smith travel research presentation

US and MarylandLodging Overview

Steve Hood, Senior VP

SMITH TRAVEL RESEARCH

Agenda

• Total US Overview

• Maryland Overview

• US Projections

Total US Overview

Europe €H1 08 YE 08 09 YTD -0.4% -5.1% -20.0%

ME & A $H1 08 YE 08 09 YTD25.7% 14.8% -18.2%

Asia Pacific $H1 08 YE 08 09 YTD12.5% 2.9% -26.0%

Americas $H1 08 YE 08 09 YTD 4.2% -0.4% -20.6%

UK £H1 08 YE 08 09 YTD 2.5% -0.4% -11.1%

Global - RevPAR Percent Change July 2009 YTD

USA $H1 08 YE 08 09 YTD 1.7% -1.8% -18.2%

98.41

67.4062.5

107.90

143.3147.9

55.1256.0

25

50

75

100

125

150

Supply (millionrooms)

Occupancy YTD ADR YTD RevPAR YTD

Jul-08 Jul-09

Total US - Key Performance IndicatorsJuly 2008 versus July 2009 YTD

As of July 2009

-10.4

2.5

-1.8

-4.2

-1.8

2.63.2

-8.8-7.5

-18.2-20

-15

-10

-5

0

5

Supply Demand Occ ADR RevPAR

2008 Annual YTD 2009

Total US - Key Performance Indicators Percent ChangeFull Year 2008 versus July 2009 YTD

-8

-6

-4

-2

0

2

4

6

1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009

Supply % Change

Demand % Change

Total US - Historic Supply & Demand Percent ChangeTwelve Month Moving Average – 1989 to July 2009

2008 Smith Travel Research, Inc.

3.1%

- 6.0%

-1.1%

- 4.8%

▼▼

▼▼

▼▼ ▼

▼▼▼

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2003 2004 2005 2006 2007 2008 JFMAMJJ

Total US - Room Supply Percent ChangeMonthly Jan 2003 – July 2009

Stuck at 3.2

352

507

729

506

843

683

350

280

359

669

542

309

215217135

125

0100200300400500600700800900

1000

Number of Hotels Rooms (hundreds)

2002 2003 2004 20052006 2007 2008 2009E

Total US - Closed HotelsAnnual 2002 through 2009


66,946 rooms in 2005 to 13,500 rooms in 2009

JQH: “not over developed, just under demolished”

855

698630 605

742827

1031

903

727 735823

998

1520

1379

1550

1400

0

200

400

600

800

1000

1200

1400

1600

1800

Number of Hotels Rooms (hundreds)

2002 2003 2004 20052006 2007 2008 2009E

Total US - Opened HotelsAnnual 2002 through 2009


152,001 rooms in 2008,155,000 rooms in 2009 estimated

-10

-5

0

5

10

2003 2004 2005 2006 2007 2008 JFMAMJJ

Total US - Room Demand Percent ChangeMonthly January 2003 – July 2009

-10

-5

0

5

10

1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009

Occ % Chg

ADR % Chg

Total US – Historic Occupancy & ADR % ChangeTwelve Month Moving Average – 1989 to July 2009

-3.4%

-6.8%-8.9%

-5.1%-4.7%

0.1%

Occ goes negative and ADR drops

Occ turns around and ADR follows(approx. 3 months)

50

60

70

80

90

100

110

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Occupancy (%)

ADR ($)

Peak $107.23 Sep 2008

$101.27July 2009

Peak 64.7%Jan 1997 56.6%

July 2009

Total US - Historic Occupancy & ADRTwelve Month Moving Average – July 2009


86.41 91.16 104.08 106.7284.0785.30 98.0082.9682.82

$87.73$89.11

$91.15

$93.57

$96.74

$99.86

$106.65

$85.30

$102.71

80

90

100

110

2000 2001 2002 2003 2004 2005 2006 2007 2008

Actual ADRYr 2000, Grown by CPI

If year 2000 ADR had increased by CPI each year…

Total US Historic Room Rates - Actual vs. Inflation AdjustedAnnual 2000 - 2008

-12

-10

-8

-6

-4

-2

0

1/1 1/31 3/2 4/1 5/1 5/31 6/30 7/30 8/29

Demand

ADR

Total US - Demand & ADR Percent ChangeRunning 28 Day (Daily Data) - January 1 to August 29, 2009

-30

-20

-10

0

10

20

1/31/08 4/1/08 5/31/08 7/30/08 9/28/08 11/27/08 1/26/09 3/27/09 5/26/09 7/25/09

Group Demand

Transient Demand

Total US - Group & Transient Demand % Change Running 28 Day – January 31, 2008 to August 29, 2009

Oct 2008

Jul 2009

66.9

42.8

53.1

58.6 59.4

56.1

61.8

64.3

68.467.7

48.4

67.4

61.5

64.0

35

45

55

65

75

Sun Mon Tue Wed Thur Fri Sat

July 2008July 2009

Total US – Occupancy by Day of WeekJuly 2008 YTD vs. July 2009 YTD Less of a gap on the weekend,

