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October 24, 2011 FINANCIAL FEASIBILITY STUDY: Courtyard by Marriott XxxxxxxxxxxXxx Xxxxxxxxxxx xxxx Xxxxxx Xxxxxx Xxxxxxxx Victoria, Texas 77904

This study has been prepared to determine the financial feasibility of developing and operating a 108 unit Courtyard by Marriott hotel in the Victoria Mall, in Victoria, Texas. The hotel site is located adjacent to the Cinemark Theater, and is expected to open in July of 2013. The 2.2 acre site is convenient to many restaurants, businesses, and other local amenities, as well as to the main traffic corridors through the area. With proper signage the it should have good visibility, with easy access for area travelers and industrial workers.

Project quality is set to meet the physical and operating standards of the Courtyard brand, a product of Marriott Corporation. All projections herein are based on operating this hotel as a Courtyard, and retaining the brand in good standing at the time of an assumed sale after 10 years. Actual market acceptance for a Courtyard by Marriott has been quantified versus market averages, and has been assumed in developing this study. Operating costs are set at the level of similar 'Select-Service’ hotels in the region.

KEY FINDING: Developing and opening a Courtyard by Marriott at this site should generate an unleveraged, pre-tax return on total invested capital exceeding 14%, with a return on equity exceeding 45%. This is a good hotel investment. This return on invested capital also assumes that improvements per unit are completed at the developer’s estimated cost of $128,704, plus land cost of $1,100,000. Project details follow:

PO Box 120055, San Antonio, TX 78212 ♦210-734-3434♦ Fax 210-735-7970 ♦ www.SourceStrategies.Org Page 2 of 97

Total Investment1

Est. Land Investment $ 1,100,000 for 2.2 acres Improvements $13,900,000 @ $128,704 per unit Total Investment $15,000,000 Pre-Tax Project Return 14.39%2 Pre-Tax Return on Equity 45.23%3

This study incorporates the current downturn in the Texas hotel market, caused by the broader national recession, which began in late 2008. In our Market section, we highlight the historical hotel performance in Texas, noting the effect of past recessions. While every market has its own unique characteristics, our projections for the local area market consider how the lodging industry reacts in times of economic downturn and in normal times. We anticipate that the current downturn will continue to impact subject markets through 2011, followed by a slow, long-term period of recovery. See the Market section for more details.

With a planned July 2013 opening, cash flow market projections for the Courtyard by Marriott, Victoria, before taxes and after renovation reserves, should be available for debt service, income tax and dividends as follows:

Occupancy Average $ Total Percent $ Rate REVPAR Revenue CashFlow** Year I 69.2% $120.38* $83.34 $3,958,596 $1,504,524 Year II 74.5% $132.52 $98.75 $4,690,753 $1,877,484 Year III 75.6% $139.72 $105.66 $5,018,900 $2,039,058 Year IV 74.9% $144.59 $108.30 $5,144,372 $2,092,538 Year V 74.5% $148.92 $111.01 $5,272,981 $2,143,409 Year VI 73.7% $151.90 $111.88 $5,314,545 $2,145,285 Year VII 72.8% $154.94 $112.76 $5,356,437 $2,146,834 Year VIII 72.3% $157.26 $113.65 $5,398,659 $2,143,572 Year IX 71.9% $159.21 $114.55 $5,441,215 $2,137,388 Year X 72.0% $160.80 $115.73 $5,497,481 $20,760,690***

*Year I ADR equates to approximately $115 in current market dollars.**Before Income Tax & Financing expense, but reflecting $2,554,644 in reserves for capital expenditures / property renovation ($23,655 per unit). ***assumes valuing property at Year 10 cash flow at an 11% return-to-buyer, less 4% expense of sale, plus year 10 cash flow.

1 developer's estimate of investment in improvements and land. 2 after reserve for on-going renovations 3 assuming 23% equity and 77% debt at a 6% pre-tax debt cost; calculated weighted average. Page 3 of 97

The above cash flow, assuming a Year 10 sale, has been discounted at the rate of 14.39% to a present value of $15,004,709, approximating the total budgeted investment of $15,000,000. This 14.39% is the project's unleveraged return, provided capital is kept at this level.

An estimated capital budget for construction and FF&E of $128,704 per unit 'turn-key' costs for a hotel of this size and quality is above average for the brand, in our experience. If capital outlays vary from budget for this project, returns will vary accordingly. The following table illustrates the linear nature of financial returns as capital requirements escalate or decline and revenue streams remain stable.

Effect on Returns if Capital Investment Changes4 Improvements Budget Land Total Discounted Cash Flow Variance Per Unit Total Cost Investment Total Proj On Equity (85%) $109.4 $11,815 $1,100 $12,915 17.16% 57.10% (90%) $115.8 $12,510 $1,100 $13,610 16.17% 52.86% (95%) $122.3 $13,205 $1,100 $14,305 15.25% 48.92% BUDGET $128.7 $13,900 $1,100 $15,000 14.39% 45.23% (105%) $135.1 $14,595 $1,100 $15,695 13.59% 41.80% (110%) $141.6 $15,290 $1,100 $16,390 12.84% 38.59% (115%) $148.0 $15,985 $1,100 $17,085 12.13% 35.55%

4 Discounted Cash Flow / Internal Rate of Return. Page 4 of 97

The critical statistic used in this study is REVPAR. REVPAR means revenue per available room per day, and reflects the average daily room revenue yield of every room in a property or market (not just occupied rooms). REVPAR is generated by multiplying occupancy times rate (i.e. REVPAR = % occupancy times average daily rate), and is the most effective and important tool in the evaluation of the success of any lodging concern.

A detailed look at Year III shows the following:

Year III 2015/2016

Room Revenues $4,165,062 Total Revenues $5,018,900 Income Before Fixed Costs $2,605,703 (51.9%) Net Income Before Tax & Fin. $1,933,593 (38.5%) Cash Flow Before Financing $2,039,058 (40.6%)5 Occupancy % 75.6% Average Daily Rate $139.72 $ REVPAR $105.66 Per Occupied Room Cost $ 57.88

SUMMARY OF CRITICAL ASSUMPTIONS: Critical assumptions are summarized as follows, with the Market History and Projection study (page 11) following the Methodology section (page 7).

1. Projections of the local area market reflect a mixture of old properties and newer competitive hotels. The average hotel room in the local market is 21 years old, over two-thirds of the way through the life cycle of the typical hotel building, and well past its peak performing years. The typical hotel building becomes stylistically and structurally obsolete after 30 years, though this figure is larger for high-rise/concrete structures. The local market has 1,238 hotel rooms built before 1990, and 752 rooms built since that date. There is typically a wide and dramatic gap between the performance of new and older properties, with the typical hotel in the area either being relatively new and competitive or older and on its way to closure.

5 Before deductions of loan principal and interest, before income tax deductions, and before any equity payout.

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For this region of Texas, one that is highly impacted by extremely strong demand for hotel rooms, we expect that long term demand will moderate and a large amount of new hotels will be built (though this will be partially offset by the closure of many of the older hotels in the market).

We are comfortable with market projections. After rising sharply in the past 12 months due a major influx of oil and gas industry revenue, and the recovery from recession, occupancy is expected to recede to an equilibrium level of 56%. Further, REVPAR growth in this market is projected to moderate, increasing only 1.6% annually over the next nine years, following the recent unsustainably high level of growth (7.8% per year for the last four years). Market projections commence on page 16.

VICTORIA & SURROUNDING COUNTIES MARKET6

Year Occupancy % $ REVPAR 2002 49.0% $ 23.37 2004 52.1% $ 25.43 2006 53.2% $ 29.71 2008 57.3% $ 35.66 2010/11 60.9% $ 42.547 Projected 2013 56.3% $ 42.30 2018 55.5% $ 48.37

Historical Annual Compound Growth Rates Past 9 Year Average 2.2% 6.7% Past 4 Year Average 2.6% 7.8% Past Year Average 27.3% 41.5%

Future Annual Compound Growth Rates Next 9 Years -1.0% 1.6% Next 5 Years -1.9% -0.9%

2. Versus the local market's REVPAR dollar projections, the REVPAR index of the proposed Courtyard by Marriott ramps upwards, and peaks at 238% of the market average REVPAR in Years III-V. Thereafter, the REVPAR Index declines due to the normal aging cycle. Detailed REVPAR derivation and subsequent projections commence on page 25.

