1. State of Atlanta: Hotels Peggy Berg, ISHC The Highland Group

2. Times are very good & getting better…  A lot better

3. Sources US and CITYWIDE Statistics from Smith Travel Research Sector information from The Highland Group

4. Atlanta fell harder & longer, but we’re gaining now!

5. Atlanta RevPar Fell Deeper than US; Then UP 8% in 2004

6. Atlanta RevPar Trailing But Gaining Momentum UP 8% YTD

7. Atlanta Occupancy Up 2.7 Points in 2004

8. Atlanta Occupancy Up 2.6 Points Already 2005 YTD

9. Atlanta Rates UP $2.39 in 2004 (1 st Gain in 3 Years)

10. Atlanta Rate YTD Already UP $2.81 by July 2005

11. Atlanta by Sector Downtown: Hit hardest Recovery accelerating New hotels coming on line (boutique and luxury product) Becoming a “world class” destination? Gaining from Katrina

12. Atlanta by Sector Buckhead New Intercontinental; planned St. Regis Condo structure Rates accelerating Space tight for groups already

13. Airport Slammed by 9-11 (still) Low end contracts still in high end hotels (but getting pushed out finally) Picking up Katrina contracts Shifting with completion of I-285 and 5 th runway Public development restrictions

14. Southside I-85 south lots of limited service inventory I-75 south lots of limited service inventory Job growth and I-75 travel boosting demand Better lodging product coming on line

15. Northeast Too many of the wrong rooms New “core” at Sugarloaf performing well Division into the “Haves vs Have Nots” Market picking up overall

16. Northwest Upside with Cumberland improvements Convention business should improve Compression from downtown should improve Need for real renovation or demolition

17. Industry Trends Condos and “Hybrid” lodging products on the high end New brands in the mid market – Indigo, Hyatt Place, Starwood XYZ Upgrades and replacement in the strong brands (Marriott, Holiday Inn, Hilton) Cheaper new construction prototypes in the franchise-proliferation brands

18. The Highland Group 1111 Rosedale Drive Atlanta, GA 30306 (404) 872-4631 www.highland-group.net