Saturday highest occ day of week

104.43105.63

96.35

99.44100.72 100.35

98.3

95.6796.74

110.55

105.85

109.91109.16

107.45

80

100

120


July 2008July 2009

Total US - ADR by Day of Week July 2008 YTD vs. July 2009 YTD

Gap even for every day of the week

-15.9

-6.8

0.7

-16.0

-20

-15

-10

-5

0

5

Occupancy ADR

WeekdayWeekend

Total US - Transient Occupancy & ADR % ChangeWeekday / Weekend – August 29, YTD


Transient occupancymuch less impactedon weekends

ADR almost the same

-4.7

-22.4

-16.3

-4.4

-25

-20

-15

-10

-5

0

Occupancy ADR

WeekdayWeekend

Total US - Group Occupancy & ADR % ChangeWeekday / Weekend – September 5, YTD


Group occupancy less impacted on weekend

ADR almost the same

-11.1

-5.4

-11.1

-10.1

-11.4-10.5-9.7

-13.2

-5.4

-16.5

-9.7

-4.6

-20

-15

-10

-5

0

Luxury UpperUpscale

Upscale Mid w F&B Mid wo F&B Economy

OccupancyADR

US Chain Scales - Occupancy & ADR % ChangeJuly 2009 YTD

-8.7

-0.9

-9.4

-11.0

-8.8

-11.8

-10.1

-8.0

-9.8

-12.3

-2.2

-12.0

-15

-10

-5

0

Urban Suburban Airport Interstate Resort Small Town

OccupancyADR

US Location Segments – Occupancy & ADR % ChangeJuly 2009 YTD

US Regions – Occupancy, ADR, & RevPAR Percent ChangeJuly 2009 YTD

Occupancy: ▼ -11.1%ADR: ▼ -10.5%

RevPAR: ▼ -20.5 %

Occupancy: ▼ -13.4%ADR: ▼ -12.8%

RevPAR: ▼ -24.4 %

Occupancy: ▼ -8.1%ADR: ▼ -2.4%

RevPAR: ▼ -10.3 %

Occupancy: ▼ -11.4%

ADR: ▼ -3.8%

RevPAR: ▼ -14.7 %

Occupancy: ▼ -10.5%ADR: ▼ -7.3%

RevPAR: ▼ -17.1 %


RevPAR: ▼ -11.0 %


RevPAR: ▼ -15.3 %

Occupancy: ▼ -10.3%ADR: ▼ -14.5%

RevPAR: ▼ -23.3 %

Occupancy: ▼ -10.1%ADR: ▼ -7.2%

RevPAR: ▼ -16.5 %


TOTAL USOccupancy: ▼ -10.4%

ADR: ▼ -8.8%

RevPAR: ▼ -18.2 %

-10.1-11.5

-8.0

-10.7

-21

3.1 3.2

-6.7-7.2

-16.2

-25

-20

-15

-10

-5

0

5


Top 25 Rest of U.S.

Top 25 Markets versus Rest of US – Percent ChangesJuly 2009 YTD

ADR for Top 25 more impacted

Maryland Overview

Maryland Key StatisticsJuly 2009 YTD

% Change

Number of Hotels 644

Number of Rooms 73,452

Room Supply 14,983,880 5.4% (5)

Room Demand 8,757,736 .6% (2)

Occupancy 58.4% (10) - 4.6% (6)

Average Daily Rate $113.60 (5) - 3.6%

RevPAR $66.40 (8) - 8.0% (9)

Room Revenue $995 million - 3.0% (6)


4.3

4.1

3.3

2.9

1.6

1.1

4.5

5.4

0 2 4 6

Maryland

Delaware

New Jersey

Virginia

New York

North Carolina

Pennsylvania

West Virginia

Comparative States - Room Supply % ChangeJuly 2009 YTD


-6.7

-6.7

-4.4

-3.5

0.2

0.6

-9.1

-10.8

-12 -10 -8 -6 -4 -2 0 2

New Jersey

North Carolina

New York

Pennsylvania

Delaware

Virginia

West Virginia

Maryland

Comparative States - Room Demand % ChangeJuly 2009 YTD


-11.6

-9.6

-8.5

-8.1

-7.4

-4.6

-1

-14.4

-16 -14 -12 -10 -8 -6 -4 -2 0

New Jersey

North Carolina

New York

Delaware

Pennsylvania

Virginia

Maryland

West Virginia

Comparative States - Occupancy % ChangeJuly 2009 YTD


51.5%

53.7%

56.5%

58.4%

61.3%

51.9%

50.4%

58.5%

-8.5

-6.4

-5.3

-4.8

-4.3

-3.7

-2

-19.6

-22 -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0

New York

New Jersey

Delaware

North Carolina

Pennsylvania

Virginia

Maryland

West Virginia

Comparative States - ADR Percent ChangeJuly 2009 YTD


104.36

99.99

79.95

98.40

113.60

99.04

76.25

153.77

-21.8

-16.3

-14.4

-12.6

-11.3

-8

-2.9

-27.3

-30 -25 -20 -15 -10 -5 0

New York

New Jersey

North Carolina

Delaware

Pennsylvania

Virginia

Maryland

West Virginia

Comparative States - RevPAR Percent ChangeJuly 2009 YTD


44.63

55.97

52.85

51.50

41.46

66.40

52.63

94.28

Baltimore Market4 tracts – City, Suburbs (County), Area (Howard, Carroll, Harford, Queen Anne’s), BWI/Annapolis (Anne Arundel)