6 Victoria & Surrounding Counties Area: Victoria, Refugio, Goliad, DeWitt, Lavaca, Jackson, Calhoun. 7 12 months ending June 30, 2011. Page 6 of 97

COURTYARD BY MARRIOTT DERIVATION

Data in 2010/11 $’s Year I Year II Year III Base: Name Type & Quality 1.63 1.63 1.63 x Brand Age Adjustment 1.01 1.01 1.01 x Site Value Adjustment 1.20 1.20 1.20 x Size Adjustment 1.08 1.08 1.08 x Other Adjustments 1.00 1.00 1.00 x Newness Adjustment 0.92 1.07 1.12 =Theor. REVPAR Index 196% 228% 238%

x Current Market REVPAR Av $42.54 $42.54 $42.54 = Projected Performance $83.32 $96.90 $101.43

The projected REVPAR performance of the subject hotel, versus the local area market average REVPAR reflects the fact that this hotel is expected to perform at a level above the moderating market average. The hotel's REVPAR index starts in Year I at 196% of the market, rises to it’s peak of 238% in Years III-V, then slowly loses ground versus the local market's inflationary growth:

3. Expenses are set at the level of similar, high-quality suite hotel products from Smith Travel Research Host Reports operating statistics, inflated at 3% per annum. See page 41 for details. Page 7 of 97

METHODOLOGY

In order to develop Pro Forma financial results for the proposed project, two major sets of assumptions have been developed. First, the future market's average REVPAR is forecast on a reasonable and economically-sound basis; the performance of the project is dependent on this market forecast and varies from it only due to specific variables of the project. Second, the specific variables of the project are combined and expressed as an index for each quarter of the forecast, an index that is used to adjust the overall market performance to the specific project. MARKET REVPAR FORECAST The Victoria & Surrounding Counties Region market8 is examined historically and projected. The key in the market projections is to stabilize the market in the future at a sustainable, average equilibrium for occupancy, a level which we have determined to be approximately 57% in markets of this type. Over the 20 years from 1989 through 2009, according to the Source Strategies, Inc. database, hotel occupancy in Texas has averaged 60%. This occupancy level is highly relevant as a long-term, equilibrium occupancy, a level where investors are neutral about adding new hotel rooms to the market and an average that will reoccur over long periods of time (e.g. 20 years).

Market projections are based on growth rates in real demand (roomnights sold), prices (average daily rates), and supply (rooms available). The REVPAR projection of the local market is then the pro forma market environment of the proposed subject development; the project will vary from the norm for only project-specific differences, and then only relatively.

PROJECT SPECIFIC VARIABLES: DEVELOPMENT OF PROJECT REVPAR INDICES The first variable from the averages to be developed has to do with the fact that each product type and brand have a typical and identifiable influence on REVPAR performance. This variable is based on its consumer acceptance, its product definition, its level

8Victoria & Surrounding Counties Area: Victoria, Refugio, Goliad, DeWitt, Lavaca, Jackson, Calhoun. Page 8 of 97 of quality, the price it can command from the consumer, its marketing efforts, and other factors. The value of the brand and product type is termed the Base Value.

The second adjustment used on the dollar value of the local area's REVPAR is the Brand Age Adjustment. This is made to reflect the average age of similarly branded hotels on the subject property's performance versus the market average. The opening dates of Courtyard by Marriott hotels in similar areas were examined in order to quantify this factor.

The next step to developing a project REVPAR index is to determine any further adjustment based on any deviation from a normal project Size. If the number of proposed rooms in the project is significantly above or below the average for that brand and product-type, its performance will also vary from the norm. A lower than average number of rooms should increase per room performance and vice versa. This is due to the fact that consumer demand for a single brand is demand at the project's site, regardless of the number of rooms offered by the hotel (a minor exception here would be a convention hotel).

An empirical proof of this evaluation of Size is the major increase in volume enjoyed by numerous hotels throughout Texas that have split into two branded operations, using two different names. For example, the Hilton Hotel Towers Austin added $1,000,000 annually to revenues by splitting off its adjacent, ground-based rooms as a Super 8 Motel. By creating another brand, the Super 8 began to fill demand for budget properties in the immediate area, while the Hilton Towers kept its current upscale customer base. Hence, smaller room counts than average generate higher occupancy than average. Further proof is the correlation between project size and occupancy: the smaller the property, the higher the occupancy.9

A further, 'Other,' segment adjustment may be made if the proposed product type is under- or over- supplied in the local market, or for other factors. For example, a product type commanding 10% of the Texas market - but zero locally - would command a higher daily rate or occupancy locally because it is a relatively scarce commodity. Further, a subject product far exceeds the product quality of the brand average, then a positive adjustment should be made to

9 Study detailed in size factor derivation in analysis section.

Page 9 of 97 reflect a better product than normal. While there is usually a reasonably consistent pattern of site factors for the nearby local chain properties selected, these factors often vary because of unique situations, including: 1) visibility and access differences between nearby sites; 2) any large variation from the norm in the usual number of rooms for a local chain property at a site; 3) a nearby property's quality, the quality of management, last renovation, etc.; and 4) any major new commercial development nearby (e.g. shopping, office complex, hospital). Adjustments can be made for these differences within forecast site factor, based on industry experience. This is the Segment, or Other adjustment.

Then the REVPAR potential of the subject Site, regardless of brand, is developed in two ways. First, all other property factors except site are calculated for nearby competitors, the site factor then being used to bring the calculated REVPAR into a match with actual REVPAR performance. In other words, combining all factors including a 'plugged' site factor results in the theoretical REVPAR projection equaling actual REVPAR for each property studied, revealing the mathematical value of individual hotel sites.

With the development of the adjustments for Brand/product type, overall Brand Age, Segment, project Size, and Site, a revenue projection for the proposed operation begins to take form by combining these factors into a combined index that is applied to the overall market-wide REVPAR projection, resulting in the forecast of the project's dollar REVPAR. However, this combined index changes with the cumulative age the project.

Then, the physical Age of the individual project impacts this REVPAR index. A +12% increase factor is applied to the combined REVPAR index in the operating Years III-V. A first-year start-up adjustment of -8% and a second year adjustment of +7%, followed by a +12% adjustment for years III-V. This factor reflects the major revenue-generating power of new versus old properties. In the sixth year and thereafter, the REVPAR index is then diminished at a rate of 1.67% per annum in order to reflect aging and the normal life-cycle of a hotel.

This pattern of declining performance with property aging is based on major studies of economic life-cycle patterns. The first study was conducted on a census of all 25,000 Texas rooms built Page 10 of 97 between 1980 and 1982 (study published in September 1994 issues of MarketShare10 and the October 1994 issue of Hotel & Motel Management); the second investigation was conducted on all 17,231 rooms built in Texas from 1990 through 1995. These Source Strategies, Inc. studies confirm a similar, major study conducted in 1982 at the Holiday corporation on 160 company- owned and company-operated Holiday hotels.

Combining all of these factors - Product Type, Brand Age, Site, Size, Segment (other), and Newness (Age) - results in the REVPAR stream for the project. A REVPAR stream from which room revenues, estimated rate, occupancy and roomnights sold are derived. At this point, the investment and operational costs can be laid against the revenue line to generate pro forma financial performance and discounted cash flow analysis. The calculation of the statistic of Operating Costs Per Occupied Room (before fixed/capital costs are deducted) is typically the important cost to examine carefully because it is highly stable and predictable, regardless of occupancy and rate. The Smith Travel Research Host Report of Hotel Operating Statistics, 2011 edition (2010 data) with dollar costs inflated, and Source Strategies, Inc. financial models are the source of operating cost statistics.

From national average occupancies, costs are categorized as fixed, semi-variable or variable, resulting in the highly-leveraged profit performance characteristic of lodging products, depending on occupancy and REVPAR performance (i.e. variable costs increase proportionately with higher occupancy levels while fixed costs do not). Furthermore, with a capital expenditures profile provided by the International Society of Hospitality Consultants' CapEx, A Study of Capital Expenditures in the U.S. Hotel Industry, a method has been applied to determine an appropriate amount of renovation reserves to ensure that the property is maintained at the franchisor's required level.

