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EMEA Quarterly Newsletter – Q2 2014

Industry Trends

• According to the World & Council (WTTC), demand for international tourism remained strong in the first four months of 2014. International tourism arrivals grew 5%, the same rate as full year 2013. Prospects for the current peak tourism season remain very positive with over 450 million tourists expected to travel abroad in the May-August 2014 period. • Destinations worldwide received 317 million international overnight visitors between January and April 2014, 14 million more than in the same period of 2013. This 5% growth consolidates the strong increase registered for 2013 and is well above the long-term trend projected by the UNWTO for the period of 2010-2020 (3.8%). • The strongest growth was seen in Asia and the Pacific and the Americas (both up 6%), followed closely by Europe and Africa (up 5%). By sub-region, Northern Europe, South and Mediterranean Europe, North Africa and South Asia (all up 8%) were the star performers. • In terms of tourism expenditure, growth continues to be strong from emerging markets, in particular China, the Russian Federation, Saudi Arabia and . Furthermore, demand from advanced economies is strengthening as the global economic situation gradually improves, with encouraging growth posted for Italy, , the Republic of Korea, the Netherlands, Norway and Sweden. • According to the UNWTO confidence index, prospects remain very positive for the period May- August 2014. Confidence has picked up, particularly among the private sector, and improved further in Europe, the Americas, Asia and the Pacific and the Middle East. • Data from business intelligence tool ForwardKeys indicates international air travel reservations for May-August are up 8%, with interregional and intraregional travel equally strong. The highest growth in bookings was recorded in international flight reservations from Asian source markets, followed by the Americas. • For the full year 2014, international tourist arrivals are expected to increase 4% to 4.5%, slightly above the UNWTO’s long-term forecast of 3.8% per year for the period 2010 to 2020. • According to Benchmark Hospitality International’s “Top Ten Travel Trends for 2014”, nearly 75% of growth in travel is leisure related, with half of this growth coming from the luxury segment. In addition, complimentary Wi-Fi is the most important amenity sought after by guests after location. • According to the Global Business Tourism Association (GBTA), business travel spending will reach a record US $1.18 trillion in 2014, a growth of 6.9% on last year. Asia Pacific owns the largest share of the business travel spend market with 38%, followed by Western Europe (24%) and North America (21%). • The GBTA expects that by 2018, Asia Pacific will have gained another 5% market share, while the US and Western Europe will lose 3% and 2%, respectively.

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Regional Performance

Europe

• During the first six months months of 2014, the European hotel industry experienced moderate growth rates when compared to the same period in 2013. Data published by STR Global (measured in Euros) reveal that for June 2014 YTD, Average Daily Rate (ADR) grew 2.4% while occupancy increased 2.1%. • Following a trend from the previous quarter, Northern Europe reported the best results, posting RevPAR growth of 10.4% driven by a 7% rise in ADR and a 3.2% increase in occupancy. Ireland was one of the best performing markets in Northern Europe, with RevPAR up 12.6% due to strong growth in both occupancy (+4.6%) and ADR (7.6%). Strong RevPAR growth was also seen in the (+12%). Performance was driven by a notable increase in ADR (+8.8%) while occupancy saw modest growth (+2.9%). • Performance in Southern Europe has continued to strengthen, with the region posting the second highest RevPAR growth (+5.3%). Performance was buoyed by occupancy (+3.7%) while ADR increased a moderate 1.5%. Greece has seen a surge in performance with RevPAR up 26.2% on the back of exceptional occupancy performance (+20%). The country has seen resurgence in international tourist arrivals after taking a hard hit during the economic crisis. Other top performers in Southern Europe were Malta (+16.9%) and Portugal (+9%). Notably, Israel has seen a return to growth (+9.7%) after posting poor first quarter performance. Nonetheless, we expect performance in the third quarter to be heavily affected by the ongoing Gaza crisis, resulting in yet another slump in growth. in Turkey continue to suffer amidst economic and political turmoil and posted a RevPAR decrease of 14%. • Hotels in Western Europe posted mostly positive results at June 2014 YTD, with moderate RevPAR growth overall (+1.4%). The Netherlands was amongst the best performing markets in the region, posting a RevPAR rise of 7.7%; evidence that the Dutch economy is in a recovery phase, while Belgium also posted good results (+4.2%). On the contrary, France has seen performance stagnate in the first half of the year (-4.2%), impacted by a lack of concerted economic reform and poor economic growth affecting domestic spending. • For the second quarter running, Eastern Europe was the only market to post negative results for the first half of 2014, with RevPAR falling 9.9% primarily as a result of reduced ADR (-6.4%) while occupancy fell 3.8%. Romania witnessed the largest RevPAR increase (+9.6%) due to strong occupancy results (+11.4%) while ADR fell 1.7%. Hungary followed, posting a RevPAR increase of 4.8%, driven equally by occupancy and ADR (both +2.4%). Unsurprisingly, Russia was the weakest performing market in Eastern Europe for the second quarter running due to the ongoing political crisis in Ukraine, posting a steep RevPAR decline of 21.4% as rates dropped 12.4% and occupancy 10.2%. • The best performing cities in Europe in terms of RevPAR growth at June 2014 YTD were Athens (+30.9%), Copenhagen (+19.8%), Manchester (+15%), Edinburgh (+11%) and Amsterdam (+9.8%). Cities reporting the largest declines include Moscow (-19.9%), Istanbul (-17.3%), Bratislava (-8.5%) and Paris (-4%).