Wilmington, DE (Cecil County)

Maryland Area Market2 tracts – West (Washington, Allegheny, Garrett), Chesapeake/Ocean City (Kent, Talbot, Caroline, Dorcester, Wicomico, Worcester, St. Marys)

Washington, DC Market3 MD tracts – Frederick/Rockville (Frederick, Montgomery), Bethesda/College Park, MD South/East (Prince Georges, Calvert, Charles)

Maryland Hotel Census Statistics by TractJuly 2009 YTD


Market Tract Census Sample

Props Rooms Props Rooms

Baltimore Baltimore City 49 9,452 38 8,998

Baltimore Baltimore Suburbs 59 6,193 37 5,177

Baltimore Baltimore Area 73 6,215 55 5,528

Baltimore BWI Airport/Annapolis 71 9,824 65 9,205

MD Area West/Hagerstown 44 3,468 30 2,768

MD Area Chesapeake/Ocean City 166 13,903 58 6,698

Washington DC Frederick/Rockville 55 7,668 49 7,494

Washington DC Bethesda/College Park 40 5,796 38 5,731

Washington DC MD South/East 76 9,967 59 9,125

10.8

1.5

4.5

1.7 1.5 1.43.1

1.6

19.2

3.2 3.3

0

3

6

9

12

15

18

21

Maryland Tracts - Room Supply % ChangeJuly 2009 YTD


2.8

-4.2

4.4

-1.8 -2.5

-5.7

-1.2 -1.8

12.8

-7.5-5.8

-10

-5

0

5

10

15

Maryland Tracts - Room Demand % ChangeJuly 2009 YTD


-7.2

-5.6

-0.1

-3.4-3.9

-7

-4.2-3.3

-5.3

-10.4

-8.8

-12

-10

-8

-6

-4

-2

0

Maryland Tracts – Occupancy Percent ChangeJuly 2009 YTD


-8.4

-5.9

-9.2

-4.6

1.9

-1

-4.3

-7.6

7.3

-8.8-7.2

-12

-9

-6

-3

0

3

6

9

Baltimore City

Baltimore Suburb

s

BWI / Annapolis

Baltimore Area

MD West /

Hagerstown

Chesapeake / OC

Frederick / R

ockville

Bethesda / Colle

ge Pk

MD South & East

Total US

South Atla

ntic

Maryland Tracts – ADR Percent ChangeJuly 2009 YTD


-15

-11.1-9.3

-7.9

-2.1

-7.9 -8.3

-10.7

1.6

-18.7

-15.3

-21

-18

-15

-12

-9

-6

-3

0

3

Baltimore City

Baltimore Suburb

s

BWI / Annapolis

Baltimore Area

MD West /

Hagerstown

Chesapeake / OC

Frederick / R

ockville

Bethesda / Colle

ge Pk

MD South & East

Total US

South Atla

ntic

Maryland Tracts – RevPAR Percent ChangeJuly 2009 YTD


0.9

-9.6-10.6

-15

-5.1

-14.5 -14

0

-3.6

-10.4-11.3

1.2

-9.1

-1.4

-12.3

-5.7

-18

-15

-12

-9

-6

-3

0

3

Maryland Counties – RevPAR % ChangeJuly 2009 YTD


1.9

-11.7

-8.6 -8.9-7.1

0.8

-12.4

0.1

-18.5

-15.4

-6.1

-1.1

-5.4

-10.8

-13

-15.9

-9.8

-21

-18

-15

-12

-9

-6

-3

0

3

Maryland Smaller Cities – RevPAR % ChangeJuly 2009 YTD


Maryland Hotel Census Statistics by BrandJuly 2009 YTD

Chain Census Props Census Rooms Sample Props Sample Rooms

Marriott 10 3823 10 3823

Holiday Inn 15 3038 15 3038

Comfort Inn 27 2925 27 2925

Courtyard 18 2649 17 2558

Hampton Inn 22 2555 22 2555

Hilton 8 2464 8 2464

Sheraton Hotel 8 2376 8 2376

Days Inn 22 2270 22 2270

Best Western 18 2059 13 1600

Gaylord Entertainment 1 2000 1 2000

Residence Inn 15 1861 15 1861

Holiday Inn Express Hotel 18 1675 18 1675

Hilton Garden Inn 11 1519 11 1519

Quality Inn 12 1515 12 1515

Red Roof Inn 11 1312 11 1312

Hyatt 3 1278 3 1278

Maryland Hotel Census Statistics by ScaleJuly 2009 YTD


