1. Pinnacle Advisory Group
Rachel J. Roginsky, ISHC
Pinnacle Advisory Group
76 Canal Street
Boston, MA 02114
Telephone: Fax:
Outlook 2004
Pinnacle Realty Investments
Pinnacle Advisory Group

2. National Lodging Market
Top 25 Markets – 2002
Total U.S. Market Through April 2003
National Projections

3. National Lodging Market
Top 25 Markets – 2002

4. Top 25 Markets Room Supply Percent Change - 2002
INDUSTRY AVERAGE 1.8 %
Source: Smith Travel Research / Pinnacle Advisory Group

5. Top 25 Markets ADR Percent Change - 2002
INDUSTRY AVERAGE %
Source: Smith Travel Research / Pinnacle Advisory Group

6. Top 25 Markets Occupancy 2002 Source: Smith Travel Research
INDUSTRY AVERAGE %
Source: Smith Travel Research

7. Top 25 Markets RevPAR 2002
Source: Smith Travel Research / Pinnacle Advisory Group

8. National Lodging Market
Total U.S. Market Through April 2003

9. Total United States Room Supply/Demand Percent Change Twelve Month Moving Average To April 2003
Source: Smith Travel Research / Pinnacle Advisory Group

10. Total United States Occupancy and ADR Twelve Month Moving Average To Apr 2003
Source: Smith Travel Research / Pinnacle Advisory Group

11. Total United States Key Performance Indicators Percent Change Twelve Months Ending April
Source: Smith Travel Research / Pinnacle Advisory Group

12. Chain Scales Occupancy/ADR Percent Change Twelve Months Ended April 2003
Source: Smith Travel Research / Pinnacle Advisory Group

13. National Lodging Market
National Projections

14. U.S. Lodging Outlook * Supply Growth Significantly Lower
* Demand Lags, Then Recovers
* Occupancy Flat
* Pressure on Room Rates
* Slow RevPAR Growth
* Potential Threat – War/Terrorism

15. Total United States Supply/Demand Percent Change 1996 – 2003P
Source: Smith Travel Research / Pinnacle Advisory Group

16. Total United States Occupancy Percent 1996 – 2003P
Source: Smith Travel Research / Pinnacle Advisory Group

17. Total United States Average Daily Rate 1996 – 2003P
Source: Smith Travel Research / Pinnacle Advisory Group

18. Total United States RevPAR Percent Change 1996 – 2003P
Source: Smith Travel Research / Pinnacle Advisory Group

19. New England Lodging Market

20. New England Occupancy - 2002
Source: Smith Travel Research / Pinnacle Advisory Group

21. New England Average Daily Rate – 2002
Source: Smith Travel Research / Pinnacle Advisory Group

22. New England RevPAR – 2002
Source: Smith Travel Research / Pinnacle Advisory Group

23. New England Change in Performance - 2002
Source: Smith Travel Research / Pinnacle Advisory Group

24. New England Change in Performance – YTD June 2003
Source: Smith Travel Research / Pinnacle Advisory Group

25. Suburban Boston Lodging Market
Statistics
Projections

26. Suburban Boston Lodging Market
Statistics

27. Suburban Boston Statistics

28. Suburban Boston Occupancy 1995-2002
Source: Smith Travel Research / Pinnacle Advisory Group

29. Suburban Boston Average Room Rate 1995 - 2002
Source: Smith Travel Research / Pinnacle Advisory Group

30. Suburban Boston RevPAR 1995 - 2002
Source: Smith Travel Research / Pinnacle Advisory Group

31. Suburban Boston Lodging Supply 1995 - 2002
Source: Smith Travel Research / Pinnacle Advisory Group

32. Suburban Boston Occupancy YTD June 2001 - 2003
Source: Smith Travel Research / Pinnacle Advisory Group

33. Suburban Boston Average Daily Rate YTD 2001 - 2003
Source: Smith Travel Research / Pinnacle Advisory Group

34. Suburban Boston RevPAR YTD 2001 - 2003
Source: Smith Travel Research / Pinnacle Advisory Group

35. Suburban Boston Lodging Market
Projections

36. Suburban Boston 2003 Continued Lack of Overflow from Boston
Major Demand Generators Report only limited increases in demand
Shorter Booking Window
New Supply Less but Still a Factor
Pent-up demand

37. Pinnacle Projections Suburban Boston 2003
2002
2003
Change
Occupancy
58.3%
55.0%
-5.7%
Average Rate
$97.20
$92.75
-4.6%
RevPAR
$56.69
$51.01
-10.0%

38. Suburban Boston 2004 Stronger Convention Year for Boston
Improving economy
Limited New Supply
Stable Geopolitical Situation
Weak Dollar