All study-area individual hotel/motel five year histories are included in the study, using the Source Strategies, Inc. database of all Texas hotels and motels (includes each hotel’s brand, room count, room revenue, occupancy, rate and REVPAR). The methodology of this database is attached as an exhibit.

10 Now Hotel Brand Report. Page 11 of 97

MARKET REVPAR HISTORY: TEXAS

1. Since 1980, the State of Texas (and the wider U.S. market) has experienced other instances of economic turmoil such as the current recession. In 1982-1983 the Texas market suffered through six consecutive quarters of major demand declines, with a sharp plummet of 24% in the first quarter of 1983.

Two years later, every quarter in 1986 posted significant demand decreases of 19% or more.

Before the recent recession, the most recent period of decline was in 2001, during which the onset of a recession was coupled, and accelerated by, the terrorist attacks of 9/11. Beginning in the Third quarter of 2001, seven of the next eight quarters showed declining room demand, and it was not until the first quarter of 2004 that healthy levels of growth resumed.

We have considered the historical market patterns in formulating our projections for all market projections. Though there are differences in each economic downturn, and areas across the state are impacted differently depending on factors driving demand, there is much that can be discerned from historical negative trending performances and the patterns of subsequent periods of recovery.

Historical quarterly periods of economic decline and recession are highlighted in the Texas market data that follows overleaf: Page 12 of 97

HOTEL MARKET: STATE OF TEXAS - 1980-1989

# Room-1 Total Htls nites Rooms % Growth Vs Yr Ago Year & and # sold Revenue % 2 $ 3 $ 4 Quarter Mtls Rooms 000's $ 000's Occ. Rate RPAR Sply Real ADR $ Rev 801 1,694 138,446 9,012 286,171 72.3 31.76 22.97 802 1,859 143,967 9,593 321,352 73.2 33.50 24.53 803 1,941 147,589 10,077 331,532 74.2 32.90 24.42 804 1,827 150,272 9,430 296,137 68.2 31.40 21.42 811 1,808 149,062 10,268 349,319 76.5 34.02 26.04 7.7 13.9 7.1 22.1 812 1,990 154,783 11,102 398,057 78.8 35.85 28.26 7.5 15.7 7.0 23.9 813 2,065 157,359 12,026 429,629 83.1 35.73 29.68 6.6 19.3 8.6 29.6 814 1,941 159,855 10,955 368,202 74.5 33.61 25.04 6.4 16.2 7.0 24.3 821 1,944 159,719 11,275 410,194 78.4 36.38 28.54 7.1 9.8 6.9 17.4 822 2,072 164,022 11,554 448,560 77.4 38.82 30.05 6.0 4.1 8.3 12.7 823 2,122 168,756 11,239 426,972 72.4 37.99 27.50 7.2 -6.5 6.3 -0.6 824 1,909 169,962 9,383 340,781 60.0 36.32 21.79 6.3 -14.4 8.1 -7.4 831 1,927 171,393 8,574 326,286 55.6 38.06 21.15 7.3 -24.0 4.6 -20.5 832 2,098 177,954 9,118 367,533 56.3 40.31 22.70 8.5 -21.1 3.8 -18.1 833 2,192 181,281 9,574 378,280 57.4 39.51 22.68 7.4 -14.8 4.0 -11.4 834 1,988 181,046 8,445 320,928 50.7 38.00 19.27 6.5 -10.0 4.6 -5.8 841 2,059 185,074 9,110 370,661 54.7 40.69 22.25 8.0 6.3 6.9 13.6 842 2,263 193,838 9,777 417,810 55.4 42.73 23.69 8.9 7.2 6.0 13.7 843 2,343 198,581 10,267 440,975 56.2 42.95 24.14 9.5 7.2 8.7 16.6 844 2,144 198,042 8,762 357,849 48.1 40.84 19.64 9.4 3.8 7.5 11.5 851 2,168 201,426 11,088 462,103 61.2 41.68 25.49 8.8 21.7 2.4 24.7 852 2,396 207,832 12,005 525,445 63.5 43.77 27.78 7.2 22.8 2.4 25.8 853 2,456 210,876 12,004 521,612 61.9 43.45 26.89 6.2 16.9 1.2 18.3 854 2,201 210,122 10,095 422,314 52.2 41.83 21.85 6.1 15.2 2.4 18.0 861 2,221 209,942 8,935 394,611 47.3 44.16 20.88 4.2 -19.4 6.0 -14.6 862 2,366 216,430 9,484 438,490 48.2 46.24 22.26 4.1 -21.0 5.6 -16.5 863 2,398 216,313 9,335 433,948 46.9 46.49 21.81 2.6 -22.2 7.0 -16.8 864 2,162 214,530 8,011 354,767 40.6 44.29 17.97 2.1 -20.6 5.9 -16.0 871 2,125 211,297 9,822 439,986 51.6 44.80 23.14 0.6 9.9 1.4 11.5 872 2,323 217,846 10,613 469,942 53.5 44.28 23.71 0.7 11.9 -4.2 7.2 873 2,488 223,226 11,609 513,072 56.5 44.20 24.98 3.2 24.4 -4.9 18.2 874 2,288 220,113 8,703 389,235 43.0 44.72 19.22 2.6 8.6 1.0 9.7 881 2,225 216,646 10,651 480,022 54.6 45.07 24.62 2.5 8.4 0.6 9.1 882 2,328 219,194 11,468 519,279 57.5 45.28 26.03 0.6 8.1 2.3 10.5 883 2,394 220,718 12,179 551,823 60.0 45.31 27.18 -1.1 4.9 2.5 7.6 884 2,183 217,487 10,408 468,241 52.0 44.99 23.40 -1.2 19.6 0.6 20.3 891 2,139 214,433 10,972 505,830 56.9 46.10 26.21 -1.0 3.0 2.3 5.4 892 2,254 216,409 12,152 568,731 61.7 46.80 28.88 -1.3 6.0 3.4 9.5 893 2,380 219,464 13,087 606,723 64.8 46.36 30.05 -0.6 7.5 2.3 9.9 894 2,143 214,991 10,915 505,305 55.2 46.30 25.55 -1.1 4.9 2.9 7.9

1. Room nights sold (derived from est. rate and actual revenues) 2. Occupancy nights sold divided by nights available for sale. 3. Avg. price for room nights sold; Directories, Surveys, & experience. 4. $ Revenue per available room per day (room sales per day) Page 13 of 97