Scale Census Props Census Rooms Sample Props Sample Rooms

Luxury Chains 2 411 2 411

Upper Upscale Chains 43 14990 43 14990

Upscale Chains 79 11214 78 11123

Midscale W/ F&B Chains 61 9020 56 8561

Midscale W/O F&B Chains 135 13848 135 13848

Economy Chains 114 10106 106 9685

Independents 210 13863 18 2890

8.8

-1.0

7.0

9.2

-3.3

15.1

7.1

5.0

-1.5

1.4

-5

-2

1

4

7

10

13

16

Upper Upscale Upscale Mid w F&B Mid wo F&B Economy

MD US

Maryland by Scale - Supply Percent ChangeJuly 2009 YTD

-2.6

-5.4

3.32.5

-9.5

12.3

-4.8-5.5

-12.7

-8.4

-15

-10

-5

0

5

10

15


MD US

Maryland by Scale - Demand Percent ChangeJuly 2009 YTD

-10.5

-4.5

-3.5

-6.3-6.4

-2.5

-11.1

-10.1

-11.4

-9.7

-15

-12

-9

-6

-3

0


MD US

Maryland by Scale - Occupancy % ChangeJuly 2009 YTD

-9.7

-7.5

-6.8

-3.7-3.1

-5.5

-4.6

-11.1

-5.4 -5.4

-12

-10

-8

-6

-4

-2

0


MD US

Maryland by Scale – ADR Percent ChangeJuly 2009 YTD

-19.2

-11.7

-10.0 -9.7-9.3-7.8

-15.2

-20.0

-16.1

-14.5

-21

-18

-15

-12

-9

-6

-3

0


MD US

Maryland by Scale - RevPAR Percent ChangeJuly 2009 YTD

3.83.0

0.2

5.6

3.7

7.7

2.1

12.0

3.72.9 3.1

1.7

0

2

4

6

8

10

12

14


MD US

Maryland by Location - Supply Percent ChangeJuly 2009 YTD

-8.5

-6.1

-4.5

1.1

-0.9

8.6

-6.5

4.2

-5.5-6.7

-8.2-8.6

-10

-5

0

5

10


MD US

Maryland by Location - Demand Percent ChangeJuly 2009 YTD

-11.8

-8.7

-4.7-4.3 -4.4

0.8

-8.4-7.0

-8.8-9.4

-11.0-10.1

-15

-12

-9

-6

-3

0

3


MD US

Maryland by Location – Occupancy % ChangeJuly 2009 YTD

-8.0

-2.2

-0.9

-2.7

0.5

-8.2

-1.1

-9.1

-0.9

-12.3

-9.8

-12.0

-14

-12

-10

-8

-6

-4

-2

0

2


MD US

Maryland by Location - ADR Percent ChangeJuly 2009 YTD

-18.9

-10.9

-5.6-6.9

-3.9

-7.4

-9.4

-15.4

-9.7

-20.5-19.7

-20.9

-24

-21

-18

-15

-12

-9

-6

-3

0


MD US

Maryland by Location - RevPAR Percent ChangeJuly 2009 YTD

1.8

3.9

4.4

5.1

8.8

1.7

1.6

0 2 4 6 8 10

Atlanta, GA

Philadelphia, PA

Boston, MA

Washington, DC

New York

Baltimore, MD

Richmond, VA

Comparative Markets - Room Supply % ChangeJuly 2009 YTD


Larger cities or geographic areas

-6.1

-6.3

-8.7

-10

-11.6

-0.3

1.1

-14 -12 -10 -8 -6 -4 -2 0 2

Baltimore, MD

Washington, DC

New York

Philadelphia, PA

Boston, MA

Richmond, VA

Atlanta, GA

Comparative Markets - Room Demand % ChangeJuly 2009 YTD


-7.8

-10.1

-10.3

-13

-17.3

-4

-3.8

-21 -18 -15 -12 -9 -6 -3 0

Baltimore, MD

Washington, DC

Philadelphia, PA

New York

Boston, MA

Atlanta, GA

Richmond

Comparative Markets - Occupancy % ChangeJuly 2009 YTD


-7.3

-7.5

-9.4

-9.8

-24.9

-4.2

-3.4

-27 -24 -21 -18 -15 -12 -9 -6 -3 0

Washington, DC

Richmond, VA

Baltimore, MD

Atlanta, GA

Philadelphia, PA

Boston, MA

New York

Comparative Markets – ADR Percent ChangeJuly 2009 YTD


-16.5

-19.1

-19.5

-20.8

-32.5

-10.9

-7.3

-35 -30 -25 -20 -15 -10 -5 0

Washington, DC

Baltimore, MD

Philadelphia, PA

Boston, MA

Atlanta, GA

Richmond, VA

New York

