2010 ULI Fall Meeting Presentation October 13, 2010 9:00 am to 10:15 am

1. Hot New Trends in Hospitality.
Moving from Simmer to Sizzle.
Wednesday,
October 13
9:00 a.m. - 10:15 a.m.

2. The worst year on record
is now behind us.
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3. 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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4. 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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5. 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
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National Horizon
U.S. National Forecast

6. 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
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7. 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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8. $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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9. 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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10. 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
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11. 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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12. Thank you for your time.
www.pkfc.com
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