2. Sick Patient or Post-Mortem? Diagnosing the Canadian Hotel Investment Industry What Will It Take To Survive? Moderator: Lyle Hall, HLT Advisory Inc. Panel: David Larone, Director, PKF Consulting Inc Betsy MacDonald, Managing Director, HVS Abid J. Gilani, SVP Treasury, Marriott International Chuck Henry, President, Hotel Capital Advisers, Inc. Craig Wright, Senior VP & Chief Economist, RBC Capital Markets - Real Estate Group Moderator: Lyle Hall, HLT Advisory Inc. Panel: David Larone, Director, PKF Consulting Inc Betsy MacDonald, Managing Director, HVS Abid J. Gilani, SVP Treasury, Marriott International Chuck Henry, President, Hotel Capital Advisers, Inc. Craig Wright, Senior VP & Chief Economist, RBC Capital Markets - Real Estate Group

3. Craig Wright Craig Wright SVP & Chief Economist

4. 3-month TED Spread* 0 0 50 100 150 200 250 300 350 400 2002 2003 2004 2005 2006 2007 2008 2009 Source: Federal Reserve Board Basis points *3-month LIBOR rate - 3-month T-bill

5. World GDP Growth 1 1 3 3 5 5 7 7 9 9 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 % change, year-over-year Forecast Source: International Monetary Fund, RBC Economics Research

6. Canadian and U.S. Real GDP -8 -6 -4 -2 0 0 2 2 4 4 6 6 8 8 10 00 01 02 03 04 05 06 07 08 09 10 Quarter-over-quarter annualized % change Canada U.S Source: Statistics Canada, Bureau of Economic Analysis, RBC Economics Research Forecast Annual Growth Rates '07 '08 '09F ’10F Canada2.70.5-1.42.6 U.S.2.01.1-2.42.2

7. Unemployment rate 3 5 7 9 11 13 15 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 Canada U.S. % % Source: Bank of Canada, Bureau of Labor Statistics, RBC Economics Research U.S. long-term average: 6.0 Canada long-term average: 8.7 Forecast

8. Federal Government Budgetary Balance Billions of dollars -30.0 -8.7 3.0 5.8 14.3 19.9 8.0 6.6 9.1 1.5 13.2 13.8 9.6 -1.1 -33.7 -29.8 -13.0 -7.3 0.7 95-96 97-98 99-00 01-02 03-04 05-06 07-08 09-10 11-12 13-14 0.0 10.0 20.0 30.0 -10.0 -20.0 -30.0 -40.0 Source: Department of Finance,, RBC Economics Research Federal budget projection

9. Canadian and U.S. Central Bank Policy Target Rates 0 1 2 3 4 5 6 7 0001020304050607080910 % 0 1 2 3 4 5 6 7 % BoC overnight rate Fed funds rate Source: Bank of Canada, Federal Reserve Board, RBC Economics Research Forecast

10. Real GDP Growth -3 -2 0 0 1 1 2 2 3 3 4 4 ALTA. ONT. B.C. CANADA NFLD. P.E.I. N.B. QUE. N.S. MAN. SASK. 2009 2010 % change, ranked by 2009 growth Source: RBC Economics Research

11. Recession: Then and Now (% Change, Peak to Trough) 1980's1990'sToday U.S. GDP -2.7-1.3-1.8 Canadian GDP -4.9-1.5-0.8 Housing Starts -19.2-18.2-35.7 Employment-5.0-3.5-1.7 Unemployment rate (diff.) 5.7ppts4.6ppts1.4ppts

12. The material contained in this report is the property of Royal Bank of Canada and may not be reproduced in any way, in whole or in part, without express authorization of the copyright holder in writing. The statements and statistics contained herein have been prepared by RBC Economics Research based on information from sources considered to be reliable. We make no representation or warranty, express or implied, as to its accuracy or completeness. This publication is for the information of investors and business persons and does not constitute an offer to sell or a solicitation to buy securities.