Comparative Markets – RevPAR Percent ChangeJuly 2009 YTD


1.7

3.1

4

6.4

19.2

1.6

0

0 3 6 9 12 15 18 21

Fairfax/TC

Bethesda/CP

DC CBD

Rockville/Fred

Alexandria

Dulles

MD South/East

Comparative DC Tracts - Supply % ChangeJuly 2009 YTD


-1.2

-0.8

-0.3

0.3

12.8

-1.8

-6.1

-9 -6 -3 0 3 6 9 12 15

Fairfax/TC

Bethesda/CP

Rockville/Fred

Alexandria

Dulles

DC CBD

MD South/East

Comparative DC Tracts - Demand % ChangeJuly 2009 YTD


-5.3

-4.6

-4.2

-3.3

-1.3

-6.1

-6.3

-8 -6 -4 -2 0

Dulles

Fairfax/TC

MD South/East

Alexandria

Rockville/Fred

Bethesda/CP

DC CBD

Comparative DC Tracts - Occupancy % ChangeJuly 2009 YTD


-7.6

-4.3

-2.4

-1.8

7.3

-7.9

-12.7

-15 -12 -9 -6 -3 0 3 6 9

Dulles

Fairfax/TC

Bethesda/CP

Rockville/Fred

DC CBD

Alexandria

MD South/East

Comparative DC Tracts – ADR Percent ChangeJuly 2009 YTD


-10.7

-8.3

-6.4

-3.7

1.6

-13.5

-18.2

-21 -18 -15 -12 -9 -6 -3 0 3

Dulles

Fairfax/TC

Bethesda/CP

Rockville/Fred

Alexandria

DC CBD

MD South/East

Comparative DC Tracts - RevPAR % ChangeJuly 2009 YTD


1.4

1.3

0.8

0

2.5

6.1

0 2 4 6 8

Delaware Area

Myrtle Beach N

Chesapeake/OC

VA Beach

Jersey Shore

NC Coast

Comparative OC Tracts - Supply % ChangeJuly 2009 YTD


-4.2

-4.7

-5.7

-7.1

-1.8

6.7

-8 -6 -4 -2 0 2 4 6 8

Delaware Area

VA Beach

Jersey Shore

Myrtle Beach N

Chesapeake/OC

NC Coast

Comparative OC Tracts - Demand % ChangeJuly 2009 YTD


-4.9

-7

-7

-7.1

-3.2

0.8

-8 -6 -4 -2 0 2

Delaware Area

VA Beach

Jersey Shore

Myrtle Beach N

Chesapeake/OC

NC Coast

Comparative OC Tracts - Occupancy % ChangeJuly 2009 YTD


-2.9

-2.3

-1

0.6

-3.9

-4.1

-6 -4 -2 0 2

Myrtle Beach N

VA Beach

Jersey Shore

Delaware Area

Chesapeake/OC

NC Coast

Comparative OC Tracts - ADR % ChangeJuly 2009 YTD


-7.7

-6.8

-6.6

-1.7

-7.9

-10.9

-12 -10 -8 -6 -4 -2 0

Myrtle Beach N

Chesapeake/OC

Jersey Shore

VA Beach

NC Coast

Delaware Area

Comparative OC Tracts - RevPAR % ChangeJuly 2009 YTD


-13.5

-8.3

-7.9

-2.1

0.4

-17

-23

-25 -20 -15 -10 -5 0 5

Wilmington, DE

Suburban VA

Harrisburg/Hershey, PA

York, PA

Baltimore Area

Western MD

West Virgina North

Comparative MD Tracts - RevPAR % ChangeJuly 2009 YTD


-17.7

-15.5

-14.2

-9.3

-8.3

-19.2

-28.1

-30 -25 -20 -15 -10 -5 0 5

Atlantic City, NJ

Wilmington, NC

Williamsburg, VA

Charleston, SC

Savannah, GA

Annapolis/BWI

Norfolk

Comparative Annapolis Tracts - RevPAR % ChangeJuly 2009 YTD


62.3

43.6

57.7

64.3 64

56.4

60.6

63.865.3

67.2

45.1

67.7

60.9 60.8

40

45

50

55

60

65

70


July 2008July 2009

Maryland – Occupancy by Day of WeekJuly 2008 YTD vs. July 2009 YTD

112.45113.47

112.16

118.52

119.98

117.8

112.83

108.3 108.06

123.90

114.47

123.37

121.60

118.77

105

110

115

120

125


July 2008July 2009

Maryland - ADR by Day of Week July 2008 YTD vs. July 2009 YTD

-10

-5

0

5

10

15

1/1 1/31 3/2 4/1 5/1 5/31 6/30 7/30 8/29

Demand

ADR

Maryland - Demand & ADR Percent ChangeRunning 28 Day (Daily Data) - January 1 – August 29, 2009

