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 – 2005P Life is good !

U.S. Lodging Industry - Key Statistics Latest 12 Months - January 2006 % Change Hotels 47, % Rooms4.4mm 0.3% Occupancy63.3% 2.9% A.D.R. $ % RevPar$ % Room Revenue$94B 9.0%

Total United States Room Supply/Demand Percent Change Twelve Month Moving Average – 1989 to January 2006 Cyclicality Clearly Visible – Recent S/D Imbalance Spells Opportunity 0.3% 3.3%

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, RevPAR Twelve Month Moving Average – 1989 to January 2006 $86.36 $ % 63.3% Robust OCC and ADR Gains post 9/11

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 RevPAR/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 % Change Hotels3, % Room Nights214.6 m-1.8% Demand m-0.8% Occupancy66.7% 1.1% ADR$ % RevPAR $ % Room Rev$18.3 b 5.2%

Resort Locations Room Supply/Demand Percent Change Twelve Month Moving Average – 1989 to January 2006 Supply Increase Used to be Somewhat Constant – Until 9/ % -1.8%

Resort Locations Room Demand Percent Change Peaks Twelve Month Moving Average – 1989 to January 2006 Demand Peaks Every 48 months – Or Does it? 48 months 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 July 1997: 69.1% OCC & ADR Rebound after 9/11 – but OCC still has a way to go July 2001: $115 Jan 2006: $127 Jan 2006: 66.7%

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

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

Resorts Group vs. Transient ADR Group Rate Growth Lags Transient Rate Growth

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

Resorts Day of Week ADR – Transient 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 % Change Hotels % Room Nights57.7m- 0.5 % Demand 38.8 m1.2 % Occupancy67.3%1.7 % ADR$ % RevPAR $ % Room Rev $7.1 b7.6 % 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 Segment Always Attracts New Supply – Except in the Most Recent Past 1.2% -0.5%

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 Still Room For Improvement Post 9/11 in Both Measures May 1997: 70.6% July 2001: $171 Jan 2006: $182 Jan 2006: 67.3%

Destination Resorts Monthly Occupancy 2000 vs In the Off Season, Year 2000 Still Is the Benchmark To Beat 76.8% 75.8%

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

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

Destination Resorts Day of Week Analysis – ADR 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 Source: STR Condotel Pipeline, part of the STR / TWR / Dodge Construction Pipeline 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% Timeshare Rooms: 1,360 1% * Some projects have not yet reported room counts

Total U.S. Top 10 Condotel MSAs March 2006

Annual Occupancy Total US vs. Condo Hotels vs. Destination Resorts %

Annual ADR 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 A2006F2007F Real GDP+3.6%+3.4%+3.0% CPI (= Inflation)+3.4%+2.9%+2.4% Corporate Profits %+9.5% +4.6% Disp Personal Income +1.5% +3.5% +3.2% Unemployment Rate 5.1% 4.8% 4.7%

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

Total United States Occupancy Percent Change 2002 – 2006P

Total United States Occupancy Percent 2002 – 2006P

Total United States ADR Percent Change 2002 – 2006P

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

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

Total United States RevPAR Percent Change 2002 – 2006P

Thank You for Your Attention!