HOTEL MARKET: STATE OF TEXAS - 1990-1999

# Room-1 Total Htls nites Rooms % Growth Vs Yr Ago Year & and # sold Revenue % 2 $ 3 $ 4 Quarter Mtls Rooms 000's $ 000's Occ. Rate RPAR Sply Real ADR $ Rev 901 2,129 214,419 11,679 554,170 60.5 47.45 28.72 -0.0 6.4 2.9 9.6 902 2,311 218,824 12,840 624,482 64.5 48.64 31.36 1.1 5.7 3.9 9.8 903 2,488 223,343 12,708 629,223 61.8 49.51 30.62 1.8 -2.9 6.8 3.7 904 2,195 215,581 10,531 513,588 53.1 48.77 25.90 0.3 -3.5 5.3 1.6 911 2,288 216,607 11,476 565,424 58.9 49.27 29.00 1.0 -1.7 3.8 2.0 912 2,450 220,230 12,714 652,416 63.4 51.31 32.55 0.6 -1.0 5.5 4.5 913 2,489 221,280 13,203 669,743 64.9 50.73 32.90 -0.9 3.9 2.5 6.4 914 2,288 217,777 11,146 556,396 55.6 49.92 27.77 1.0 5.8 2.4 8.3 921 2,311 218,438 11,593 595,139 59.0 51.34 30.27 0.8 1.0 4.2 5.3 922 2,488 222,368 12,751 675,369 63.0 52.97 33.38 1.0 0.3 3.2 3.5 923 2,548 223,434 13,690 721,311 66.6 52.69 35.09 1.0 3.7 3.9 7.7 924 2,359 219,803 11,488 593,804 56.8 51.69 29.36 0.9 3.1 3.5 6.7 931 2,364 220,328 11,903 630,049 60.0 52.93 31.77 0.9 2.7 3.1 5.9 932 2,526 223,631 12,955 711,191 63.7 54.90 34.95 0.6 1.6 3.6 5.3 933 2,587 225,580 14,033 762,508 67.6 54.34 36.74 1.0 2.5 3.1 5.7 934 2,382 221,392 11,714 625,100 57.5 53.36 30.69 0.7 2.0 3.2 5.3 941 2,414 222,471 12,287 671,853 61.4 54.68 33.56 1.0 3.2 3.3 6.6 942 2,593 227,497 13,565 773,762 65.5 57.04 37.38 1.7 4.7 3.9 8.8 943 2,666 230,187 13,848 787,544 65.4 56.87 37.19 2.0 -1.3 4.7 3.3 944 2,475 226,119 12,215 677,868 58.7 55.50 32.59 2.1 4.3 4.0 8.4 951 2,457 225,028 12,549 738,394 62.0 58.84 36.46 1.1 2.1 7.6 9.9 952 2,604 229,116 13,526 810,170 64.9 59.90 38.86 0.7 -0.3 5.0 4.7 953 2,701 234,593 14,117 841,494 65.4 59.61 38.99 1.9 1.9 4.8 6.9 954 2,602 232,201 12,326 722,297 57.7 58.60 33.81 2.7 0.9 5.6 6.6 961 2,596 233,619 13,221 823,051 62.9 62.26 39.14 3.8 5.4 5.8 11.5 962 2,740 239,156 14,047 878,542 64.5 62.54 40.37 4.4 3.9 4.4 8.4 963 2,735 242,809 14,040 875,250 62.9 62.34 39.18 3.5 -0.5 4.6 4.0 964 2,666 241,679 12,572 775,657 56.5 61.70 34.89 4.1 2.0 5.3 7.4 971 2,694 245,315 13,353 861,700 60.5 64.53 39.03 5.0 1.0 3.6 4.7 972 2,774 250,349 14,720 965,813 64.6 65.61 42.39 4.7 4.8 4.9 9.9 973 2,838 254,368 14,874 968,988 63.6 65.15 41.41 4.8 5.9 4.5 10.7 974 2,800 257,088 13,470 873,191 57.0 64.83 36.92 6.4 7.1 5.1 12.6 981 2,847 258,388 14,390 965,828 61.9 67.12 41.53 5.3 7.8 4.0 12.1 982 2,930 263,497 15,481 1,057,929 64.6 68.34 44.12 5.3 5.2 4.2 9.5 983 3,019 270,763 15,927 1,053,109 63.9 66.12 42.28 6.4 7.1 1.5 8.7 984 2,978 271,238 14,316 941,569 57.4 65.77 37.73 5.5 6.3 1.4 7.8 991 3,047 277,678 15,010 1,023,911 60.1 68.22 40.97 7.5 4.3 1.6 6.0 992 3,129 282,933 15,996 1,125,938 62.1 70.39 43.73 7.4 3.3 3.0 6.4 993 3,220 290,145 16,562 1,111,162 62.0 67.09 41.63 7.2 4.0 1.5 5.5 994 3,208 289,149 14,552 968,974 54.7 66.59 36.43 6.6 1.7 1.2 2.9

1. Roomnights sold (derived from est. rate and actual revenues) 2. Occupancy nights sold divided by nights available for sale. 3. Avg. price for roomnights sold; Directories, Surveys, & experience. 4. $ Revenue per available room per day (room sales per day) Page 14 of 97

HOTEL MARKET: STATE OF TEXAS - 2000-2011

# Room-1 Total Htls nites Rooms % Growth Vs Yr Ago Year & and # sold Revenue % 2 $ 3 $ 4 Quarter Mtls Rooms 000's $ 000's Occ. Rate RPAR Sply Real ADR $ Rev 001 3,226 290,046 15,883 1,114,731 60.8 70.18 42.70 4.5 5.8 2.9 8.9 002 3,356 295,709 17,001 1,232,674 63.2 72.51 45.81 4.5 6.3 3.0 9.5 003 3,388 300,371 17,187 1,219,157 62.2 70.94 44.12 3.5 3.8 5.7 9.7 004 3,360 299,047 15,228 1,064,870 55.3 69.93 38.71 3.4 4.6 5.0 9.9 011 3,411 302,343 16,517 1,188,162 60.7 71.94 43.66 4.2 4.0 2.5 6.6 012 3,536 306,089 17,222 1,239,069 61.8 71.95 44.48 3.5 1.3 -0.8 0.5 013 3,589 310,957 16,802 1,164,254 58.7 69.29 40.70 3.5 -2.2 -2.3 -4.5 014 3,535 307,914 14,483 960,167 51.1 66.30 33.89 3.0 -4.9 -5.2 -9.8 021 3,576 309,745 15,867 1,110,327 56.9 69.98 39.83 2.4 -3.9 -2.7 -6.6 022 3,684 314,166 17,012 1,225,468 59.5 72.04 42.86 2.6 -1.2 0.1 -1.1 023 3,707 318,226 16,541 1,158,407 56.5 70.03 39.57 2.3 -1.6 1.1 -0.5 024 3,644 313,988 14,713 986,554 50.9 67.05 34.15 2.0 1.6 1.1 2.7 031 3,672 316,723 15,361 1,057,864 53.9 68.87 37.11 2.3 -3.2 -1.6 -4.7 032 3,780 318,836 16,737 1,169,718 57.7 69.89 40.32 1.5 -1.6 -3.0 -4.5 033 3,805 323,624 16,776 1,162,518 56.3 69.30 39.05 1.7 1.4 -1.0 0.4 034 3,734 320,212 14,914 987,483 50.6 66.21 33.52 2.0 1.4 -1.3 0.1 041 3,747 323,147 16,239 1,145,793 55.8 70.56 39.40 2.0 5.7 2.5 8.3 042 3,878 327,926 17,518 1,237,847 58.7 70.66 41.48 2.9 4.7 1.1 5.8 043 3,913 332,549 17,679 1,264,128 57.8 71.50 41.32 2.8 5.4 3.2 8.7 044 3,829 329,158 15,951 1,082,616 52.7 67.87 35.75 2.8 7.0 2.5 9.6 051 3,852 329,449 17,015 1,214,908 57.4 71.40 40.97 2.0 4.8 1.2 6.0 052 3,983 332,254 18,593 1,391,414 61.5 74.84 46.02 1.3 6.1 5.9 12.4 053 4,048 338,115 19,173 1,449,393 61.6 75.59 46.59 1.7 8.5 5.7 14.7 054 3,962 334,144 18,561 1,383,105 60.4 74.52 44.99 1.5 16.4 9.8 27.8 061 3,978 334,912 18,910 1,479,351 62.7 78.23 49.08 1.7 11.1 9.6 21.8 062 4,121 337,788 19,328 1,609,669 62.9 83.28 52.37 1.7 4.0 11.3 15.7 063 4,184 344,093 19,733 1,606,206 62.3 81.40 50.74 1.8 2.9 7.7 10.8 064 4,093 341,556 18,004 1,439,964 57.3 79.98 45.82 2.2 -3.0 7.3 4.1 071 4,127 343,745 19,366 1,614,471 62.6 83.37 52.19 2.6 2.4 6.6 9.1 072 4,290 347,178 19,916 1,756,887 63.0 88.21 55.61 2.8 3.0 5.9 9.1 073 4,340 353,440 20,324 1,743,413 62.5 85.78 53.62 2.7 3.0 5.4 8.5 074 4,248 350,908 18,594 1,564,612 57.6 84.15 48.46 2.7 3.3 5.2 8.7 081 4,276 353,555 19,690 1,738,726 61.9 88.31 54.64 3.1 1.7 0.2 -0.9 082 4,463 359,217 20,654 1,919,396 63.2 92.93 58.72 3.6 3.7 8.5 10.3 083 4,524 366,163 21,246 1,907,486 63.1 89.78 56.62 3.8 4.6 7.0 22.3 084 4,338 360,500 19,285 1,694,290 58.1 87.86 51.09 2.7 3.7 4.4 8.2 091 4,378 366,440 18,710 1,592,799 56.7 85.13 48.30 3.6 -5.0 -3.6 -8.4 092 4,603 374,553 18,627 1,613,320 54.7 86.61 47.33 4.3 -9.8 -6.8 -15.9 093 4,789 385,834 18,572 1,598,060 52.3 86.05 45.02 5.2 -12.6 -2.3 -5.6 094 4,507 380,224 17,174 1,367,498 49.1 79.62 39.09 4.9 -10.6 -6.3 -13.9 101 4,569 385,457 19,015 1,544,141 54.8 81.21 44.51 4.6 1.8 -6.0 -4.3 102 4,782 392,775 20,075 1,725,520 56.2 85.96 48.28 4.2 7.5 -0.1 8.0 104 4,599 396,315 18,692 1,537,908 51.3 82.27 42.18 4.2 8.8 12.5 4.5 111 4,525 393,150 21,015 1,780,717 59.4 84.74 50.33 2.0 10.5 15.3 8.4 112 4,752 399,144 21,940 1,942,092 60.4 88.52 53.47 1.6 9.3 12.6 7.5 CGR% 28 yrs 3.0% 2.8% 5.8% -0.2% 2.9% 2.6% “ 20yrs 3.0% 2.8% 5.6% -0.2% 2.7% 2.5% “ 10yrs 2.8% 2.2% 4.0% -0.5% 1.8% 1.2% “ 5yrs 3.4% 1.7% 3.4% -1.7% 1.7% 0.0% “ 1yr 2.9% 10.2% 12.2% 7.2% 1.9% 9.2%