Middle East & Africa

• The Middle East and Africa (MEA) region saw occupancy and ADR increase a moderate 1% and 3.5%, respectively, resulting in solid RevPAR growth of 4.5% at the end of H1 2014 (when

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measured in US Dollars). The Middle East continues to post the strongest growth, with RevPAR up 5.3% compared to 2013, while Northern Africa continues its negative trend from the last two quarters, posting a RevPAR decline of 6%. Ongoing unrest in a number of countries across the region continues to have a detrimental effect on hotel performance. South Africa also continued its negative trend, posting a RevPAR decline of 2.3% as ADR fell 1.9%. Occupancy stayed relatively flat at -0.4%. • One of the strongest performers in the Middle East was Bahrain, with RevPAR up a significant 18.4% as a result of a strong increase in occupancy (+19.9%). The country continues to recover after being effected by the Arab Spring in 2011 and its status was raised after Manama was named Arab Capital of Tourism in 2013. Jordan and Kuwait also continue to post good results, with RevPAR up 11.5% and 6.9%, respectively. Lebanon continues to be severely affected by political and sectarian tensions, together with the on-going troubles in neighbouring Syria, resulting in a significant 15% decrease in RevPAR at the end of H1 2014. • In Northern Africa, Egypt has seen a continued decline in RevPAR (-13.6%) due to sharp falls in both occupancy (-10.8%) and ADR (-3.2%). Egypt suffers from high threats of terrorism, with many countries issuing travel warnings to the country. • In Southern Africa, Kenya achieved negative results with a 3% fall in RevPAR resulting from a 2.1% decrease in occupancy and a 1% fall in ADR. Tourism in the country has been affected by travel warnings and further threats of terrorism. • In MEA, the best performing cities in H1 included Manama, with an 18.7% RevPAR growth, followed by Amman (+11.4%), Jeddah, and Muscat (both +7.9%). The weaker performing cities included Lagos (-17.1%), Beirut (-13.2%), Cairo (-13%) and Nairobi (-4.2%).

Supply

• According to June 2014 STR data, the European hotel development pipeline consists of 145,465 rooms across 904 hotels. Among the countries in the region, the United Kingdom reports the largest number of rooms in the ‘under construction’ or ‘planning’ stages with 41,831 rooms, followed by Russia (25,024 rooms); (17,653 rooms); Turkey (12,818 rooms) and Italy (4,527 rooms). • In the Middle East and Africa, developments total 143,870 rooms across 614 hotels if all construction projects reach completion. The reports the most rooms under construction (17,137 rooms), followed by Saudi Arabia (15,415 rooms); Qatar (5,985 rooms); Jordan (3,241 rooms); and Morocco (2,466 rooms).

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Transaction Activity Q2 2014

Sale Price Hotel Location Grade Rooms Buyer Seller (€m) Top 5 Single Asset Transactions Q2 2014 Edificio España 99.5 5 Star 306 Dalian Wanda Group Santander Movenpick Beach Residence 96.2 5 Star 294 BankMuscat Farran LLC Heathrow Park Hotel & Conference Centre 90.2 4 Star 895 AXA Zolfo Cooper Airport Union Investment Capital Hospitality Amsterdam Amsterdam 90 4 Star 252 Real Estate Group Northwood Avestus Capital Four Seasons Prague Prague Confidential 5 Star 161 Hospitality Partners

Source: JLL Hotels & Hospitality

• EMEA hotel transactions for the first half of 2014 reached over €7bn, a 12.1% increase compared to volumes reported in 2013. Transaction activity was driven by single asset deals, where investment saw a marked increase of 31% to €4.2bn. • The UK remained the most liquid market, with transaction volumes reaching €2.2bn (31.1% of total volume). The second most active market was Germany with approximately €881m, followed by Spain at €742m. • One of the most notable single asset transactions in Q2 was the acquisition of the Edificio España in Madrid for €265m, with €99.5m allocated to the development of a new luxury hotel in the building. Chinese conglomerate, Dalian Wanda Group, purchased the property from Spanish bank Santander. BankMuscat also purchased the Movenpick Jumeirah Beach Residence in Dubai for €96.2m. JLL acted as exclusive advisor for media group, Farran LLC. • In terms of portfolio sales during Q2, hotel group purchased 97 hotels in Europe through its HotelInvest business for a total of €900m, split into two separate portfolios that included properties across Germany, the Netherlands and Switzerland. In addition, Apollo Capital purchased 18 midscale properties from Ivanhoe Cambridge for an undisclosed price. Aareal Bank provided financing for the deal. • In Q2 2014, the most active buyers were Investment Funds and Private Equity firms, purchasing €2.7bn worth of hotel assets and accounting for about 38.7% of total transaction volumes. Hotel Operators came second (25.2%), followed by HNWI’s (7.8%) and Banks/Institutional Investors (6.8%). • The most active sellers were also Investment Funds and Private Equity firms with €2.2bn worth of transactions or 31.8% of total transaction volumes. Hotel Operators were the second most active (22.3%), followed by Property Developers (15.7%) and Receivers (10.1%).