-20

-15

-10

-5

0

5

10

1/1 1/31 3/2 4/1 5/1 5/31 6/30 7/30 8/29

Demand

ADR

Baltimore - Demand & ADR Percent ChangeRunning 28 Day (Daily Data) - January 1 – August 29, 2009

-15

-10

-5

0

5

10

15

20

25

30

35

1/1 1/31 3/2 4/1 5/1 5/31 6/30 7/30 8/29

Demand

ADR

DC - Demand & ADR Percent ChangeRunning 28 Day (Daily Data) - January 1 – August 29, 2009

-18

-15

-12

-9

-6

-3

0

3

1/1 1/31 3/2 4/1 5/1 5/31 6/30 7/30 8/29

Demand

ADR

Ocean City - Demand & ADR Percent ChangeRunning 28 Day (Daily Data) - January 1 – August 29, 2009

-20

-10

0

10

20

30

40

50

1/31/08 4/1/08 5/31/08 7/30/08 9/28/08 11/27/08 1/26/09 3/27/09 5/26/09 7/25/09

Group DemandTransient Demand

Maryland - Group & Transient Demand % ChangeRunning 28 Day – January 31, 2008 – August 29, 2009

90

100

110

120

130

140

1/31/08 4/1/08 5/31/08 7/30/08 9/28/08 11/27/08 1/26/09 3/27/09 5/26/09 7/25/09

Group ADR

Transient ADR

Maryland - Group & Transient Absolute ADR Running 28 Day - January 31, 2008 – August 29, 2009

$23

difference

$11

MD Pipeline – New Opens (last year, less 4) – 30 props, 4,005 roomsBaltimore Hilton 757 Aug-08

Oxon Hill Residence Inn 162 Aug-08

Hanover, Arundel Mills TownePlace Suites 109 Oct-08

Waldorf Courtyard 91 Dec-08

Clinton TownePlace Suites 115 Dec-08

Silver Spring Hampton Inn 149 Jan-09

Silver Spring Homewood Suites 90 Jan-09

Baltimore Country Inn & Suites 81 Mar-09

Oxon Hill aloft Hotels 190 Mar-09

Hanover, Arundel Mills Hilton Garden Inn 151 Mar-09

Hanover, Arundel Mills Homewood Suites 99 Mar-09

Baltimore Quality Inn 96 Mar-09

Bel Air Candlewood Suites 95 Mar-09

Hanover, Arundel Mills aloft Hotels 143 May-09

Hanover, Arundel Mills element 147 May-09

Elkridge Holiday Inn Express Hotel 98 Jun-09

Waldorf Residence Inn 98 Jun-09

Ocean City Courtyard 91 Jul-09

Bel Air Homewood Suites 92 Jul-09

Baltimore Kimpton 202 Jul-09

Lexington Park TownePlace Suites 87 Jul-09

Baltimore Fairfield Inn 154 Jul-09

Linthicum Heights aloft Hotels 155 Aug-09

Aberdeen Hilton Garden Inn 96 Aug-09

Cumberland Fairfield Inn 108 Aug-09

Columbia Springhill Suites 117 Aug-09

MD Pipeline – Under Construction, July 2009 – 22 props, 2,552 roomsHilton Garden Inn Aberdeen 96 Sep-09