39. Pinnacle Projections Suburban Boston 2004
2002
2003
Change
Occupancy
55.0%
57.0%
3.6%
Average Rate
$92.75
$93.75
1.1%
RevPAR
$51.01
$53.44
4.8%

40. Boston / Cambridge Lodging Market
Statistics
New Supply
Demand Trends
Projections

41. Boston / Cambridge Lodging Market
Statistics

42. Boston / Cambridge Occupancy 1989 – 2002
Source: Pinnacle Advisory Group

43. Boston / Cambridge Average Room Rate 1989-2002
Source: Pinnacle Advisory Group

44. Boston / Cambridge RevPAR 1989-2002
Source: Pinnacle Advisory Group

45. Boston / Cambridge Lodging Supply 1989 - 2002
Source: Pinnacle Advisory Group

46. Boston / Cambridge Occupancy YTD June 2001-2003
Source: Pinnacle Advisory Group

47. Boston / Cambridge Average Room Rate YTD June 2001-2003
Source: Pinnacle Advisory Group

48. Boston / Cambridge RevPAR YTD June 2001-2003
Source: Pinnacle Advisory Group

49. Boston / Cambridge Change in RevPAR 1996 – YTD June 2003
Source: Pinnacle Advisory Group

50. Boston / Cambridge Change in Performance By Market Area - 2002
Source: Pinnacle Advisory Group

51. Boston / Cambridge Change in Performance By Market Area – YTD June 2003
Source: Pinnacle Advisory Group

52. Boston / Cambridge Lodging Market
New Supply

53. Boston / Cambridge New Supply 2003
Embassy Suites - Airport – 273 Rooms - April
Residence Inn – Charlestown – 168 Rooms – May
Hotel Marlowe – E. Cambridge – 236 Rooms – May
Commonwealth Hotel – Kenmore Square Rooms - May
Courtyard Hotel – Back Bay Rooms -September/October

54. Boston / Cambridge New Supply 2004
Hotel Onyx – N. Station – 112 Rooms – Winter/Spring
Jurys Doyle – Back Bay – 220 Rooms – Spring
Clarion – N. Station – 88 Rooms – Summer
Hampton Inn and Suites – Crosstown – 175 Rooms – Summer

55. Boston / Cambridge Lodging Market
Demand Trends

56. Boston / Cambridge Demand Trends
Declining Corporate Demand
Economy
Geopolitical Situation
Declining Group Demand
Weak Corporate Demand
Off Convention Years
Declining Airline Crew Demand
Airline Industry Woes

57. Boston / Cambridge Demand Trends
Increasing Leisure Demand
“Buying” Demand Through Lower Rates
Increasing Use of the Internet
Increasing Government Demand
Increased Per Diem
Homeland Security

58. Factors Affecting Boston / Cambridge Performance vs
Factors Affecting Boston / Cambridge Performance vs. National Performance
Stronger Supply Increases
Heavy Reliance on Technology and Financial Services Industries
Popular Destination with International Travelers

59. Boston / Cambridge Lodging Market
Projections

60. Factors Affecting Demand 2H 2003
Fewer Conventions than 2H 2002
New Supply
Shorter Booking Window
Improving Economy
More Stable Geopolitical Situation
Weak Dollar

61. Pinnacle Operators Survey 2003
18 Hotels, 7,900 Rooms
Occupancy
Down 2.4 Points
Average Rate
Down 7.3 Percent
RevPAR
Down 10.2 Percent

62. Pinnacle Projections Boston / Cambridge 2003
2002
2003
Change
Occupancy
72.3%
68.8%
-4.8%
Average Rate
$165.04
$151.84
-8.0%
RevPAR
$119.32
$104.46
-12.4%

63. Factors Affecting Demand 2004
Strong Convention Year
New Supply
Improving Economy
More Stable Geopolitical Situation
Weak Dollar
MOTT Budget Reduction

64. Pinnacle Operators Survey 2004
18 Hotels, 7,900 Rooms
Occupancy
Up 1.4 Points
Average Rate
Up 2.5 Percent
RevPAR
Up 4.8 Percent

65. Pinnacle Projections Boston / Cambridge 2004
2003
2004
Change
Occupancy
68.8%
70.5%
2.5%
Average Rate
$151.84
$155.63
RevPAR
$104.46
$109.72
5.0%

66. Pinnacle Advisory Group
Rachel J. Roginsky, ISHC
Pinnacle Advisory Group
76 Canal Street
Boston, MA 02114
Telephone: Fax:
Outlook 2004
Pinnacle Realty Investments
Pinnacle Advisory Group