Source: 2011 Smith Travel Research, Inc. Hotel InduSTRy Overview Vail R. Brown Vice President, Global Sales & Marketing

Source: 2011 Smith Travel Research, Inc. Agenda: 18 May 2011  U.S. Hotel Performance  Indiana Hotel Performance  Indiana Markets & Beyond  Outlook

Source: 2011 Smith Travel Research, Inc. U.S. Hotel Performance 2011 – So far, so … blah

Source: 2011 Smith Travel Research, Inc. Total U.S.: Key Statistics 1 st Quarter 2011 % Change Hotels 52k Room Supply432 mm 1.0% Room Demand237 mm 6.7% Occupancy54.9% 5.7% A.D.R. $99 3.1% RevPAR$55 9.0% Room Revenue$23.6 bn10.0% ADR Finally Contributing to RevPAR Growth

Source: 2011 Smith Travel Research, Inc. Demand Leads ADR….Swings Get More Extreme -6.9% -4.7% -0.9% -4.6% -0.2% -8.7% 1.6% Total U.S.: ADR & Demand % Change Twelve Month Moving Average : Jan – March 2011

Source: 2011 Smith Travel Research, Inc. 41 Months 30 Months Total U.S.: Actual ADR Twelve Month Moving Average: Jan – March 2011 Absolute ADR Will Not Recover for At Least 2 Years -$3.70 -$10.60

Source: 2011 Smith Travel Research, Inc. Hopeful ADR growth will continue to drive RevPAR growth Total U.S. Low Growth Forecast High Growth Supply Demand Occupancy ADR RevPAR Total U.S. Outlook

Source: 2011 Smith Travel Research, Inc. Indiana Overview

Source: 2011 Smith Travel Research, Inc. Indiana: Key Statistics 1 st Quarter 2011 %Change Hotels961 Rooms85,285 STR Sample76.2% Occupancy46.5% 4.6% ADR$ % RevPAR$ % Room Revenue $271.4M 9.9% State’s RevPAR driven by OCC & ADR…good thing.

Source: 2011 Smith Travel Research, Inc. Indiana: Supply & Demand % Change Twelve Month Moving Average: Jan – March 2011 Historically: Builds Into Downturns…

Source: 2011 Smith Travel Research, Inc. Indiana: Active Development Pipeline March 2011 PhasePropertiesRooms In Construction10895 Final Planning121,196 Planning312,936 Active Pipeline535,027 Pre-Planning151,389 Total686,416 IF All Active Pipeline Opens…over 5.5% Room Supply Increase!

Source: 2011 Smith Travel Research, Inc. Indiana: OCC & ADR % Change Twelve Month Moving Average: Jan – March 2011 OCC Growth is Back…ADR Growth much Slower!?

Source: 2011 Smith Travel Research, Inc. 31 Months Indiana: Actual ADR ($) Twelve Month Moving Average: Jan – March 2011 ADR discounts not as extreme as U.S…BUT still takes time! -$4.81

Source: 2011 Smith Travel Research, Inc. Indiana Segments Customer Segmentation: o Transient – Third party, rack rate, government rate, etc. o Group – Rooms booked in blocks of 10 or more. Combine Chain Class: Aggregate of branded hotels & independents. o Luxury/Upper Upscale/Upscale o UpperMidscale/Midscale/Economy

Source: 2011 Smith Travel Research, Inc. Transient Demand back since 1Q 2010…ADR Growth? Indiana: Transient Room Demand & ADR % Change By Month: Jan – March 2011

Source: 2011 Smith Travel Research, Inc. Group Demand & ADR Growth pretty in-sync…A good thing. Indiana: Group Room Demand & ADR % Change By Month: Jan – March 2011

Source: 2011 Smith Travel Research, Inc STR Chain Segments Selected Brands from each segment Luxury – Four Seasons, Ritz Carlton, Fairmont, InterContinental Upper Upscale – Hyatt, Embassy Suites, Hilton, Marriott Upscale – Hyatt Place, Hilton Garden Inn, Courtyard, Hotel Indigo Upper Midscale – Best Western PLUS/Premier, Hampton Inn, Fairfield Inn Midscale – Best Western, Country Inn & Suites, La Quinta Inn, Sleep Inn Economy – America’s Best Inn, Econolodge, Red Roof, Days Inn

Source: 2011 Smith Travel Research, Inc. Appears to be a Top Down Recovery… Indiana: Combine Chain Class Demand % Change by Month through March 2011

Source: 2011 Smith Travel Research, Inc. ADR Data is “Less Bad”…need consistent growth. Indiana: Combine Chain Class ADR % Change by Month through March 2011

Source: 2011 Smith Travel Research, Inc. Indiana Markets & Beyond….

Source: 2011 Smith Travel Research, Inc. Indy new room supply leader… Indiana Markets: Room Supply % Change 12 Month Moving Average Jan – March 2011

Source: 2011 Smith Travel Research, Inc. Good News: Strong room demand across the board! Indiana Markets: Room Demand % Change 12 Month Moving Average Jan – March 2011

Source: 2011 Smith Travel Research, Inc. Indiana Markets & Sub-Markets: Occupancy & % Change 1 st Quarter % 8.7% 2.3% 2.5% 3.3% Indy highest OCC % but Gary MSA largest OCC Growth

Source: 2011 Smith Travel Research, Inc. Indiana Markets & Sub-Markets: Actual ADR & % Change 1 st Quarter % 3.4% 4.2% 7.0% 2.1% 2.8% Strong ADR Growth for Evansville-Henderson MSA

Source: 2011 Smith Travel Research, Inc Outlook …What May Be

Source: 2011 Smith Travel Research, Inc. Total U.S.: Supply/Demand % Change 2005 – 2012P Minimal Supply Growth in 2012

Source: 2011 Smith Travel Research, Inc. Total U.S. & Chain Scale: 2012 Outlook Occupancy (% chg) ADR (% chg) RevPAR (%chg) Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Independent Total U.S : Hit RevPAR peaks of 2006 (hopefully!)

Source: 2011 Smith Travel Research, Inc. Occupancy hitting 60%+ Remains Elusive Total U.S.: Annual Occupancy % 2005 – 2012P

Source: 2011 Smith Travel Research, Inc. What If since 2000 ADR had increased by CPI each year? Note: 2011 & 2012 CPI forecast from Blue Chip Economic Indicators Total U.S.: Annual ADR 2000 – 2012P

Source: 2011 Smith Travel Research, Inc. Takeaways New Hotel Supply Muted in ‘11 & ‘12 Demand Rebounds (Strongly) ADR Growth Started Strong…Keep It Up!? Indiana Transient Rate Growth Needed

Source: 2011 Smith Travel Research, Inc. Thank you! For a copy of this presentation go to