1. Russell Kett Managing Director HVS – London Amsterdam – 16 January 2008 European Hotel Sector Review of 2007

2. Key Trends for European Hotels ● Occupancy and room rate ● Hotel valuation ● Transactions

3. Europe – Still the RevPAR King Sources: HotelBenchmark™ by Deloitte; Smith Travel Research Seasonally Adjusted RevPAR $115 $103 $99 $64 €87

4. European hotel occupancy %

5. European hotel ADR €

6. Hotel RevPAR 2006-07 YTD Nov (€) 0% to -10%0%-5%5%-10%10% -15%15%-20% FrankfurtAmsterdamAthensBarcelona PragueBerlinGenevaBrussels RomeBudapestMadridLisbon DublinParisLondon MilanMoscow Stockholm Vienna Warsaw Source: HotelBenchmark TM Zurich

7. Key Trends for European Hotels ● Occupancy and room rate ● Transactions ● Hotel valuation

8. Hotel investment volumes (€m)

9. European single asset transactions

10. Buyer categories 2006 (€m)

11. Key portfolio transactions – 2006 PortfolioBuyerPrice €mRoom € Hilton GroupHilton Hotels Corp4,767-- Marriott (47 UK)Delek1,671195,000 De Vere (35 UK)Alternative Hotel Gp1,073229,000 Travelodge (229 UK)Dubai Int’l Capital97757,000 Starwood (5 Europe)Host Hotels762291,000 Hospitality Europe (8)Blackstone Group650201,000

12. Key portfolio transactions – 2007 PortfolioBuyerPrice €mRoom € Hilton Hotels Corp (2,800 hotels) Blackstone Group19,043-- Marriott (47 UK)Quinlan Private1,619190,500 Jury’s Inns (20 UK, Eire)Quinlan Private1,165241,000 Accor (91 Germany)Moorpark86372,000 Scandic Hotels (132)EQT833-- Accor (30 UK)Land Securities711142,000

13. Key single asset transactions – 2006 HotelBuyerPrice €kRoom € Hotel Lancaster, Paris – 60 rooms Hospes Hotels48,000800,000 Four Seasons, Milan – 118 rooms Statuto Group200,0001,695,000 Hotel Arts, Barcelona – 483 rooms Host Hotels417,000863,000 Great Eastern, London – 267 rooms Global Hyatt / JER Partners 217,200813,000 Marriott Park Lane, London – 157 rooms Bahrain Royal Family151,400964,300 Blakes Hotel, London – 49 rooms Sir Mark Weinberg33,400681,400

14. Key single asset transactions – 2007 HotelBuyerPrice €kRoom € Crowne Plaza, London City – 203 rooms Statuto Group123,000606,200 St David’s Hotel & Spa, Cardiff – 132 rms Principal Hotels43,400374,100 Forte Village, Sardinia – 758 rooms FIMIT312,000411,600 Dolce Chantilly, Paris – 200 rooms Banimmo Real Estate45,000225,000 Nikko Hotel, Dusseldorf – 301 rooms Benson Elliott Capital114,000378,700 Caledonian Hilton, Edinburgh – 251 rooms Farnsworth76,500772,700

15. Key Trends for European Hotels ● Occupancy and room rate ● Transactions ● Hotel valuation

16. Value trends – winners & ‘losers’ 2006

17. Values – Top 10 European cities €/room 20052006 London516,100London576,700 Paris484,500Paris528,200 Milan415,800Milan467,000 Zurich376,000Zurich413,800 Geneva340,100Geneva365,800 Rome288,500Edinburgh319,600 Edinburgh285,200Rome311,000 Amsterdam261,000Amsterdam304,000 Prague248,800Moscow290,500 Moscow241,200Prague252,300

18. Outlook and Expectations ● Most locations – RevPAR growth, now mainly rate driven, profits up, values up… ● Strong buyer demand prevails – yields unlikely to fall further – now is a great time to sell… ● Pre-”crunch” – sale prices might have risen because of increased projected earnings… ● Expectation of current buyers is to sell in 3-5 years’ time – who will those buyers be…? ● Issues – debt provision, human capital, sustainability – but… – Effect of current market turmoil? – Have we reached the end of the cycle?

19. “Credit Crunch” – Today’s Update… ●US investment market, CMBS – stagnant, nervous ●Middle East – no effect yet ●Deals in Europe – many stalling, few completed ●Larger ones – longer to come to fruition ●Quality assets & operators – interest prevails, little or no impact so far ●Secondary assets / larger portfolios – tougher ●Banks – reducing LTVs 5%–10% points ●Interest rates up 50–90 bp’s ●Yields moving out by 0.25%–1% ●Short term issue – 3-6 months…?

20. Thank you! Russell Kett Managing Director HVS International 7-10 Chandos Street Cavendish Square London W1G 9DQ Tel: 020 7878 7700 Fax: 020 7878 7799 rkett@hvs.com www.hvs.com