1. Recent Economic and Value Trends for the U.S. Lodging Industry Presented by: Stephen Rushmore, MAI, CHA President and Founder HVS International 516-248-8828 ext. 204 srushmore@hvsinternational.com www.hvsinternational.com srushmore@hvsinternational.com www.hvsinternational.com srushmore@hvsinternational.com www.hvsinternational.com

2. $12,000 $6,000 $5,000 18% 10% 7% $81,000 $69,000 $63,000 2005 2004 2003 Per Room Change Percentage Change Per Room Value $12,000 $1,000 $0Per Room Change 17% 1% 0%Percentage Change $80,000 $68,000 $67,000Per Room Value 2000 1999 1998 $15,000 $8,000 $10,000 $6,000Per Room Change 28% 19% 28% 23%Percentage Change $67,000 $52,000 $44,000 $34,000Per Room Value 1997 1996 1995 1994 ($3,000) -5% $58,000 2002 ($19,000) -23% $61,000 2001 Hotel Value Trends - USA

3. Value Per Room - 2002 1. New York $223,000 2. Las Vegas $187,000 3. Oahu $174,000 4. San Diego $133,000 5. San Francisco$132,000 6. San Antonio $122,000 7. New Orleans $120,000 8. Long Island $103,000 9. Sacramento $ 96,000 10. Boston $ 96,000 Source: HVS International 21. United States $ 58,000

4. 1.New York($159,000) 2.San Francisco ($113,000) 3.Boston ($ 87,000) 4.San Jose ($ 82,000) 5.Chicago($ 46,000) 6.Oahu($ 41,000) 7.Oakland ($ 34,000) 8.Austin ($ 32,000) 9.Orlando ($ 32,000) 10.Dallas ($ 28,000) 1.San Jose ($62,000) 2.San Francisco ($62,000) 3.Oakland ($40,000) 4.Boston($33,000) 5.Long Island($30,000) 6.Austin ($21,000) 7.Chicago ($18,000) 8.Miami ($13,000) 9.Houston ($13,000) 10.New York ($13,000) Change in Value Per Room 20012002 Source: HVS International 18. United States ($ 18,000)31. United States ($ 3,000)

5. 37. Memphis ($5,033) 38.Anaheim ($4,619) 39.Jacksonville ($3,951) 40.Albuquerque ($2,659) 41.San Antonio ($1,942) 42.Tampa ($1,566) 43.Las Vegas ($1,390) 44.Sacramento ($1,240) 45.Salt Lake City ($ 642) 46.Houston $6,838 Change in Value Per Room 2002 Source: HVS International 2001 37. Orlando $ 1,403 38.Jacksonville $ 1,666 39. San Diego $ 2,015 40. Sacramento $ 2,147 41.Philadelphia $ 7,544 42. Las Vegas $ 8,478 43.Baltimore $10,407 44.Oahu $11,119 45.San Antonio $19,506 46.Salt Lake City $34,292

6. 1.San Francisco($175,000) 2.New York ($172,000) 3.San Jose ($144,000) 4.Boston ($120,000) 5.Oakland($ 74,000) 6.Chicago ($ 64,000) 7.Austin ($ 52,000) 8.Long Island ($ 47,000) 9.Dallas ($ 39,000) 10.Miami ($ 34,000) 24. United States($ 21,000) 37.Houston($ 6,000) 38.St. Louis ($ 5,000) 39.Memphis ($ 4,000) 40.Albuquerque ($ 3,000) 41.Jacksonville($ 2,000) 42.Baltimore ($ 500) 43.Sacramento $ 1,000 44.Las Vegas $ 7,000 45.San Antonio $ 18,000 46.Salt Lake City $ 34,000 Change In Value Per Room – 2001 & 2002 Source: HVS International

7. 1988198919901991 26 17 34 32 1992199319941995 11 13 6 3 1996199719981999 11 4 22 26 2000200120022003 10 45 32 16 Number of Markets With Decline in Value Based on 47 Markets

8. 1.New York ($99,840) 2.Long Island ($38,888) 3.Boston ($33,261) 4.Los Angeles ($28,565) 5. Washington,DC ($24,385) 6. Las Vegas ($20,210) 7. Baltimore ($17,703) 8.San Jose ($17,338) 9.San Diego ($16,798) 10.Oahu ($16,323) 14.USA ($12,840) Comparison of Per Room Change in Two Downturn Markets Per Room 2000-2002 Source: HVS International Per Room 1989-1991 1.San Francisco ($175,425) 2.New York ($172,097) 3.San Jose ($144,206) 4.Boston ($120,361) 5. Oakland ($ 73,692) 6.Chicago ($ 64,358) 7.Austin ($ 52,454) 8.Long Island ($ 47,018) 9.Dallas ($ 39,272) 10.Miami ($ 33,952) 14.USA ($ 21,240)

