market Segment 0 50, , , , , , Luxury Replacement Cost

Replacement Costs vs. Value per Room Upscale Market Segment 0 20,000 40,000 60,000 80, , , , Upscale Replacement Cost

Replacement Costs vs. Value per Room Midprice Market Segment 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90, , Midprice Replacement Cost

Replacement Costs vs. Value per Room Economy Market Segment 0 10,000 20,000 30,000 40,000 50,000 60,000 70, Economy Replacement Cost

Source: Smith Travel Research % % 8.2% 5.7% % 8.1% 6.5% %14.0% 7.7% %17.0%11.3%1.50 % Change% Change AR/CPI Year Occupancy Av Rate CPI Index % % 3.8% 2.6% % 4.8% 2.8% % 6.5% 3.0% % 5.9% 2.3% % 4.6% 1.6%2.88

Ten Largest Sales by Price per Room in 2002 Montage Resort & SpaLaguna Beach, CA260$730,000Laguna Beach Resorts Monarch HotelWashington, DC416$353,000Legacy Hotel REIT Box Tree Inn New York, NY 13$307, East 49 (LLC) Eden RocMiami Beach, FL347$277,000Blackacre Capital Hotel Wales New York, NY 87$276,000DLJ Capital RECP II Hyatt Regency Lahaina, HI 837$275,000Blackstone Group The Orchid at Mauna LaniKahola Coast, HI 539$260,000Fairmont Hotels&Resorts La Costa Resort & Spa Carlsbad, CA479$251,000KSL Recreation Corp. British Airways HotelNew York, NY 124$250,000Affiliate Hotel Properties Holiday Inn on the Hill Washington, DC 343$233,000LaSalle Hotel Properties Source: HVS International # of Price Individual Hotel Location Rooms per Room Buyer

Rushmore’s Observations It should not get any worse than this. When occupancy starts to recover look for- Transaction volume will rise rapidly Now is the time to position yourself for a strong recovery Economy should recover War is wrapping up Supply growth is slowing Escalating profits Increased property level spending Particularly FF&E Rapid growth in room rate Transactions equate to renovations