1. Roomnights sold (derived from est. rate and actual revenues) 2. Occupancy nights sold divided by nights available for sale. 3. Avg. price for roomnights sold; Directories, Surveys, & experience. 4. $ Revenue per available room per day (room sales per day) Page 15 of 97

Texas Lodging Market: Projection

Room- Yr nights $ Room % Changes to Prior Year & # # Sold Revenues % $ $ # Rooms $ Qtr Hotels Rooms (000's) (000's) Occ Rate REVPAR Rms Sold ADR Revs 113 4,955 403,648 22,063 1,934,415 59.4 $87.68 $52.09 1.0 6.0 5.0 11.3 114 4,830 399,387 19,656 1,692,568 53.5 $86.11 $46.06 1.0 5.0 5.0 10.3 121 4,898 404,961 21,456 1,902,773 58.9 $88.68 $52.21 2.0 4.0 4.0 8.2 122 5,076 408,643 22,339 2,096,926 60.1 $93.87 $56.39 2.0 4.0 4.0 8.2 123 5,105 411,720 22,946 2,092,264 60.6 $91.18 $55.24 2.0 4.0 4.0 8.2 124 4,977 407,375 20,442 1,830,681 54.5 $89.55 $48.85 2.0 4.0 4.0 8.2 131 5,046 413,060 22,315 2,058,039 60.0 $92.23 $55.36 2.0 4.0 4.0 8.2

Texas REVPAR Growth History & Projection

$70

$60

$50

$40

$30 REVPAR $'s

$20 Projection Begins

$10

$0

8 9

80 85 86 90 95 00 05 10 11 12 13 Year

Page 16 of 97

Market REVPAR History & Forecast: Local Market Performance

2. The subject hotel’s local market, the Victoria & Surrounding Counties Region, currently generates a strong REVPAR of $43 compared to the overall Texas average of $47. A major surge in oil and gas related lodging in the region is the primary driving factor behind this improved level of performance:

PERIOD: TWELVE MONTHS ENDING JUNE 30, 2011 HOTEL MARKET: VICTORIA & SURROUNDING COUNTIES REGION

# * EST. $ EST. #* RMS % RNS % AMT. % EST. $ $ BRAND HTL 000S RMS 000S RNS 000S AMT %OCC RATE RPAR BWEST 77904 1 .1 2.3 15 2.8 1,770 4.8 74.3 120.83 89.81 FAIRFIELD 77904 1 .1 2.7 16 3.1 1,573 4.3 69.1 97.44 67.34 HAMPTON 77904 1 .1 2.9 18 3.4 2,289 6.2 73.1 126.22 92.22 LA QUINTA 77904 1 .1 5.5 33 6.3 2,923 8.0 70.0 87.99 61.60 TOTAL ABOVE 4 .3 13.4 82 15.6 8,555 23.3 71.2 104.14 74.17

CANDLEWOOD 77904 .1 3.5 23 4.4 1,870 5.1 77.9 80.26 62.49

BEST WEST 4 .2 7.1 42 8.1 3,509 9.6 69.1 82.76 57.22 COMFO INN 1 .1 2.1 10 1.9 602 1.6 53.9 61.25 32.99 HOLID EXP 1 .1 4.1 26 4.8 3,098 8.4 72.8 121.46 88.43 LA QUINTA 1 .1 2.4 14 2.7 1,421 3.9 68.2 100.23 68.32 TOT LTD SVE 7 .4 15.7 92 17.5 8,631 23.5 67.9 93.90 63.73

BEST VALU 3 .2 9.1 45 8.5 1,745 4.8 57.5 38.81 22.34 DAYS INN 1 .1 4.2 16 3.1 867 2.4 45.3 53.00 23.99 MOTEL 6 2 .1 5.4 24 4.6 1,133 3.1 52.2 46.52 24.26 QUALITY 1 .1 4.2 23 4.4 1,529 4.2 63.3 66.18 41.89 SUPER 8 1 .0 2.0 13 2.5 1,173 3.2 74.7 89.63 66.98 OTHER BUD 1 .1 2.2 13 2.5 398 1.1 69.2 30.29 20.96 TOT BUDGET 9 .6 27.1 135 25.7 6,845 18.6 57.7 50.71 29.26

TOT CHAINS 21 1.4 59.6 332 63.2 25,901 70.5 64.6 77.93 50.33

INDEPENDENTS $100+ ADR 6 .1 4.5 17 3.2 2,196 6.0 42.9 131.45 56.34 $60-99ADR 5 .2 8.8 44 8.4 3,085 8.4 58.3 70.00 40.79 LT $60ADR 16 .6 27.1 133 25.3 5,535 15.1 56.8 41.66 23.67 TOT INDEP 27 1.0 40.4 194 36.8 10,816 29.5 55.6 55.86 31.04

TOT MARKET 48 2.4 100.0 526 100.0 36,717 100 60.9 69.80 42.54

* All figures annualized. Includes taxed and est non-tax room revenues. Independents are categorized by price: $100+, $60-99.99, and under $60)

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Local Market REVPAR History & Forecast:

3. Over the past nine years, the local Victoria & Surrounding Counties market has shown strong annual real growth (room-nights sold) of 4.6%, annual growth of 9.2% in total room revenues, and a 6.7% annual gain in REVPAR; note that the marked increase in regional oil and gas industry activity has effectively insulated the market from the effects of the recent recession. Occupancy increased 2.2% per year over the nine years. Supply rose by 2.3% per year, with room rates rising 4.3% annually.

Over the past four years, 4.3% annual demand gains were coupled with a gain in supply of 1.7% annually. Revenues over this period rose an average of 9.7% per year, while REVPAR increased 7.8% annually. Room rates rose 5% per year. Occupancy gained over the last four years by 2.6% per year.

Over the last two years, demand rose by 11.6% annually, and supply rose 2%. These results caused occupancy to rise sharply by 9.6% annually, followed by escalating REVPAR averaging a 15.6% gain per year. Rates rose 5.2% per year, and yearly revenues increased 17.8%.

Most recent history, the 12 months ending June 30, 2011, shows the strong recent surge for the area, driven by oil and gas industry activity. Real demand rose 32.5%, rates climbed by 11.5%, revenues rose by 47.4% and occupancy gained 27.3%. With a supply increase of 4.1%, REVPAR rose 41.5% for the average hotel. Market occupancy averaged 61% versus 60% for the state. Its also worth noting that demand overall for all hotels in Texas oil and gas producing areas produced REVPAR increases that roughly doubled those in the balance of the state (16.1% vs 8.4%).

