Historic Perspective

September 11, 2001 Fear of Travel Economic Recession

MOTT Survey Suburban Boston Occupancy –7 Points Avg Rate – 5% Boston/Cambridge Occupancy –6 Points Avg Rate –5% 2001 Operator Forecasted Declines as a direct result of 9-11

Suburban Boston 2001

Source: Smith Travel Research

Occupancy: 62% (Down 11 Points) Average Rate: $109 (Down 2 Percent) RevPAR: $68 (Down 17 Percent) Suburban Boston 2001

Source: Pinnacle Advisory Group

Boston / Cambridge 2001

Source: Pinnacle Advisory Group

Occupancy: 69% (Down 9.5 Points) Average Rate: $ (Down 7 Percent) RevPAR: $ (Down 18 Percent) Boston / Cambridge 2001

Source: Pinnacle Advisory Group

Suburban Boston 2002

Factors Affecting The Suburban Boston Lodging Market In 2002 New Supply Still Significant (6% vs 8%) Citywide Conventions Worse (15 vs. 17) The Economy Worse Than Expected

Occupancy: Up Two Points to 64 Percent Average Rate: Down 2 Percent to $ RevPAR: Down 1 Percent to $68.73 Suburban Boston 2002

Source: Pinnacle Advisory Group

Boston / Cambridge 2002

Factors Affecting The Boston/Cambridge Market In 2002 Supply Changes Citywide Conventions Non-Citywide Group Demand Corporate Demand Leisure Travelers

Supply Changes No Change In Short-Term 2.4 Percent Increase in Percent increase in 2002 Projects: Hampton Inn Commonwealth Hotel Nine-Zero Embassy Suites Renovation of Ritz Carlton

Citywide Conventions 15 Citywides (Down From 17) Loss Of Seybold will impact April Now 2Q Looks Weak (In addition to 1Q)

Non-Citywide Group Demand In-House Group Pace is now off Pace Improves in 2H 02 (with economy?) Cambridge pace is not expected to improve

Corporate Demand Slow Recovery Lack of compression from groups will limit ability to drive rate No Forecasted Economic Growth Until 2H ‘02

Leisure Demand “All About Rate” Increased Supply in Suburbs Decline In International Travel

Occupancy: Up 1 Point to 70 Percent Average Rate: Up 1 Percent to $189 RevPAR: Up 3 Percent to $131 Boston / Cambridge 2002

Source: Pinnacle Advisory Group