Holiday Inn Express Baltimore 68 Sep-09

Hilton Garden Inn Bethesda 216 Oct-09

Country Inn & Suites Hanover 86 Oct-09

Residence Inn Hunt Valley 141 Nov-09

Country Inn & Suites California 84 Dec-09

Hotel Indigo Baltimore 135 Dec-09

Comfort Suites Elkton 83 Dec-09

Hilton Garden Inn St Charles 130 Jan-10

Hilton Garden Inn Rockville 112 Jan-10

Homewood Suites Rockville 87 Jan-10

Brexton Hotel Baltimore 30 Jan-10

Courtyard Hagerstown 96 Mar-10

Hilton Garden Inn Silver Spring 104 Apr-10

Staybridge Suites Baltimore 100 Jun-10

Hampton Inn Suites Edgewood 134 Jul-10

Four Points Baltimore 153 Sep-10

Residence Inn Landover 96 Sep-10

Hampton Inn Suites Camp Springs 117 Dec-10

Hampton Inn Suites Columbia 124 Apr-11

Courtyard Hyattsville 104 Apr-11

Four Seasons Baltimore 256 Dec-11

Maryland Pipeline – Planning w/ Proj. Open Date in 2010


Holiday Inn Express White Marsh 96 Apr-10

Fairfield Inn Hanover 97 May-10

Holiday Inn Express Aberdeen 85 Jun-10

TownePlace Suites College Park 76 Jul-10

Homewood Suites Columbia 114 Aug-10

Fairfield Inn Linthicum Heights 107 Aug-10

Hampton Inn Owings Mills 101 Aug-10

Courtyard Hyattsville 162 Sep-10

Unnamed Boutique Hotel @ Penn Station Baltimore 72 Dec-10

Staybridge Suites Savage 120 Sep-10

Staybridge Suites Greenbelt 125 Sep-10

Holiday Inn Express Edgewood 90 Sep-10

Holiday Inn Express Cumberland 83 Oct-10

Hampton Inn Suites Baltimore 100 Oct-10

Candlewood Suites Hanover 99 Nov-10

Candlewood Suites Camp Springs 100 Nov-10

Holiday Inn Glen Burnie 130 Dec-10

Holiday Inn Express Linthicum 110 Dec-10

Totals - Final Planning: 12 props, 1,198 rooms; Planning: 48 props, 5,981 rooms; Pre-Planning: 15 props, 1,593 rooms

Total US Projections

US Economic Outlook - Blue Chip Economic IndicatorsJuly 2009

2008 2009F 2010F

Real GDP +1.1% -2.6% +2.0%

CPI +4.0% -0.6% +1.8%

Corporate Profits -8.5% -12.4% +6.7%

Disp Personal Income +1.1% +2.3% +1.6%

Unemployment Rate 5.8% 9.3% 9.9%

Total US - Consecutive Quarterly DeclinesKey Indicators during prior downturns


1990/1991

2001/2002

Current(2008-9)

Estimate 2008-10

Demand 3 5 6 9

Occupancy 7 6 7 11

ADR 0 5 3 9?

RevPAR 5 5 4 9

Room Revenue 2 5 4 7

Total US - Active Development Pipeline - RoomsChange From Last Year

Source: STR / TWR / Dodge Construction Pipeline

Phase July 2009 July 2008 Difference % Change

In Construction 141,957 199,892 -57,935 -29.0%

Final Planning 71,116 100,201 -29,085 -29.0%

Planning 274,758 360,835 -86,077 -23.9%

Active Pipeline 487,831 660,928 -173,097 -26.2%

Pre-Planning 118,378 146,131 -27,753 -19.0%

Total 606,209 807,059 -200,850 -24.9%

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2003 2004 2005 2006 2007 2008 JASOND

Total US - Room Supply Percent ChangeJanuary 2003 – June 2009 / July – December Forecast

July: 3.2 vs. 3.1 to December: 2.6

-10

-5

0

5

10

2003 2004 2005 2006 2007 2008 JASOND

Total US - Room Demand Percent ChangeJanuary 2003 – June 2009 / July – December Forecast

1.01.8 1.9

1.0

-1.8

1.3 1.3

-0.1

0.41.3

0.2

3.02.6

4.0

1.3

-5.5

0.5

2.8

-8

-4

0

4

8

2003 2004 2005 2006 2007 2008 2009P 2010P 20 YrAverage

Supply % Chg

Demand % Chg

Total US – Annual Supply/Demand % Change2003 – 2010 Projected

-15

-10

-5

0

5

10

2003 2004 2005 2006 2007 2008 JASOND

Total US - Occupancy Percent ChangeJan 2003 – June 2009 / July – December Forecast

0.4

-0.6

0.3

-4.2

-0.2

3.62.9

-8.4

-10

-5

0

5

2003 2004 2005 2006 2007 2008 2009P 2010P

Total US – Annual Occupancy Percent Change2003 – 2010P

20 Year Average: -0.6%

Total US – Annual Absolute Occupancy 2003 – 2010P

59.2

61.4

63.1 63.3 63.1

60.4

55.4 55.1

50

60

70

2003 2004 2005 2006 2007 2008 2009P 2010P

-15

-10

-5

0

5

10

2003 2004 2005 2006 2007 2008 JASOND

Total US - Room Rate Percent ChangeJan 2003 – June 2009 / July – December Forecast

5.5

-9.7

-3.4

7.5

0.2

2.5

6.1

4.2

-12

-10

-8

-6

-4

-2

0

2

4

6

8

10

2003 2004 2005 2006 2007 2008 2009P 2010P

Total US – Annual ADR Percent Change2003 – 2010P

20 Year Average: 3.5%

$86.39$91.14

$97.96

$106.68

$96.43$93.16

$82.94

$103.97

$50

$75

$100

$125

2003 2004 2005 2006 2007 2008 2009P 2010P

Total US – Annual Absolute Average Daily Rate2003 – 2010P

-25

-20

-15

-10

-5

0

5

10

15

20

2003 2004 2005 2006 2007 2008 JASOND

Total US - RevPAR Percent ChangeJan 2003 – June 2009 / July – December Forecast

7.8

-4.0

-17.1

5.7

-1.8

8.57.9

0.5

-20

-15

-10

-5

0

5

10

2003 2004 2005 2006 2007 2008 2009P 2010P

Total US - Annual RevPAR Percent Change2003 – 2010P

20 Year Average: 2.9%

$53.02

$57.55

$62.03

$53.40$51.26

$65.62

$49.14

$64.44

$25

$50

$75

2003 2004 2005 2006 2007 2008 2009P 2010P

Total US - Annual Absolute RevPAR2003 – 2010P

-0.6

-9.7

-5.5

-8.4

-17.1

3.01.8

-3.4

1.3

-4.0

-20

-15

-10

-5

0

5

10


2009 F 2010 F

Total United StatesKey Performance Indicators Percent ChangeFull Year 2009 2010 Forecast