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LODGING MARKET HISTORY: VICTORIA & SURROUNDING COUNTIES REGION

# Room1 Total Htls nites Rooms Year & and # sold Revenue %2 $3 $4 % Growth Vs Yr Ago Quarter Mtls Rooms 000's $000's Occ. Rate RevPar Sply Real ADR $Rev 013 34 1,955 100 4,582 55.8 45.69 25.48 014 33 1,907 82 3,871 46.6 47.34 22.07 021 33 1,908 81 3,842 47.1 47.50 22.38 022 33 1,908 88 4,347 50.7 49.34 25.04 023 34 1,956 94 4,468 52.0 47.73 24.83 0.1 -6.7 4.5 -2.5 024 32 1,856 78 3,609 45.8 46.11 21.13 -2.7 -4.3 -2.6 -6.8 031 32 1,856 84 3,976 50.3 47.34 23.80 -2.7 3.8 -0.3 3.5 032 33 1,872 90 4,411 52.6 49.20 25.89 -1.9 1.7 -0.3 1.5 033 34 1,952 110 5,528 61.4 50.10 30.78 -0.2 17.8 5.0 23.7 034 32 1,855 89 4,312 52.3 48.30 25.27 -0.1 14.0 4.7 19.5 041 33 1,865 82 4,012 49.0 48.76 23.91 0.5 -2.0 3.0 0.9 042 33 1,865 87 4,313 51.3 49.50 25.41 -0.4 -2.8 0.6 -2.2 043 33 1,865 98 4,849 56.8 49.71 28.26 -4.5 -11.6 -0.8 -12.3 044 33 1,883 88 4,182 51.0 47.37 24.14 1.5 -1.1 -1.9 -3.0 051 35 1,901 88 4,437 51.6 50.22 25.93 1.9 7.4 3.0 10.6 052 35 1,924 100 5,334 57.1 53.31 30.46 3.2 14.8 7.7 23.7 053 38 2,061 105 5,637 55.3 53.79 29.73 10.5 7.5 8.2 16.3 054 37 2,023 95 4,942 50.9 52.13 26.55 7.4 7.4 10.0 18.2 061 38 2,060 94 4,947 50.8 52.54 26.68 8.4 6.6 4.6 11.5 062 41 2,133 104 5,912 53.7 56.77 30.46 10.9 4.1 6.5 10.8 063 41 2,133 112 6,495 57.3 57.80 33.10 3.5 7.3 7.5 15.2 064 42 2,214 104 5,802 51.1 55.74 28.48 9.4 9.8 6.9 17.4 071 44 2,237 111 6,164 54.9 55.80 30.62 8.6 17.3 6.2 24.6 072 44 2,269 117 6,937 56.6 59.34 33.60 6.4 12.3 4.5 17.3 073 45 2,276 122 7,167 58.1 58.93 34.23 6.7 8.2 2.0 10.3 074 44 2,269 116 6,876 55.8 59.05 32.94 2.5 11.8 5.9 18.5 081 43 2,300 120 7,347 57.8 61.42 35.49 2.8 8.2 10.1 19.2 082 45 2,334 128 8,050 60.1 63.07 37.90 2.9 9.2 6.3 16.0 083 45 2,351 129 8,059 59.6 62.48 37.26 3.3 6.1 6.0 12.4 084 46 2,301 110 6,758 51.8 61.69 31.92 1.4 -5.8 4.5 -1.7 091 44 2,213 95 5,785 47.6 61.00 29.04 -3.8 -20.7 -0.7 -21.3 092 45 2,225 89 5,871 43.8 66.22 29.00 -4.7 -30.5 5.0 -27.1 093 45 2,289 100 5,939 47.6 59.28 28.20 -2.6 -22.3 -5.1 -26.3 094 42 2,226 85 4,868 41.6 57.14 23.77 -3.3 -22.3 -7.4 -28.0 101 45 2,265 104 6,338 50.8 61.17 31.09 2.3 9.3 0.3 9.6 102 46 2,307 108 7,762 51.4 71.88 36.97 3.7 21.8 8.5 32.2 103 47 2,346 121 8,513 56.3 70.10 39.44 2.5 21.2 18.3 43.3 104 46 2,324 119 7,675 55.4 64.74 35.90 4.4 39.1 13.3 57.7 111 47 2,354 140 9,216 65.9 66.05 43.50 3.9 34.7 8.0 45.4 112 51 2,435 147 11,313 66.1 77.18 51.05 5.5 35.7 7.4 45.7 CGR% Past 9 yrs 2.3% 4.6% 9.2% 2.2% 4.3% 6.7% “ 4 yrs 1.7% 4.3% 9.7% 2.6% 5.0% 7.8% “ 2 yrs 2.0% 11.6% 17.8% 9.6% 5.2% 15.6% “ 1 yr 4.1% 32.5% 47.4% 27.3% 11.5% 41.5%

1. Roomnights sold (derived from est. rate and actual revenues) 2. Occupancy nights sold divided by nights available for sale. 3. Avg. price for roomnights sold; Directories, Surveys, & experience. 4. $ Revenue per available room per day (room sales per day)

Page 19 of 97

4. Overall market occupancy is projected to erode from recent inflated levels as new supply enters the market. This translates to a steady drop in occupancies to the long-term equilibrium occupancy level of 56% over the next several years. REVPAR should experience similar moderation from current unsustainable levels, with a 1.6% increase on average over the next nine years. Couple this with room revenue growth of 5.5% annually, 2.7% annual rate increases, and 1% annual occupancy declines. Over the next nine years, real demand (room nights sold) is projected at an average 2.8% growth rate, with supply rising 3.9%.

These assumptions relative to demand, supply, and occupancy reflect the fact that over the past 20 years overall occupancy in Texas has averaged about 60%, a level considered to be 'Equilibrium Occupancy' state-wide. This fact considers that larger and more successful metro area markets generate higher overall occupancy and REVPAR numbers than state averages, while rural and Interstate highways areas lag these averages (Source Strategies, Inc. database).

'Equilibrium Occupancy' is further explained by the fact that new investment money will eventually be attracted to an under-supplied market until market occupancy falls and lower returns on capital are the result. The equilibrium occupancy point is where net, new supply is being added at about the same rate as growth in demand, and where return on investment is in balance with the cost of capital.

The local market has room for appropriately positioned new development. Higher quality new lodging products at or above mid-priced levels are performing very well in the market despite overall performance numbers being moderated by the large number of older, obsolete, budgets. These older, existing competitors are highly vulnerable to the superior attractiveness of newly- built, major-branded lodging. This pattern can be seen in the success of chain operations at or above the mid-priced levels. Given our growth assumptions, room supply consequently grows from 2,365 rooms currently to 3,304 in 2019, 40% higher and representing 939 net new rooms (gross new openings, less closings).

Note that REVPAR growth for every individual hotel unit is well below the total revenue growth of the market, with average REVPAR in our projection rising by 0.9% per annum Page 20 of 97 over the next five years. Revenues are forecast to grow at 6.7% per year on the strength of 3.8% growth in real demand – starting from the ‘trough’ of 2009 - and 2.8% growth in price (room-rates). Occupancy over the next five years is expected to drop 1.9% annually, as supply rises by 5.8% per year. If supply should grow 330 rooms over forecast (+10%), without demand also growing faster than forecast, average individual hotel REVPAR would decline by 9% versus forecast, dropping from the forecast REVPAR of $50 to $46 in 2019.