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Company News: Strategy and Development

Rezidor Hotel Group

• Rezidor reported total revenue for Q2 2014 decreased a marginal 0.7% to €248.9m compared to last year. The results reflect a strengthening of the Euro which had a negative impact of €6m on total revenue. • EBITDA decreased €4m to €93m and the EBITDA margin decreased by 1.4 percentage points to 37.6%. The main reasons for the decrease are a decline in fee revenue, the timing of Easter, the temporary closure of one hotel for renovations and a higher cost of sales. • RevPAR in the second quarter for leased and managed hotels improved 2.7%, mainly as a result of improvements in average rate. RevPAR for just leased hotels grew 0.8% with occupancy growth offsetting an average room rate decline. • Two of the four main global regions reported RevPAR growth over last year. The strongest development was in the Middle East, Africa & Others (+9.6%) based on double-digit RevPAR growth in South Africa and the UAE. • The rest of Western Europe continued its positive development at a similar pace as in the first quarter (RevPAR +4.9%), while the Nordics were below last year (-0.8%) linked to the Easter impact in April and events last year in June in Norway. In Eastern Europe, growth in Poland and the Baltics was off-set by losses in Russia and the Ukraine (-2.1%), linked to the ongoing political situation. • In the second quarter, Rezidor opened five new hotels with a total of 795 rooms. Three hotels with 415 rooms left the system, resulting in a net opening of 380 rooms. Contracts were signed for eleven new hotels with 2,194 rooms. All openings and signings were under management or franchise contracts. • Rezidor’s strategy is to grow with management and franchise contracts and only exceptionally with leases. The company currently operates in 57 countries across Europe, the Middle East and Africa and has plans to further expand in the emerging markets. • The company has signed to convert a pair of hotels in Sousse, Tunisia to its Radisson Blu flag. The hotels, with 217 and 130 rooms, are undergoing extensive refitting ahead of opening in Q2 2016. • In June 2014, Rezidor announced the immediate appointment of Eric De Neef as Executive Vice President & Chief Commercial Officer, who will be responsible for Rezidor’s entire commercial organisation. • According to MKG Hospitality, Radisson Blu maintains pole position as Europe’s largest upper upscale hotel brand, both in number of hotels and number of rooms in operation. The ranking includes 28 countries within the European Union • The group has announced two inaugural UK hotels joining its recently launched Quorvus Collection. The 5-star 136-bed G&V Royal Mile Hotel, Edinburgh has rebranded from Hotel Missoni and the 5-star 410-bed May Fair Hotel, London will join the brand this summer.

InterContinental Hotel Group

• For the first half of 2014, IHG reported total gross revenue of $11.1bn, up 7% compared to last year. • Global comparable RevPAR growth was 5.8%, with ADR up 2.3%. Performance was strongest in the Americas (+6.7%), followed by Europe (+4.9%); Greater China (+4.3%) and AMEA (+3.6%).

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First half trading was particularly strong in the UK (+8.7%), with high single digit growth in both London and the provinces, while Germany delivered another solid performance with RevPAR up 3.1%. • IHG opened 17,000 rooms across 109 hotels in the first half of 2014, led by 9,000 rooms in the Americas and 4,000 rooms in Greater China. 11,000 rooms left the system. Key openings included the group’s first two in the US, while key openings in Europe include three hotels (Rome, Madrid and St. Petersburg), two properties in Germany and three hotels in the UK. • The group’s current pipeline stands at 187,000 rooms (1,175 hotels) with over 45% under construction and over 50% in developing markets. The group signed 30,000 rooms in the first half of the year, the largest number for underlying signings since 2008, supported by continued improvements in the US financing environment. • IHG currently has a 5% share of global industry supply and a 13% share of active industry pipeline. • IHG has progressed on asset disposals to reduce the asset intensity of its business. The group completed two asset disposals in H1 and progress is being made with a strategic review of the groups remaining owned hotels. • IHG is preparing to operate a new Holiday Inn Express hotel near Istanbul’s international airport after signing a franchise contract. • US investor Marcato Capital Management has said that a combination of IHG with a “larger hotel chain” would have "compelling strategic and financial merit” and represented a “unique opportunity to reshape the global ”. The activist hedge fund holds a 3.8% stake in IHG. • Katara Hospitality, Qatar-based hotel owner, developer and operator, has acquired five European IHG hotels. The hotels purchased were the InterContinental Carlton Cannes, the InterContinental Amstel Amsterdam, the InterContinental Madrid, the InterContinental , and the lease hold interest in the InterContinental De La Ville Rome. The total acquisition cost was not revealed.

Hilton Worldwide

• Hilton reported an adjusted EBITDA of $651m for the second quarter of 2014, a 10% increase on 2013. • System-wide comparable RevPAR increased 6.7% on a currency neutral basis. RevPAR is expected to increase a further 5.5% to 7% in the third quarter of 2014 compared to the same period last year. • Management and franchise fees were $371m in the second quarter of 2014, an increase of 14% year on year. • Ownership segment adjusted EBITDA for the second quarter was $291m, an 8% increase from 2013. • Hilton opened more than 8,000 rooms across 56 hotels in the second quarter for a total of over 17,000 rooms in the first half of 2014. In May 2014, Hilton entered a new country with the opening of the Astana, Kazakhstan, increasing ’s global presence to 93 countries and territories. • As of June 2014, Hilton has the largest room pipeline in the lodging industry, with approximately 210,000 rooms across 1,230 hotels in 75 countries and territories, of which 56% are

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located outside the US. Over 50% are currently in the construction stage. According to STR Global, Hilton has the largest supply of rooms under construction in every major world region. • In June 2014, Hilton launched a new brand: – A Collection by Hilton. The brand has been created for travellers who seek local discovery and experiences. According to Hilton, Curio will consist of a carefully selected collection of hotels that will retain their unique identity but are expected to deliver the benefits of being part of the larger Hilton group. • Long-term debt was reduced by $250m in the second quarter and another $150m in July 2014. • Hilton announced the pricing of a secondary share offering that will raise $2bn for stockholder Blackstone. The offer of 90 million shares at $22.50 per share closed on June 27. Deutsche Bank, BofA Merrill Lynch and Morgan Stanley led the offer, giving the underwriters options on a further 13.5 million shares. The transaction has left Blackstone holding just over two thirds of Hilton stock. • The Groupe Partouche is pursuing its asset disposal strategy and has announced the sale of the walls and business of the Hilton Lyon Hotel to Les Clés du Luxe, a subsidiary of Lavorel Développement. The amount for the transaction was €25m. • Hilton has announced plans with investors Al-Rayyan Hospitality to develop the largest beach in the Middle East at Salwa Beach in Qatar. The group said in a statement that the development will be the largest of its kind in the Middle East and will be built on 104 hectares of prime land and coastline in the south west corner of Qatar. • The group has announced the opening of the Waldorf Astoria Amsterdam. Located on the UNESCO area of Herengracht, this new luxury canalside property is comprised of six historic 17th and 18th century town houses. • has announced the official opening of its latest property in Poland, the 300-guestroom Hampton by Hilton Warsaw City Centre. Last year, the hotel was the first in Warsaw to receive the prestigious LEED Gold Certification, in recognition for its eco-friendly construction and energy efficiency.