Takeaways

• Visibility remains difficult• Decline is global• Demand probably at or near bottom, September &

October will be critical• Turn around will be slow• “Less Worse” in 2nd half of 2009 (comps easier)• Marginal improvement in 2010• Time to earn “your keep”• Not time to have RMS on “auto pilot”

• Look for ways to create value• Change in the mix, maximize experience

[email protected]

615-824-8664 ext. 3315

www.strglobal.com

Presentation Available on

www.hotelnewsnow.com

“Industry Presentations”

-15

-10

-5

0

5

10

1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009

RevPAR % Chg

-2.7%

Total US - RevPAR Percent ChangeTwelve Month Moving Average – 1989 to July 2009


-10.5%-13.4%

-20

-15

-10

-5

0

5

10

1/31/09 4/1/09 5/31/09 7/30/09 9/28/08 11/27/08 1/26/09 3/27/09 5/26/09 7/25/09

Group ADR

Transient ADR

Total US - Group & Transient ADR % ChangeRunning 28 Day - January 31, 2008 – August 15, 2009

Transient ADR falling sharper

130

140

150

160

170

180

190

1/31/09 4/1/09 5/31/09 7/30/09 9/28/08 11/27/08 1/26/09 3/27/09 5/26/09 7/25/09

Group ADR

Transient ADR

Total US - Group & Transient Absolute ADR Running 28 Day - January 31, 2008 – August 15, 2009

Group ADRsurpassesTransient ADR

Top 25 Markets vs. Rest of US - Quarterly RevPar % Change1st Quarter 2007 – 2nd Quarter 2009

5.97.4

2.5 2.80.8

-10.7

-19.8

-22.6

-2.2

7.96.4

-17.2-16.1

-9.0

0.41.7

4.65.65.24.9

-25

-20

-15

-10

-5

0

5

10

1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09

Top 25

Rest of U.S.

Top 25 rise faster butalso fall farther

-32.5

-18.7

-40

-30

-20

-10

0

Top 25 Markets - RevPAR Percent ChangeJune 2009 YTD

Most of Top 25 markets below US average

0

500

1000

1500

2000

2500

-40% -10to -12.5

+ 2.5- 0

25%

Total US - Occupancy Percent ChangeNumber of Properties - June 2009 YTD

Industry average: - 10.9

0

500

1000

1500

2000

2500

3000

3500

-40% -7.5 --10.0

0 -2.5

25%

Total United States ADR Percent ChangeNumber of Properties - June 2009 YTD

Industry average: - 8.7

-12

-8

-4

0

4

8

1988q1 1991q1 1994q1 1997q1 2000q1 2003q1 2006q1 2009q1

Demand % Chg

ADR % CHG

Total US - Hotel Rooms Sold vs. ADR ChangeQuarterly Change – 1988 to Q4 2009E

86.41 91.16 104.08 106.72 96.37 94.3984.0785.30 98.0082.9682.82

$87.73$89.11

$91.15

$93.57

$96.74

$99.86

$105.90$107.81$106.65

$85.30

$102.71

80

90

100

110

Nominal ADRYr 2000, Grown by CPI

If year 2000 ADR had increased by CPI each year…

Total US Room RatesActual vs. Inflation Adjusted2000 – 2010E

3

-4.5

-7.3

2

0.2

-1.8

1.7

2.6

0.91.3

3

1.7

-0.8

-3.4

2.72.4

-3.3

-1.0

-10

-5

0

5

Supply Demand Occupancy

Total United StatesSupply, Demand & Occupancy ForecastQ3 2009 – Q4 2010


-11

-17.5

-15

-4.4

-6.1

-4.2

-2.2-1.3

0.4

-1.5

0.2

1.5

-13.0

-10.6-9.9

-5.6-6.5

-8.7

-20

-15

-10

-5

0

5

ADR RevPar Revenue

Total United StatesADR, RevPar and Room Revenue ForecastQ3 2009 – Q4 2010


• Budgets and forecasts impossible to manage

• Risk cannibalising existing business and damage to brand • In an upmarket, everyone follows the best practices of the market leader, in a downturn everyone follows the first person to panic

• Smaller properties cannot make up in volume what they lose in rate

• Decisions are based on competitors’ actions rather than hotel’s strategic initiatives and revenue needs

• Ability to manipulate behaviour using price severely limited in a falling market

• Discounting often ‘doubles up’ the loss of occupancy and rate

• Profitability is often overlooked and can be adversely affected by reductions

• Markets take years to recover

The Impact of Discounting