SAN DIEGO RevPar:Past, Present & Future

24 May 2010 Bobby Bowers

Smith Travel Research /

STR Global

bobby@str.com

www.strglobal.com

615.824.8664 x3321

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Total United StatesKey Performance Indicators Percent ChangeApril 2010 – Trailing 12 Months & Year-to-Date

Total United StatesRoom Supply/Demand Percent ChangeTwelve Month Moving Average – 1989 to April 2010

2008 Smith Travel Research, Inc.

2.9%

-1.7%

-1.1%

- 4.8%

- 6.9%

Total United StatesOccupancy/ADR Percent ChangeTwelve Month Moving Average – 1989 to April 2010

-3.4%

-6.8%

-4.5%

-7.4%

-4.7%

0.1%

-9.6%

Total United StatesRevPAR Percent ChangeTwelve Month Moving Average – 1989 to April 2010

2008 Smith Travel Research, Inc.

-10.5%

- 11.5%

-16.8%

Top 25 Markets versus rest of U.S.Key Performance Indicators Percent ChangeApril 2010 YTD

Chain Scales

STR Chain ScalesSelected Brands by Category

• Luxury – Four Seasons, Ritz Carlton, Fairmont

• Upper Upscale – Marriott, Hilton, Hyatt, Sheraton

• Upscale – Cambria, Courtyard, Hilton Garden Inn

• Midscale with F&B – Ramada, Holiday Inn, Best Western

• Midscale no F&B – Comfort Inn, Fairfield Inn, H.I. Express

• Economy – Econolodge, Days Inn, Red Roof

Chain ScalesSupply/Demand Percent ChangeApril 2010 YTD

Chain ScalesOccupancy/ADR Percent ChangeApril 2010 YTD

San Diego

San DiegoKey Market Facts

• 464 hotels / 58k rooms

• 310 rooms under construction - 0.5%

• $1.6 billion annual room revenue

• 41% room revenue - Downtown

• 41% room revenue – Luxury / Upper Up

• 2009 ADR fell 20.2% - # 6 among top 25

San DiegoKey Performance Indicators Percent ChangeApril 2010 – Trailing 12 Months & Year-to-Date

San DiegoWeekday / Weekend Percent ChangeApril 2010 YTD

Weekends = Friday / Saturday

San Diego – Luxury, Upper Upscale, Upper Tier IndependentsTransient / Group - Percent ChangeApril 2010 YTD

San DiegoKey Indicators - Percent ChangeMay 1 – 15, 2010

San DiegoRoom Supply/Demand Percent ChangeTwelve Month Moving Average – January 2000 to April 2010

2008 Smith Travel Research, Inc.

2.8%

-0.3%

-7.8% -8.4%

San DiegoOccupancy/ADR Percent ChangeTwelve Month Moving Average – January 2000 to April 2010

-8.2%

-3.0%

-11.9%

-3.7%

-11.4%

San DiegoRevPAR Percent ChangeTwelve Month Moving Average – January 2000 to April 2010

2008 Smith Travel Research, Inc.

-21.2%

- 14.6%

San DiegoRevPAR - Monthly Percent ChangeJanuary 2008 – April 2010

20092008

San DiegoOccupancy - Monthly Percent ChangeJanuary 2008 – April 2010

20092008

San DiegoAverage Daily Rate - Monthly Percent ChangeJanuary 2008 – April 2010

20092008

Key 15 MarketsRevPar Percent ChangeApril 2010 YTD

Excludes Las Vegas

Key 15 MarketsOccupancy Percent ChangeApril 2010 YTD

Excludes Las Vegas

Key 15 MarketsADR Percent ChangeApril 2010 YTD

Excludes Las Vegas

San Diego Chain Scales - Revenue Share (%)Twelve Months Ending March 2010

Annual San Diego revenue room = $1.6 billion

San Diego - Chain ScalesOccupancy/ADR Percent Change2010 April YTD

San Diego Sub Markets - Revenue Share (%)Twelve Months Ending April 2010

Annual San Diego revenue room = $1.6 billion

San Diego Sub MarketsOccupancy/ADR Percent ChangeApril 2010 YTD

San Diego Sub MarketsOccupancy PercentApril 2010 YTD

San Diego – Sub MarketsAverage Daily RateApril 2010 YTD

Projections

U.S. Economic OutlookBlue Chip Economic Indicators – May 2010

2009 2010F 2011F

Real GDP -2.4% +3.2% +3.1%

CPI -0.4% +2.0% +1.9%

Corporate Profits -3.8% +19.4% +8.1 %

Disp Personal Income +0.9% +1.3% +2.6%

Unemployment Rate 9.3% 9.6% 8.9%

Total United StatesActive Development Pipeline - RoomsChange From Prior Year

April 2010 April 2009 Change % Chg

In Construction 77,404 170,242 -92,838 -54.5%

“Planned” Pipeline 289,676 363,326 -73,650 -20.3%

Planned Pipeline includes projects in Final Planning and Planning phases

Source: STR / TWR / Dodge Construction Pipeline

Total United StatesKey Performance Indicators Percent ChangeFull Year 2009 Actual & 2010 / 2011 Forecast

San Diego, CA Market Supply & Demand Outlook 2008-2010F Annual vs. Prior Year

San Diego, CA Market Occupancy, ADR, RevPAR Outlook 2008-2010F Annual vs. Prior Year

San DiegoADR Percent Change vs. U.S. Inflation

Takeaways

• Value is King – What’s distinctive about your product?

• Performance trough likely past

• Supply growth slowing

• Demand slowly improving

• Pricing conditions improving

• Moderate improvement 2010

• Meaningful growth anticipated 2011