Starwood Hotels &

• has announced an adjusted EBITDA of $324m for the first quarter of 2014. Excluding special items, income from continuing operations was $153m. • Income from management fees, franchise fees and other income increased 10.2% to $260m. Other management and franchise revenue was up 29.7% compared to the second quarter of 2013 primarily due to fees associated with the termination of certain management and franchise contracts during the quarter. • Worldwide comparable RevPAR increased 5.3% in constant dollars compared to 2013 with Greater China seeing the strongest RevPAR increase (+11.1%). North America also saw positive results (+6.3%), benefitting from economic recovery and growth in business travel while Europe saw stable growth (+1.9%). Hotels in the MEA region, however, saw a performance decline with RevPAR down 0.9%. • The company signed 48 hotel management and franchise contracts during the second quarter, representing approximately 8,500 rooms, of which 37 are new builds and eight are conversions from other brands. The company has approximately 450 hotels in the active pipeline (around 105,000 rooms). • 19 new hotels and resorts amounting to around 3,800 rooms opened during Q2. Six properties (representing 1,200 rooms) were removed from the system.

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• Starwood has announced its debut in Ajman, UAE with the opening of Ajman Saray, a Luxury Collection Resort. With this opening, Starwood expands its footprint in the UAE where it now operates 23 hotels and resorts, including three under The Luxury Collection brand. • Starwood has announced that its three-property complex, on the site of the former Metropolitan Hotel in Dubai, will open next year - months ahead of the original schedule. Guide de Wilde, regional director, revealed that the complex, comprising the 966-key Westin Dubai, the 241-room St Regis Dubai and the 384-key W Hotel, will open progressively during 2015. • In June 2014, the group announced the opening of the Ljubljana Mons, Slovenia, the first globally branded hotel in more than a decade to enter Ljubljana. • Scheduled to open in early 2017, a new-build Aloft and Element hotels will be located in the heart of the historic Tobacco Dock area of East London. Aloft London Tobacco Dock will be the second Aloft hotel in London and third in the United Kingdom, while Element London Tobacco Dock will mark the debut of Starwood's eco-wise Element brand in this established market.

Marriott International

• Marriott has reported an EBITDA of $408m for the second quarter of 2014, a 10% increase compared to last year. • The group reported revenues of $3.5bn in Q2, a 6.1% increase on last year. Base management and franchise fees totalled $370m, a growth of 8%. The increases reflect higher RevPAR and new unit growth. • In the second quarter, 40% of worldwide company-managed hotels earned incentive management fees compared to 34% in the year-ago quarter. • Net income totalled $192m, a 7.3% increase. • International comparable system-wide RevPAR for the group rose 5.8% (a 5.9% increase using actual dollars) in the first quarter. The company is bullish on the remainder of 2014, with the strong RevPAR growth in the second quarter combined with large numbers of bookings giving confidence to increase full year RevPAR growth guidance up to 6%. • Marriott added 162 new properties (18,729 rooms) to its worldwide lodging portfolio in Q2 2014, including 113 properties (10,016 rooms) related to the acquisition of Protea Hotels. Nine properties (1,134 rooms) exited the system during the quarter. At the end of Q2, the company's lodging group encompassed 4,087 properties and timeshare resorts for a total of nearly 697,000 rooms. • The company's worldwide development pipeline increased to more than 1,300 properties with over 215,000 rooms at the end of Q2. Nearly 30,000 rooms are approved for development but not yet subject to signed contracts. • The company expects investment spending in 2014 will total approximately $800m to $1bn, including around $150m for maintenance capital spending and $193m associated with the Protea transaction. • A Hong Kong investor has purchased the Marriott Champs-Elysées in Paris for approximately €344.5m from French real estate group MCE PropCo. By becoming owner of the hotel, Kai Yuan Holding wishes to further adapt its services to the Chinese market in order to increase its occupancy rates by diversifying its clientele, which currently consists of mostly people from North America, the Near East and Europe. • The 5-Star Hotel Ritz in Madrid, one of the Spanish capitals most prestigious properties, is on sale. The property is 50% owned by the private Omega Capital led by billionaire Alicia Koplowitz, and 50% by -based Orient Express Hotels.

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• Marriott has announced the appointment of Samir Baidas as Chief Development Officer, Middle East and Africa and Philip Bryson as Senior Vice President, Middle East and North Africa. Both executives are long standing employees and come with a wealth of experience to cater to the company’s growing Middle East and Africa expansion. • The group is set to sign a new partnership with Dubai’s Emirates Group and is already in talks to expand its recently acquired African-focused Protea Hotels brand into the Middle East.