Page 21 of 97

LODGING MARKET PROJECTION: VICTORIA & SURROUNDING COUNTIES REGION

# Room1 Total Htls nites Rooms Year & and # sold Revenue %2 $3 $4 % Growth Vs Yr Ago Quarter Mtls Rooms 000's $000's Occ. Rate RevPar Sply Real ADR $Rev 113 50 2,487 128 9,337 56.0 72.90 40.81 6.0 5.5 4.0 9.7 114 52 2,463 125 8,417 55.2 67.33 37.14 6.0 5.5 4.0 9.7 121 50 2,495 147 10,110 65.5 68.69 45.02 6.0 5.5 4.0 9.7 122 55 2,581 155 12,414 65.8 80.27 52.85 6.0 5.5 4.0 9.7 123 56 2,735 134 10,001 53.2 74.73 39.74 10.0 4.5 2.5 7.1 124 58 2,710 131 9,016 52.4 69.01 36.17 10.0 4.5 2.5 7.1 131 56 2,745 154 10,829 62.3 70.41 43.84 10.0 4.5 2.5 7.1 132 61 2,839 162 13,297 62.6 82.27 51.47 10.0 4.5 2.5 7.1 133 62 3,009 140 10,713 50.5 76.59 38.70 10.0 4.5 2.5 7.1 134 64 2,981 137 9,657 49.8 70.74 35.22 10.0 4.5 2.5 7.1 141 60 2,909 161 11,599 61.4 72.17 44.30 6.0 4.5 2.5 7.1 142 65 3,010 169 14,243 61.7 84.33 52.01 6.0 4.5 2.5 7.1 143 66 3,190 146 11,475 49.8 78.51 39.10 6.0 4.5 2.5 7.1 144 69 3,160 143 10,344 49.1 72.51 35.59 6.0 4.5 2.5 7.1 151 61 2,953 163 12,067 61.4 73.97 45.40 1.5 1.5 2.5 4.0 152 67 3,055 171 14,818 61.7 86.44 53.31 1.5 1.5 2.5 4.0 153 68 3,237 148 11,938 49.8 80.47 40.08 1.5 1.5 2.5 4.0 154 71 3,207 145 10,762 49.1 74.32 36.48 1.5 1.5 2.5 4.0 161 63 2,997 166 12,554 61.4 75.82 46.54 1.5 1.5 2.5 4.0 162 68 3,101 174 15,416 61.7 88.60 54.64 1.5 1.5 2.5 4.0 163 70 3,286 151 12,420 49.8 82.48 41.08 1.5 1.5 2.5 4.0 164 72 3,255 147 11,196 49.1 76.18 37.39 1.5 1.5 2.5 4.0 171 65 3,042 168 13,061 61.4 77.72 47.70 1.5 1.5 2.5 4.0 172 70 3,147 177 16,039 61.7 90.81 56.01 1.5 1.5 2.5 4.0 173 71 3,335 153 12,921 49.8 84.55 42.11 1.5 1.5 2.5 4.0 174 74 3,304 149 11,648 49.1 78.08 38.32 1.5 1.5 2.5 4.0 181 66 3,088 171 13,589 61.4 79.66 48.89 1.5 1.5 2.5 4.0 182 72 3,194 179 16,686 61.7 93.09 57.41 1.5 1.5 2.5 4.0 183 73 3,385 155 13,443 49.8 86.66 43.16 1.5 1.5 2.5 4.0 184 76 3,353 151 12,119 49.1 80.03 39.28 1.5 1.5 2.5 4.0 191 68 3,134 173 14,137 61.4 81.65 50.12 1.5 1.5 2.5 4.0 192 74 3,242 182 17,360 61.7 95.41 58.84 1.5 1.5 2.5 4.0 193 75 3,436 157 13,986 49.8 88.83 44.24 1.5 1.5 2.5 4.0 194 78 3,404 154 12,608 49.1 82.03 40.26 1.5 1.5 2.5 4.0 201 70 3,181 176 14,708 61.4 83.69 51.37 1.5 1.5 2.5 4.0 202 75 3,291 185 18,061 61.7 97.80 60.31 1.5 1.5 2.5 4.0 203 77 3,488 160 14,551 49.8 91.05 45.35 1.5 1.5 2.5 4.0 204 80 3,455 156 13,117 49.1 84.09 41.27 1.5 1.5 2.5 4.0 211 71 3,229 178 15,302 61.4 85.79 52.65 1.5 1.5 2.5 4.0 212 77 3,340 187 18,790 61.7 100.24 61.82 1.5 1.5 2.5 4.0 213 79 3,540 162 15,138 49.8 93.32 46.48 1.5 1.5 2.5 4.0 214 82 3,507 158 13,647 49.1 86.19 42.30 1.5 1.5 2.5 4.0 221 73 3,277 181 15,920 61.4 87.93 53.97 1.5 1.5 2.5 4.0 222 79 3,390 190 19,549 61.7 102.75 63.37 1.5 1.5 2.5 4.0 9yr CGR % 3.9% 2.8% 5.5% -1.0% 2.7% 1.6% '5yrs 5.8% 3.8% 6.7% -1.9% 2.8% 0.9% HISTORY CGR% Past 9 yrs 2.3% 4.6% 9.2% 2.2% 4.3% 6.7% “ 4 yrs 1.7% 4.3% 9.7% 2.6% 5.0% 7.8% “ 1 yr 4.1% 32.5% 47.4% 27.3% 11.5% 41.5%

1. Roomnights sold (derived from est. rate and actual revenues) 2. Occupancy nights sold divided by nights available for sale. 3. Avg. price for roomnights sold; Directories, Surveys, & experience. 4. $ Revenue per available room per day (room sales per day) Page 22 of 97

5. A graph of the REVPAR history and projection for the local market shows the recent dramatic increases in overall REVPAR, and our future expectations:

Page 23 of 97

6. Occupancy is currently well above the local market’s average level of the past ten years. Our expectation is for the local market to recede to the 56% equilibrium level by the later years of our projection:

Page 24 of 97

7. Graphing the Room Nights Sold history and projection also shows the reasonable nature of the expectations for the local market, given a normal level of population growth and investment expected in the area, as well as an expected slow national economic recovery:

Page 25 of 97

PROJECT REVPAR - DEVELOPMENT OF INDICES

Within the above market REVPAR forecast, the expected performance of the proposed hotel is based on six factors. All six factors are independent and modify the market's projected REVPAR average to reflect the subject property's particular characteristics.

First, what is the Base Value? It is the effect of the Brand, including specified product quality levels. Second, what is the effect of the brand's overall Age on its average performance? Third, what is the effect of the project's Size, or room-count, on results? Fourth, are there any ‘Other’ adjustments needed to account for various factors, including under- or over-supply in the product's Segment in which the project will compete? Fifth, what is the effect of the normal Life Cycle patterns on the project (e.g. the effect of the project's Newness compared to older competition on its unstoppable way to obsolescence)? And sixth, what is the likely influence of the selected Site on results?

1. The Base Value factor sets property type/brand/product quality for a Courtyard by Marriott in this type of market at 163% of the market average REVPAR. This valuation is based on the actual REVPAR performance of the five existing Courtyard by Marriott properties currently operating in the Exhibit IV market.11 These hotels produced a REVPAR of $64.81 in the year ending June 30, 2011, compared to the Exhibit IV market average REVPAR of $39.86, as follows:

$64.81 / $39.86 = 1.63 or 163%

This sample of Courtyard by Marriott hotels firmly grounds the basic REVPAR performance that can be expected when operating such a in a comparable market, such as the existing location.

2. The second adjustment factor, Brand Aging, is set at 1.01 (1.01%), an increase in performance projections because of the age of the five Courtyard by Marriott hotels in the Exhibit IV market. These hotels were built in 1999 on average, and consequently are

11 The Exhibit IV hotel market here incorporates Texas’ major oil and gas producing counties. This large market was selected to closely mimic the local market situation/mix and to provide a wider body of information from which to draw the characteristics of specific brand performance.

Page 26 of 97 performing above the level of older comparable hotels in part due to their average physical age. This factor adjusts for the effect of the average age of the existing hotels on the brand's current performance.12 The brand age adjustment, or life-cycle adjustment, for other brands examined includes:

BRAND AGING: TEXAS MARKETS Average Brand Aging Brand Opening Adjustment Candlewood Suites 2006 0.89 Holiday Express 2006 0.89 Hampton Inn 2004 0.92 Best Western 1986 1.25 Best Value 1982 1.34 Quality Inn 1981 1.36

3. The property Size factor - reflecting room count - calls for a small performance adjustment of +8% for this property. The average Courtyard by Marriott hotel in the Exhibit IV market has 134 rooms, more than the subject’s 108 units, giving this property an advantage in this case.

