US LODGING INDUSTRY OVERVIEW

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US LODGING INDUSTRY OVERVIEW
Mark V. LomannoPresidentSMITH TRAVEL RESEARCH
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Presentation Outline

• US Lodging Industry Macro Trends
• Supply/Demand
• Occupancy/ADR
• Chain Scales
• Market Overview - Katrina
• Construction Pipeline
• Outlook

Source STR
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Total United StatesOccupancy and ADRTwelve
Month Moving Average September 2005
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Total United StatesRoom Supply/Demand Percent
ChangeTwelve Month Moving Average 1989 to
September 2005
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Total United StatesRoom Supply Percent
ChangeJan 2001 September 2005
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Total United StatesOccupancy/ADR Percent
ChangeTwelve Month Moving Average 1989 to
September 2005
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Total United StatesRoom Rate Percent ChangeJan
2001 September 2005
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Total United StatesRevPAR Percent ChangeTwelve
Month Moving Average 1989 to September 2005
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Total United StatesKey Performance Indicators
Percent ChangeSeptember YTD
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Total U.S. - OccupancySeptember YTD
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Total U.S. Nominal Average Daily Rate
September YTD
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Chain Scale Performance
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STR Chain ScalesSelected chains from each segment

• Luxury Four Seasons, Ritz Carlton, Fairmont
• Upper Upscale Embassy, Hilton, Marriott,
  Sheraton
• Upscale Hilton Garden Inn, Courtyard, Crowne
  Plaza
• Mid with FB Holiday Inn, Ramada, Best Western
• Mid no FB Hampton Inn, HI Express, Country
  Inns Suites
• Economy Motel 6, Red Roof, Days Inn

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US Existing Supply By Chain Scale
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Chain ScalesSupply/Demand Percent
ChangeSeptember 2005 YTD
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Chain Scale SegmentsOccupancy PercentSeptember
2005 - YTD
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Chain ScalesOccupancy/ADR Percent
ChangeSeptember 2005 YTD
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Chain ScalesRevPAR/Room Revenue Percent
ChangeSeptember 2005 YTD
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Market Performance
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Key 15 MarketsRoom Supply Percent
ChangeSeptember 2005 YTD Year over Year
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Key 15 MarketsRoom Demand Percent
ChangeSeptember 2005 YTD Year over Year
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Key 15 MarketsOccupancy PercentSeptember 2005
YTD
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Key 15 MarketsOccupancy Percent ChangeSeptember
2005 YTD Year over Year
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Key 15 MarketsADR Percent ChangeSeptember 2005
YTD Year over Year
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Key 15 MarketsRevPAR Percent ChangeSeptember
2005 YTD Year over Year
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Construction Pipeline
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Total United StatesActive Development Pipeline -
RoomsChange From Last Year
Source STR / Dodge Construction Pipeline
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Total United StatesRooms Under Construction by
Scale In ThousandsSeptember 2005
Source STR / Dodge Construction Pipeline
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Total United StatesQuarterly Construction
PipelineQ1 2000 Q2 2005
Source STR / TWR / Dodge Construction Pipeline
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Projections
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U.S. Economic OutlookBlue Chip Economic
Indicators October 2005

• 2004A 2005F 2006F
• Real GDP 4.2 3.5 3.3
• CPI 2.7 3.3 2.9
• Corporate Profits 12.5
  15.4 7.1
• Disp Personal Income 3.4 1.9 3.3
• Unemployment Rate 5.5 5.1 5.0

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Katrina Impact on the Region / Nation

• Region
• Lower room supply through Dec 05
• Much higher room demand through Dec 05
• Nation
• Displaced meetings will go elsewhere
• Displaced leisure travelers will go elsewhere
• National supply number decreases
• National demand number increases
• National 2005 RevPAR higher than prior estimates

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Total United StatesKatrina Impact - 2005
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Total United StatesSupply/Demand Percent
Change2000 2006P
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Total United StatesOccupancy Percent Change2000
2006P
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Total United StatesOccupancy Percent2000 2006P
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Total United StatesNominal Room Rates1998
2006P
Source STR
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Total United StatesADR Percent Change2000
2006P
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Total United StatesRevPAR Percent Change2000
2006P
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Key Points
Low Room Supply Growth
Good Demand Growth
Increased Pricing Leverage
Street Corner Business
Long Term Optimism Katrina Impact?
Source STR