Hot New Trends in Hospitality.

Moving from Simmer to Sizzle.

Wednesday,

October 13

9:00 a.m. - 10:15 a.m.

The worst year on record

is now behind us.

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Long Term Average 2006 2007 2008 2009

Supply 2.2% 0.2% 1.3% 2.5% 3.1%

Demand 1.5% 0.5% 0.8% -2.1% -5.9%

Occupancy 62.2% 63.1% 62.8% 60.0% 54.7%

ADR 2.9% 7.6% 6.4% 2.8% -8.8%

RevPAR 2.3% 7.9% 5.9% -1.9% -16.8%

National Horizon Where We Have Been

Record Decline

Source: Colliers PKF Hospitality Research – September-November 2010 Hotel Horizons® Report, Smith Travel Research

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The Hotel Market Cycle

Rapid

Development

Occupancy

Declines,

ADR Follows

Development

at Minimum

Levels

Lodging

Decline, Leads

Other Sectors

Occupancy

Recovers

ADR and

Margins

Recover

Development

Picks Up

Development

Slows

Lodging Recovers,

Lags Other Sectors

Long Run

Occupancy

Rapid

Development

Equilibrium

ADR

U.S. is Here 2011-2012

Moving Past the Trough

2013-2014

A Year Ago

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Long Term Average 2010F 2011F 2012F

Supply 2.2% 2.0% 1.1% .08%

Demand 1.5% 7.3% 3.2% 4.9%

Occupancy 62.2% 57.5% 58.7% 61.0%

ADR 2.9% -0.6% 3.8% 6.3%

RevPAR 2.3% 4.6% 5.9% 10.6%

Record Increase

Source: Colliers PKF Hospitality Research – September-November 2010 Hotel Horizons® Report, Smith Travel Research 5

National Horizon U.S. National Forecast

Change in Number of Events Percent of Meeting Planners - More Meetings and Exhibitions

20%

32%

12%

22%24%

12%

55% 57%

70% 72%

6%

18%

0%

20%

40%

60%

80%

100%

Meetings From 2009 to

2010

Meetings From 2010 to

2011

Exhibitions From 2009

to 2010

Exhibitions From 2010

to 2011

Increase Decrease Stay The Same

Source: ConventionSouth, Colliers PKF Hospitality Research 6

Recovery Will Be Strong Through 2013 Annual Change in Unit-Level NOI*

-40%

0%

40%

80%

1937 1942 1947 1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007 2013F

+64.6% - 1943

-22.4% - 1938

-19.4% - 2001

-35.4% - 2009

+10.8% - 2011F

+17.9% - 2012F

+21.7% - 2013F

Note: * Before deductions for capital reserve, rent, interest, income taxes, depreciation, and amortization.

Source: Colliers PKF-HR, Trends® in the Hotel Industry sample.

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$15,621

$17,198

$13,862

$12,531

$10,977 $10,663 $10,912

$12,095

$14,257

$16,506

$12,229

$14,124

$16,006

$17,158

$6,000

$10,000

$14,000

$18,000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010F 2011F 2012F

Note: * Before capital reserve, debt service, rent, income taxes, depreciation, amortization.

Source: Colliers PKF Hospitality Research

Dollars per Available Room

Nominal Dollar Operating Profits*

Just Back to 2005

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The Cycle of Hotel Real Estate

Emotions- What Better Time?

2007

2004

2009-2010 2011

2008 – 1st

Half

2008 – 2nd

Half

2011-12

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More Profits = More Transactions? Unit Level Hotel Profits* and Hotel Transaction Volume

Note: * Before deduction for capital reserve, rent, interest, income taxes, depreciation, and amortization.

Sources: Real Capital Analytics July 2010, Colliers PKF Hospitality Research, September 2010 Hotel Horizons® Report 10

Summary

When will profit growth return and be sustained?

a) Supply/demand imbalance; capital market turmoil and

depressed market values will keep development at a

standstill into 2012/2013.

b) Signs are positive that recovery has begun to

accelerate; however, a buyer’s market will persist into

2011. Six consecutive quarters of rate declines ended

in Q2 2010, leading to

c) Profit growth in 2010 – stays well-above average

through 2013.

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Thank you for your time.

www.pkfc.com

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