Hyatt Hotels

• Hotels has reported an adjusted EBITDA of $231m in the second quarter of 2014 compared to $212m in 2013, an increase of 9%. • Comparable owned and leased hotels RevPAR increased 4.8%, or 4% excluding the effects of currency. Occupancy improved 100 basis points and ADR increased 3.5% compared to the same period in 2013. • Owned and leased hotels revenue increased 3% in the second quarter. Excluding expenses related to benefit programs funded through rabbi trusts and non-comparable hotel expenses, expenses increased 3.3%. • Revenue from management and franchise fees decreased 7.3% to $103m. Base management fees increased 11.6% to $48m, primarily due to strong RevPAR growth and newly opened hotels. • Incentive management fees decreased 20% to $28m, primarily because no incentive management fees were earned at four managed hotels in France. Franchise fees increased 41.7% to $17m as a result of new hotels and hotels recently converted from managed to franchised. • During the second quarter, the company repurchased 1.5 million shares of common stock at a weighted average price of $57.33 per share, for an aggregate purchase price of approximately $90m. • In May 2014, the company’s board of directors authorised the repurchase of up to an additional $300m of common stock. As of July 25th, Hyatt had approximately $319m remaining under its share repurchase authorization. • Ten hotels were added in the second quarter, including the Park Hyatt, Austria and the Hyatt Place Dubai/Al Rigga, UAE. • Hyatt expects a significant number of new properties will be opened under all the companies brands in the future. This effort has been underscored by executed management or franchise contracts for approximately 240 hotels (amounting to approximately 54,000 rooms) across all brands. The executed contracts represent potential entry in several new countries.

Accor

• Accor’s HotelInvest division has seen revenue up 2% in the second quarter of 2014, to €1.3bn. HotelInvest has also seen good revenue growth in every key market except France, where demand was dampened by the increase in the VAT rate on January 1st. • Operations in Northern, Central and Easter Europe (NCEE), which account for 43% of HotelInvest’s revenue, continued to improve (+1.7%) mainly due to good trading in the United Kingdom and Benelux. • At the end of June 2014, HotelInvest’s portfolio was 1,369 hotels, of which 77% are in Europe and 96% in the Economy and Midscale segments.

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• HotelServices reported €3.2bn in business volume in the second quarter of 2014, an increase of 6.2%, led by the combined impact of development and growth in RevPAR. • Over the second quarter, Accor opened 60 hotels (7,835 rooms), 93% of which through franchise and management contracts. At the end of June 2014, HotelServices’ system comprises 3,645 hotels (470,878 rooms), of which 27% under franchise, and 73% under management contracts including the HotelInvest portfolio. • On a comparable basis, revenues rose 6.5% year on year, with strong gains in every geography except the Asia-Pacific region, which saw revenue edge back 0.5%, affected by China and Australia. • Fees paid by HotelInvest to HotelServices amounted to €147m in the second quarter, or 46% of HotelServices’ revenue for the period. • A total of 7,835 new rooms across 60 hotels opened during the quarter. Significant openings include the Dubai Downtown, UAE, the MGallery Molitor in Paris and the London Wembley in the United Kingdom. • Accor gained a total of 97 hotels with the recent Axa REIM (Switzerland) and Moor Park portfolio acquisitions (Germany and the Netherlands), closing on June 27 and 30, respectively. In addition, HotelInvest restructured four hotels during Q2 2014, of which two were previously leased and two were owned hotels. • Second quarter trends for Accor remain solid, with good RevPAR growth driven by both occupancy and prices. Revenue has continued to improve throughout EMEA, enhanced by a recovery trend in Southern Europe. • Accor plans to increase its Middle Eastern portfolio to 100 hotels by 2017. The group’s regional unit said the expanded portfolio will cover the economy, midscale, upscale and luxury sectors with Accor brands such as Styles, Adagio, Novotel and Sofitel. • Accor’s HotelServices Middle East has announced it will operate the largest economy hotel in the Middle East at the Dubai World Trade Centre District, a new commercial development in the heart of Dubai's business district. The new hotel, which is due to open in early 2016, will further strengthen Accor's partnership with Dubai World Trade Centre, which has been home to the ibis Dubai World Trade Centre hotel since 2003. • Accor's aparthotel brand Adagio has signalled its arrival in the UK capital with a pair of signings. In a deal with Union Hanover and EquityBridge Asset Management, it will open sites in Whitechapel and Stratford, east London. • John Ozinga has joined Accor as the chief operating officer of the business’s HotelInvest division. Ozinga has more than 20 years’ experience in the real estate industry in France and internationally, starting his career in 1991 with Accor as development director for the United Kingdom, Ireland and Benelux. • Accor has announced the opening of its African subsidiary in the city of Casablanca, Morocco. Called Accor HotelService Afrique, its purpose of this hub will be to centralize the group's African network operations and development through franchise and management contracts, essentially in French-speaking Africa, but also in English speaking areas such as South Africa and outside the continent, on the islands of Reunion, Mauritius and Madagascar.

NH Hoteles

• NH has reported that revenues from recurrent hotel activity are up 2.5% in Q1, while operating costs are up 1.2%, producing an increase in Gross Operating Profit of 6% and an EBITDA increase of €5.1bn, primarily due to the renegotiation of rental agreements.