9. 37Salt Lake City $ 4,352 38.Dallas $ 4,906 39.Albuquerque $ 5,503 40.Portland $ 5,767 41.San Antonio $ 7,308 42.Minneapolis $ 7,869 43.Denver $10,026 44.New Orleans $11,339 45.Austin $15,883 46.Houston $16,244 Comparison of Per Room Change in Two Downturn Markets Per Room 2000-2002 Source: HVS International Per Room 1989-1991 37.Houston ($ 5,975) 38.St. Louis ($ 5,263) 39.Memphis ($ 3,866) 40.Albuquerque ($ 2,895) 41.Jacksonville ($ 2,285) 42.Baltimore ($ 442) 43.Sacramento $ 901 44.Las Vegas $ 7,088 45.San Antonio $ 17,564 46.Salt Lake City $ 33,650

10. 1.New York$149,000 2.Oahu $140,000 3.San Francisco $109,000 4.San Diego $ 90,000 5.Las Vegas$ 86,000 6.Washington, DC$ 69,000 7.San Antonio $ 68,000 8.Long Island $ 64,000 9.Miami $ 62,000 10.San Jose $ 58,000 18. United States$ 38,000 37.Denver$18,000 38.Oakland $15,000 39.Ft. Lauderdale $13,000 40.Charlotte$11,000 41.Cincinnati$ 8,000 42.Salt Lake City $ 6,999 43.Austin $ 4,000 44.Dallas $ 4,000 45.Cleveland $ 4,000 46.Detroit $ 3,000 Change in Value Per Room – 2002 - 2006 Source: HVS International

11. 1.Pittsburgh 226% 2.Nashville 180% 3.Chicago 179% 4.Portland 165% 5.Albuquerque158% 6.Kansas City 130% 7.Cincinnati 117% 8.Minneapolis 104% 9.Los Angeles 86% 10.Indianapolis 85% 25. United States 65% 37.Sacramento42% 38.New Orleans40% 39.Boston 37% 40.Ft. Lauderdale30% 41.Oakland25% 42.Dallas 24% 43.Cleveland 21% 44.Detroit13% 45.Salt Lake City 8% 46.Austin 7% Percent Change in Value 2002 - 2006 Source: HVS International

12. 1.Las Vegas2 2.San Antonio2 3.Sacramento2 4.Salt Lake City2 5. San Diego3 6.Baltimore3 7.Jacksonville3 8.Oahu4 9.St. Louis4 10.Memphis4 16.United States5 Number of Years for Values to Recover to 2000 Levels Source: HVS International 30.New York 7+ 31.San Francisco7+ 32.Boston7+ 33.San Jose7+ 34. Austin7+ 35.Oakland7+ 36.Ft. Lauderdale7+ 37.Denver 7+ 38.Atlanta7+ 39. Cleveland7+ 40.Chicago7+ 41.Dallas7+ 42.Charlotte7+ 43.Detroit7+ 44. Cincinnati7+

13. Replacement Costs vs. Value per Room Luxury Market Segment 0 50,000 100,000 150,000 200,000 250,000 300,000 19871988198919901991199219931994199519961997199819992000200120022003200420052006 Luxury Replacement Cost

14. Replacement Costs vs. Value per Room Upscale Market Segment 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 19871988198919901991199219931994199519961997199819992000200120022003200420052006 Upscale Replacement Cost

15. Replacement Costs vs. Value per Room Midprice Market Segment 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 19871988198919901991199219931994199519961997199819992000200120022003200420052006 Midprice Replacement Cost

16. Replacement Costs vs. Value per Room Economy Market Segment 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 19871988198919901991199219931994199519961997199819992000200120022003200420052006 Economy Replacement Cost

17. Source: Smith Travel Research 197564% 1976 66% 8.2% 5.7%1.44 197767% 8.1% 6.5%1.25 197870%14.0% 7.7%1.82 197972%17.0%11.3%1.50 % Change% Change AR/CPI Year Occupancy Av Rate CPI Index 199363% 1994 65% 3.8% 2.6%1.46 199565% 4.8% 2.8%1.71 199665% 6.5% 3.0%2.17 199764% 5.9% 2.3%2.57 199864% 4.6% 1.6%2.88

18. Ten Largest Sales by Price per Room in 2002 Montage Resort & SpaLaguna Beach, CA260$730,000Laguna Beach Resorts Monarch HotelWashington, DC416$353,000Legacy Hotel REIT Box Tree Inn New York, NY 13$307,000252 East 49 (LLC) Eden RocMiami Beach, FL347$277,000Blackacre Capital Hotel Wales New York, NY 87$276,000DLJ Capital RECP II Hyatt Regency Lahaina, HI 837$275,000Blackstone Group The Orchid at Mauna LaniKahola Coast, HI 539$260,000Fairmont Hotels&Resorts La Costa Resort & Spa Carlsbad, CA479$251,000KSL Recreation Corp. British Airways HotelNew York, NY 124$250,000Affiliate Hotel Properties Holiday Inn on the Hill Washington, DC 343$233,000LaSalle Hotel Properties Source: HVS International # of Price Individual Hotel Location Rooms per Room Buyer

19. Rushmore’s Observations It should not get any worse than this. When occupancy starts to recover look for- Transaction volume will rise rapidly Now is the time to position yourself for a strong recovery Economy should recover War is wrapping up Supply growth is slowing Escalating profits Increased property level spending Particularly FF&E Rapid growth in room rate Transactions equate to renovations