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
• Daily Data
• Pennsylvania Performance
• Construction Pipeline
• Forecast
• Questions Discussion

Source STR
3
Total United StatesOccupancy and ADRTwelve
Month Moving to February 2005
4
Total United StatesRoom Supply/Demand Percent
ChangeTwelve Month Moving Average To February
2005
5
Total United StatesRoom Demand Percent
ChangeJan 2001 February 2005
6
Total United StatesRoom Demand (Rooms Sold in
Millions)Year End 2000 - 2004
Source STR
7
Total United StatesOccupancy / ADR Percent
ChangeTwelve Month Moving Average To February
2005
8
Total United StatesRoom Rate Percent ChangeJan
2001 February 2005
9
Total U.S. Real ADR GrowthNominal Change
Inflation Real Growth
10
Luxury/Upper Upscale ChainsDemand Segments
Demand, ADR and RevenueYear End 2004 Percent
Change
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Total United StatesKey Performance Indicators
Percent ChangeYear End 2004
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Total United StatesKey Performance Indicators
Percent ChangeFebruary YTD
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Daily Data
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Total U.S.Average Daily Lodging Demand in
MillionsYear End 2000, 2002 and 2004
15
Total United StatesRooms Sold/Day Differential
(Thousands)Year End 2000 Vs. 2004
Source STR
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Total United StatesRooms Sold/Day Differential
(Thousands)Year End 2003 Vs. 2004
Source STR
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Total U.S.Average Daily Lodging Room Revenue in
MillionsYear End 2000, 2002 and 2004
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Total United StatesDay of Week Analysis
Occupancy/ADR Percent ChangeYear End 2000 vs.
Year End 2004
Source STR
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Market Performance
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Occupancy 2004 Total PA 60.7
61.2
52.3
54.0
66.9
55.7
57.8
60.5
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Occupancy Change 2004 Total PA 2.7
4.4
1.3
0.2
4.7
1.5
-0.4
3.7
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Pennsylvania RegionsOccupancy Percent
ChangeYear End 2003 versus Year End 2004
Source STR
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Average Daily Rate 2004 Total PA 86.34
68.30
58.67
108.64
98.57
67.65
80.41
74.97
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ADR Change 2004 Total PA 3.3
4.4
2.1
4.6
2.6
3.6
3.1
3.5
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Pennsylvania RegionsADR Percent Change Year End
2003 versus Year End 2004
Source STR
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RevPAR 2004 Total PA 52.39
41.77
30.69
58.65
65.90
37.66
46.47
45.37
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RevPAR Change 2004 Total PA 6.0
9.1
3.4
4.8
7.5
5.2
2.7
7.3
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Pennsylvania RegionsRevPar Percent Change Year
End 2003 versus Year End 2004
Source STR
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Pennsylvania RegionsRoom Revenue ()Year End
2004 vs. Year End 2000

• Region 2004 2000
• Philadelphia 56,278,643 50,873,783
• Pittsburgh
  22,562,871 22,304,255
• NE PA Mountain 18,627,322 18,510,506
• Dutch 16,881,454 15,051,121
• Mountains Valleys 6,285,085
  5,722,566
• Great Lakes 4,102,253
  3,142,539
• Wilds 2,178,334 2,084,542

Source STR
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Pennsylvania RegionsOccupancyWednesday vs
Saturday12 month average through January 2005
Source STR
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Pennsylvania RegionsADR Wednesday vs
Saturday12 month average through January 2005
Source STR
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Selected Segments Supply Growth 12 Months
Ending January 2005
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Selected Segments Absolute Occupancy12 Months
Ending January 2005
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Selected Segments - Occupancy Change12 Months
Ending January 2005
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Selected Segments - Absolute ADR12 Months Ending
January 2005
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Select Segments - ADR Change12 Months Ending
January 2005
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Selected Segments - RevPar Growth12 Months
Ending January 2005
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Pennsylvania Existing and Future Supply
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PennsylvaniaExisting Supply1999-2004
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PennsylvaniaExisting SupplyBy Chain Scale
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PA Pipeline
Source STR / TWR / Dodge Construction Pipeline
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PA Pipeline10 Largest Projects
Source STR / TWR / Dodge Construction Pipeline
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Historic Attrition RatesSTR/PPR/FW Dodge
Pipeline
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Projections
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U.S. Economic OutlookBlue Chip Economic
Indicators February 2005

• 2004P 2005F 2006F
• Real GDP 4.4 3.6 3.4
• CPI 2.7 2.5 2.3
• Corporate Profits 15.0
  10.1 6.0
• Disp Personal Income 3.1 3.3 3.5
• Unemployment Rate 5.5 5.3 5.2

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Total United StatesActive Development Pipeline -
RoomsChange From Last Year
Feb 2005
Feb 2004 Change Chg In
Construction 101,335
73549 27,786
37.8 Final Planning 15,676
16,927 (1,251)
-7.4 Planning 169,709
181,046 (11,337)
-6.3 In Pre-Planning 80,449
135,767 (55,318)
-40.7 Total Development 367,169
407,289 (40,120) (9.9)

Source STR / TWR / Dodge Construction Pipeline
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Total United StatesSupply/Demand Percent
Change2000 2005P
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Total United StatesOccupancy Percent2000 2005P
49
Total United StatesAverage Daily Rate1998
2005P
Source STR
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Total United StatesADR Percent Change2000
2005P
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Total United StatesRevPARYear End 2000 2005P
Source STR
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Total United StatesRevPAR Percent Change2000
2005P
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U.S. Lodging Outlook
Supply Growth Remains Benign
Demand Strength Broadens
Occupancy Gains Continue
Aggressive Pricing Strategies
Increased Profitability