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• Recurring EBITDA for the first quarter stood at -€8.2m, of which €1.2m corresponded to the removal of hotels from the consolidation perimeter. In comparable terms, recurring EBITDA would have been -€7m, an improvement of 8.3%. An absorption ratio for the drop in sales of +67% was obtained. • RevPAR increased 2.5% in Q1 2014, continuing the trend of the two previous quarters. Occupancy for the group rose 3.1% while ADR saw a slight decrease of 0.6%. NH expects an estimated RevPAR growth of between 3% and 5% for the year, with a greater weighting in the second half of the year due to the implementation of a number of income-generating initiatives. • The company still has around 30 hotels under refurbishment, the most significant being the NH Eurobuilding in Madrid, Spain, which will be launched at the beginning of October. • In Q2 2014, NH launched its new marketing campaign in Spain, Italy, Germany and Benelux, “NH is me”. The campaign focuses on written and online advertising media to promote the group’s brands. • NH Hotel Group signed an agreement with Intesa Sanpaolo under which it will acquire the latter's 44.5% stake in NH Italia in exchange for shares. Intesa Sanpaolo set up the Italian joint venture with NH Hotel Group, which owns the remaining 55.5%, in 2007. Accordingly, the deal will entitle NH Hotel Group for the 100% of NH Italia, which is currently active in the hotel business in Italy and the US, as well as operating hotel establishments in Germany, the Netherlands and Belgium. • The group, which previously wanted to shrink its supply of products 13% by 2018, nonetheless announced it wanted to open six hotels in Spain on the same period. Barcelona, Madrid, Seville and Valencia are the cities targeted by these new projects. The investment will be variable, with openings through management and lease contracts as well as owned properties. • NH maintains its disposal target of €125m for the year as a whole and has various ongoing sales that are at varying stages of completion.

Meliá Hotels International

• Meliá Hotels International has reported consolidated EBITDA growth (excluding capital gains) of 35% for the first half of 2014, with further strengthening of all business segments. • Total Revenues increased 6% to €703.9m thanks to solid performance of the hotel business. • Net debt decreased €80m to €1.16bn, explained by the higher contribution of all business units, cash inflows from asset disposals and the recovery of outstanding amounts with associates. • The company maintains its commitment for 2014 to deleverage its balance sheet, partially thanks to asset rotation, the improvement of hotel performance and the possible conversion of a €200m convertible bond which matures in December 2014. • RevPAR for owned and leased hotels increased 11%, mainly as a result of increased prices, including uplift in performance of resorts in the Mediterranean and the Caribbean, along with good performance of recent openings such as the Paridisus Resorts in Playa del Carmen. • In EMEA, RevPAR increased 3.8%, fully explained by improvements in room rate. Highlights include Germany, where several trade fairs had a positive impact on performance, and the United Kingdom, where performance was partially helped by changing in sterling exchange rates. • Meliá expects a RevPAR increase of mid-to-high single-digit growth for the first nine months of 2014, mainly due to increases in room rate. • In the first half of 2014 Meliá signed 12 new hotels, of which three have already opened: the Sol Taba, Sol Dahab and Tryp Esepona Valle Romano. The latest openings, the Gran Meliá

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Ulaanbaatar and the Meliá Cartegena, bring the group’s total pipeline to 16,500 rooms across 61 hotels. • Meliá is confident it will achieve its goal of 25 - 30 new contracts in 2014, all of them under low capital intensive formulas, and all of them outside Spain, with a special emphasis on emerging markets. • In June 2014, the group announced the launch of four new concepts under its Sol Hotels and Resorts brand in an effort to upgrade and reposition its brands and products. The latest venture is the re-launch of its family vacation brand of Sol Hotels & Resorts, of which there are currently 70, with the creation of innovative concepts that aim to reinvent the traditional 'sun and beach' experience, enhancing the customer value proposition and adapting to an increasingly demanding and segmented customer base.

Host Hotels & Resorts

• Host Hotels has announced an increase in total revenues of 2.3% for the second quarter of 2014. The growth reflects a 3.4% revenue improvement at the company’s comparable hotels for the quarter. The improvements in the company’s results were driven by strong growth in RevPAR. On a constant dollar basis, RevPAR increased 5.1% for the quarter, reflecting strong improvements in average room rates (+4.1%), while occupancy increased to 81%. Additionally, comparable F&B revenues increased 0.8%. • The group’s outlook for 2014 is that RevPAR will increase between 5.75% and 6.25%. Furthermore, hotel revenues are expected to increase up to 5.8%. • The company invested approximately $18m during the quarter in ROI expenditures, with the aim to increase cash flow and improve profitability by capitalizing on changing market conditions. • The company also spent approximately $4m on capital expenditures for recent acquisitions. Host expects that acquisition capital expenditures will total up to $30m in 2014. • In January 2014 the group announced the sale of an 89% interest in the entity that owns the Philadelphia Marriott Downtown, based on a gross entity value of $303.4m. The company retained an 11% interest in the joint venture with Clearview and funds managed by Oaktree Capital Management. • Host currently owns 115 properties globally, totaling approximately 60,000 rooms. The company also holds non-controlling interests in a joint venture in Europe that owns 19 hotels with approximately 6,400 rooms and a joint venture in Asia that owns three hotels in Australia and India.

Whitbread

• has reported total revenue up 13% to £2.29m for the financial year to 27 February 2014 (latest data available). The group is benefiting from an economic recovery led by London, which is helping to lift revenue at the company’s hotel and coffee-shop businesses. • Whitbread’s like-for-like sales were up 4.2% across UK and Ireland, Costa and Restaurants UK. • Whitbread secured space for over 5,000 rooms across 48 pipeline projects in its latest financial year to February 2014. Almost 40% of these rooms are within the M25. The group’s current pipeline stands at 11,500 rooms and the company remains on track to reach a strategic target of 75,000 rooms in the UK & Ireland by 2018.

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• Whitbread has signed an amendment to its existing £650m syndicated bank facility, extending its maturity by two years to 4th November 2018, and introducing an option to extend it by a further two years beyond that date, with the consent of the banks at the time. • CBRE Global Investors has acquired the Circus building in Manchester from Circus Invest for £24.5M, a 5.7% yield. The deal included the 232-bed Premier Inn Manchester City Centre (Portland St), which Circus Invest acquired in 2011 from La Salle Investment Management in a £20M deal. • CBRE Global Investors has submitted plans to convert the Hanover Buildings in Edinburgh's Rose Street into a 157-bed budget hotel. The new hotel has been designed by architects 3DReid whose room drawings would indicate the project is earmarked for a hub by Premier Inn. • Whitbread has announced that chairman Anthony Habgood will step down from the board later this year. Habgood has been chairman since 2005, having overseen the growth of several of the company’s key brands, including Premier Inn and . His successor is being sought by senior independent director Sir Ian Cheshire, with an announcement on the new appointment expected later in the year. • Whitbread has opened the 180-bed Premier Inn Glasgow Pacific Quay, the first of four hotels due to open in the city this year. The £11m hotel was built by Ogilvie Construction. It is situated by the River Clyde opposite the SECC and near the Glasgow Science Centre. • Premier Inn will open 14 hotels in the Middle East over the next three years. One hotel each will open in Sharjah, Riyadh, Dammam, Jubail, Manama, two each in Muscat, Doha, and Jeddah, and three hotels in Dubai. The hotels are expected to cost between AED 80m and AED 100m each to build. Whitbread has also revealed the hotel chain is also considering opening properties in Thailand, Malaysia, India, Singapore, and Indonesia.

Travelodge

• In May 2014, launched a new £25m advertising campaign, the largest in the history of the budget hotel group. The campaign was the first major initiative from , the new chief executive of the 513-strong group, who was appointed to the role six months ago. It is hoped that the four-month television, digital and print campaign will be viewed at least five times by 14.5 million adults. • The group has announced it is looking for ten sites in Scotland, representing an investment of £75m and the creation of 200 jobs. Peter Gowers, Travelodge Chief Executive said: “There is a big opportunity to further expand in Scotland. At present, the value hotel market in Scotland stands at 14 per cent, compared to 18 per cent in England and more than 30 per cent in the US. By 2030, the budget hotel sector could account for almost a quarter of the UK market, with a similar level of growth expected in Scotland.” • Travelodge has also invested £4m in the last 12 months into modernising over half of its Scottish hotels with a new contemporary look. This initiative includes revamping Travelodge rooms, Bar Cafes and reception areas. The new modern Travelodge room includes a bespoke luxurious king size bed called the Travelodge Dreamer bed. • This modernisation programme is part of a wider £57m refurbishment investment Travelodge is currently undertaking throughout the UK. By autumn this year, over 80% of Travelodge rooms will feature the new modern room.

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• Vauxhall Estates has completed the acquisition of the 33-bed Travelodge Portsmouth Hilsea from M&G Real Estate for £1.7m, representing a 6.1% net initial yield. The former Innkeeper's Lodge hotel is leased to Travelodge with 5-yearly RPI based rent reviews until 2035. • Redefine International has purchased a purpose built Travelodge hotel at Lumina Park in Enfield, London, for £10m, representing a net initial yield of 5.5%. Constructed in 2012, the 39,000 sq. ft. hotel is let on a 33-year lease and provides 132-rooms across four floors along with a ground floor reception area, cafeteria and bar. • Legal & General Property, on behalf of its Linked Pensions Fund, has purchased a recently developed Travelodge hotel and three retail units in the centre of High Wycombe from McLaren Property for £11m at a yield of 6.8%. The property is located immediately adjacent to one of the busiest entrances of the town’s main shopping centre, the Eden Centre, on White Hart Street. • Travelodge has appointed Karen Broughton as Sales and Marketing Director. Karen joins Travelodge from the Money Advice Service (MAS) where she was Executive Director of Marketing and Service Delivery.

Morgans Hotel Group

• reported an adjusted EBITDA of $8.2m in the first quarter of 2014, a 10% increase over the same period in 2013. This was due primarily to increases in performance at the company’s Delano South Beach hotel. • RevPAR for system-wide comparable hotels increased 2.5% despite the adverse impact of the extreme cold weather in New York and the shift of Easter to the second quarter of 2014 versus the first quarter in 2013. The Company's managed , Sanderson and St Martins Lane are not included due to major room renovations that began in the first quarter of 2014. This resulted in a decrease in RevPAR of approximately 23% in average dollars as the rooms were out of service. • In February 2014, the company refinanced its $180m mortgage loan secured by Hudson in New York and its $100m revolving credit facility secure by Delando South Beach, replacing these obligations with nonrecourse mortgage and mezzanine loands in the aggregate principal amount of $450m. • Morgans currently has multiple agreements to manage hotels that are financed and under construction, including a Mondrian project in London, a Mondrian project in Doha, Qatar, and a Delano project in Moscow. The group has also secured a franchise agreement for a Morgans Original in Istanbul, Turkey. • Michael Gross has resigned as chief executive officer of Morgans after its largest shareholder led an ouster of the board. Jason Kalisman, the company’s chairman, will take over as interim CEO.

PPHE Hotels Group

• For the first quarter of 2014, PPHE reported an increase in total revenue of 12.4% to €54.6m. On a constant currency basis, total revenue increased 9.8% to €53.4m. • RevPAR increased 11.7% to €89.8. This growth was the result of an 8.3% increase in average room rate to €123.60 and a 2.2% growth in occupancy to 72.7%. Trading since March 2014 has remained encouraging and overall results are in line with the Board’s expectations in all markets.

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• During the period, progress was made in Croatia on the renovation and conversion of Arenturist’s Hotel Belvedere, which recently reopened as the Park Plaza Belvedere Medulin. The 427-bedroom hotel will feature a 1,200 sq. m. spa with both an indoor and outdoor pool. Other hotel facilities include a revamp of Lungomare Beach restaurant, a show-cooking concept on-site and a total outdoor leisure space that covers 40,000 sq. m. • On 13 January 2014, the group sold a 50% interest in its two Berlin art'otels. The deal saw co- investor Nakash paying €3.18m for their stake in the Berlin Mitte and Berlin Kudamm properties. PPHE and Nakash will each contribute €1m towards refurbishment of both hotels. PPHE bought the properties in July 2013, with loan assistance from a Nakash affiliate. • PPHE Hotel Group has started work on its latest new hotel development in London after securing £80M of funding from Israel's Bank Hapoalim. The group expects to complete the 438- bed Park Plaza in late 2016 following the conversion of former offices at Hercules House in Lambeth.

Other

• Minor Hotel Group has added three properties in Mozambique. The properties will be reflagged to MHG's Anantara and AVANI brands later this year and take the total number of MHG properties in operation to 108 and the total number of rooms to over 13,000. • Emin Capital, headed by Jordi Badia Llorens, has acquired the Deutsche Bank building in Barcelona for €90m, and plans to spend another €60m on conversion to a 150-room Four Seasons hotel. • A 7.5 million square metre, three-hotel mega project in Egypt's popular Sharm el Sheikh region is among seven new Middle East projects unveiled by luxury hotels company FRHI as it seeks to double its regional footprint by 2020. The operator of upscale brands; Raffles, Fairmont and Swissotel on Tuesday unveiled new projects in strategic markets Saudi Arabia, the UAE, Egypt and Nigeria as it aims to grow its portfolio from 19 properties to 38. • Alfardan Hospitality and Hotels have signed a deal to launch a five-star hotel on The Pearl, Qatar. The development, Marsa Malaz Kempinski - The Pearl, Doha, spans 500,000 sq. ft. and will overlook The Pearl, Qatar and the Arabian Gulf. • Z Hotels has secured £4m of finance to fund expansion. Backing from Santander will enable the company to open new properties in London and Glasgow. Z Hotels has three hotels open currently, two in London and one in Liverpool. • Dubai-based hotel operator Jumeirah Group has revealed that it has been asked to operate a new $234m resort being developed on Saadiyat Island in Abu Dhabi. Ghantoot Group and Sheikh Suroor Projects Department said last week that they are partnering on the new resort, which is slated for completion by the end of 2017. • Wasl Properties has revealed that it is set to build the first Mandarin Oriental hotel in Dubai, which would mark the luxury Asian hotel operator’s UAE debut. Mandarin Oriental had previously announced a hotel on Saadiyat Island in Abu Dhabi, but development of this was put on hold in 2012. • Chinese conglomerate, Dalian Wanda Group has completed the acquisition of the Edificio España in Madrid and has plans to open a luxury hotel with shopping center in the building. • Puma Hotels has rebranded its portfolio of 21 regional UK 4-star hotels as . The hotels were previously branded as Paramount Hotels and more recently as Barcelo Hotels until the Spanish operator exited its lease agreement in 2012 and the group resumed control.

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• Langham Hospitality Group announced an agreement with DAS Real Estate to manage The Langham resort in Dubai, UAE. Located on the crescent of Palm Jumeirah and scheduled to open in 2015, this 323-room resort marks double landmark "firsts" for the Hong Kong-based hotel company: it is the group's first foray into the Middle East and the first resort in its global collection. • European tour operator TUI will add hotels and ships to its portfolio as it aims to double customers within five years. A new hotels and resorts brand is promised, along with expansion of its Riu and Robinson flags. • The LVMH Hotel Management group continues to develop its brand Cheval Blanc. After launching a new hotel in the Maldives at the end of 2013, LVMH Hotel Management is preparing to reveal the new luxury hotel Saint Barth Isle de France, which it acquired in 2013 and which is scheduled to open in Fall 2014 under the Cheval Blanc banner. • Airbnb has raised $450m (£268m) in its latest fundraising, which values the business at $10bn. Investment in the San Francisco-based business was led by private equity company TPG, with other investors understood to include Dragoneer, Sequoia and T. Rowe Price. • Movenpick has signed to reflag the 184 room Husa Casablanca Plaza hotel in Morocco. The hotel is the company's third venture in the country, where it first opened a hotel open in 2001. The five star hotel was renovated in 2011, and Movenpick willl carry out further improvements while the property remains open. The company has a further hotel in Marrakesh due to open in 2015. • Shangri-La Hotels and Resorts have signed a management contract for Le Touessrok, Mauritius. The group will take over management of the resort in August 2014 and will reflag and launch the hotel as Shangri-La's Le Touessrok Resort & Spa, Mauritius in September 2015 following a renovation. • Millennium & Copthorne Hotels has launched its new Monogram Collection with the recently acquired Chelsea Harbour Hotel in London becoming the first hotel under a new portfolio of “individual, historic, stylish or unique characters – ranging from heritage to designer lifestyle hotels.” • Hong Kong-based group Dorsett Hospitality International has announced ambitions to open up to 10 hotels in London. The company is set to launch its first hotel in the capital - the £50m, 317-bedroom Dorsett Shepherd Bush – on 24 June, with the 275-bedroom Dorsett City, costing £45m, due to open in 2016. Alongsaide an existing portfolio of 18 hotels in Hong Kong, China, Singapore and Malaysia, the Shepherds Bush hotel will be the group’s first property in Europe. • South Africa's leading gaming, entertainment and leisure group, Tsogo Sun Holdings Ltd has acquired a 25% stake in hotel management company Redefine|BDL for £8.1m. Following the deal, Redefine International's stake in the business has been reduced to 25%.

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