The size factor assigns a premium if the property is smaller than average and a penalty to the property if it is larger than average. The size adjustment is necessary because demand is not affected by the number of rental rooms offered, as the individual consumer only needs one room: customers do not care whether a hotel offers 100, 125 or 150 rooms and their purchasing behavior will be the same regardless of how many rooms the property offers. Keeping a project conservatively sized assures a higher per-unit revenue yield, particularly in very competitive markets like the local area. The highly-positive effect on revenues and return on capital due to building small, and not 'over-sizing' projects is best explained by the following study, a study that can be replicated with any brand, in almost any situation. The net effect of building small is to run higher occupancy and rate, thereby increasing brand REVPAR by building a below- average number of rental units.

12 Point #5, below, adjusts for the physical life-cycle of the subject property, a different and additional consideration. Page 27 of 97

A STUDY OF THE EFFECT OF HOTEL SIZE ON PERFORMANCE IN THE TEXAS HOTEL INDUSTRY THE CASE FOR DOWNSIZING NEW HOTELS13

Source Strategies, Inc., has long contended that the number of rooms a developer offers in a new property is one of the key factors in determining a venture's relative success or failure. It is every bit as important to size a hotel project properly as it is to select the appropriate brand, and to have chosen to develop in a suitable market and location.

For the purposes of this study, we analyzed two separate samplings of hotels. We first looked at Comfort Inns across Texas as a selected brand sampling; then we examined all branded hotels built during a set period of time for a wider sampling.

1) COMFORT INN - ANALYSIS OF SIZING AND ITS IMPACT ON PERFORMANCE In our initial analysis, we selected a group [55 properties] of Texas Comfort Inn branded properties ranging in size from 36 to 75 rooms. The following chart of performance statistics clearly illustrates the fact that on average, the smaller property will perform better, in terms of REVPAR and occupancy, than a larger property of the same brand:

12 Months Ending September 30, 1999 Rooms Occupancy Rate REVPAR 36-40 66.9 55.25 36.95 41-45 65.3 57.34 37.45 46-50 66.5 57.38 38.17 51-55 62.8 56.02 35.20 56-60 61.8 54.26 33.55 61-65 56.6 55.33 31.33 66-70 44.6 45.71 20.41 71-75 43.8 44.20 19.38 Combined: 52 63.2 55.46 35.03

Further, properties with lower room counts were clearly able to sustain a higher level of occupancy. Average occupancy ranged from 66.9% for properties of 36-40 rooms, downward to a much lower 43.8% average occupancy for properties in the 71-75 room size bracket.

13 Analyzed and compiled by Douglas W. Sutton and Bruce H. Walker.

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The above chart and graph clearly illustrate that developers often miss the mark, building more rooms than 'optimum'. 'Optimum' is defined as generating the highest return on invested capital, and is closely tied to occupancy and REVPAR. Analyzing the above data provides a measure of the effect of over-building. For the typical range of rooms for Comfort Inn projects occupancy dropped 23 points (a full 35%) from 67% to 44% as room counts escalated. The key question is, 'how to apply this principle to a given hotel project.' Naturally, each project would have to be judged on its individual merits, but looking at an 'average' project for a single brand and product is very revealing. BRANDED HOTELS - ANALYSIS OF SIZING AND ITS IMPACT ON PERFORMANCE In our second analysis, we looked at a sampling [91 properties] of Texas branded hotels of less than 135 rooms which were constructed from 1970-1975. For our analysis we examined performance results from the year 1985 when all subject hotels were 10 to 15 years old, to well into their aging life cycles. The following table of performance statistics from 1985 for branded properties throughout Texas clearly illustrates the downward curve, with a pronounced and methodical erosion of performance as room counts increased:

# of Hotels Rooms Occupancy Rate REVPAR 2 00-44 70.0 37.88 26.50 3 45-59 73.9 36.13 26.71 7 60-74 66.8 31.10 20.77 14 75-89 62.7 31.65 19.86 29 90-104 60.9 32.42 19.75 16 105-119 57.8 26.25 15.18 20 120-134 55.5 29.35 16.28 Combined: 91 98 59.8 30.34 18.14

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The following graph provides a clear picture of descending performance as room counts increase. Average occupancy ranged from 70% for properties of 44 rooms or less, downward to a much lower 55.5% average occupancy for properties in the 120-134 size bracket, after peaking at 73.9% in the 45-59 size range.

The data is clear: in almost every case small hotels outperform larger ones. Common sense explains this occurrence: a successful 100 room hotel will inevitably prompt the development of one or more new, small hotels of similar quality in the immediate area. In a competitive market environment, the smaller hotel has a distinct advantage and wins - almost every time. The fact remains that if one builds a smaller than average property for a given brand, results should be improved over the average: the converse of this fact is also true.

4. Fourth, the Segment or Other adjustment factor is set at 100%, or neutral.

5. Fifth, the Aging Adjustment factor reflects the standard hotel life cycle: 92% (-8%) in Year I; 107% for Year II; 112% for Years III through V; followed by a 1.67% annual decline in the REVPAR index starting in Year VI. The aging factor also mirrors extensive studies of hotel life-cycles conducted by Source Strategies, Inc.'s principal, Bruce Walker, when heading the Holiday Corporation's strategic planning department (1979-83). It also reflects recent research on the life cycles of 25,000 Texas hotel rooms, developed from 1980 through 1982, and then again in 1990 through 1992, with each group's performance versus the market tracked to the present (MarketShare newsletter, "The Hotel Life Cycle - It's Very Real" published September 1994). Page 30 of 97

6. The last factor, Site, is set at 1.20 (120%), or above average for the local market. With the ability to measure the sites of existing hotels in Victoria, we have an easy analysis of the subject’s site potential. The site values for this property, as well as for nearby existing competitors have been developed by quantifying the influence site has had on their performance. Applying known adjustment factors to existing properties, except for a site factor, lets us solve for the site value itself. Source Strategies' site methodology 'backs into' the value of the site by matching actual performance against known factors, using the site factor as the 'plugged number.'

The differences between the closest key competitors appear to be both explainable and reasonable. The site value is 'plugged' so that projected REVPAR versus market approaches the actual REVPAR over the past 12 months. Overall, current performance of nearby existing competition and the expected supply change in the immediate area would indicate that a 120 site value for the Courtyard by Marriott would be a responsible estimate:

SITE & PROPERTY DERIVATION

BWestern Fairfld Hampton LaQuinta Candlwd All Data in 2011 $'s 77904 77904 77904 77904 77904 Base: Name Type & Quality 0.99 1.28 1.55 1.03 1.03 x Brand Age Adjustment 1.10 0.99 0.97 1.12 0.92 x Site Value Adjustment 1.39 1.24 1.22 1.40 1.32 x Size Adjustment 1.04 1.11 1.09 0.91 1.05 x Other Adjustments 1.25 1.00 1.00 1.30 1.00 x Newness Adjustment 1.08 0.91 1.08 0.76 1.12 =Theor. REVPAR Index 212% 158% 216% 145% 147%

x Market REVPAR Avg $42.54 $42.54 $42.54 $42.54 $42.54 = Projected Performance $90.32 $67.32 $91.83 $61.79 $62.56

Actual Performance $89.88 $67.34 $92.22 $61.60 $62.49 Index 100 100 100 100 100

Units in Above Subject 54 64 68 130 82 Average Units in Chain 61 85 86 95 95 Size Adjustment* 4 11 9 -9 5 Opened: 2005 1995 2005 1984 2009

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Combining all six factors that affect a hotel's REVPAR performance, we calculate that the proposed hotel's REVPAR will achieve 238% of the market average REVPAR in Years III- V, declining slowly thereafter:

COURTYARD BY MARRIOTT DERIVATION

Data in 2010/11 $’s Year I Year II Year III Base: Name Type & Quality 1.63 1.63 1.63 x Brand Age Adjustment 1.01 1.01 1.01 x Site Value Adjustment 1.20 1.20 1.20 x Size Adjustment 1.08 1.08 1.08 x Other Adjustments 1.00 1.00 1.00 x Newness Adjustment 0.92 1.07 1.12 =Theor. REVPAR Index 196% 228% 238%

x Current Market REVPAR Av $42.54 $42.54 $42.54 = Projected Performance $83.32 $96.90 $101.43

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COMBINING THE ABOVE MARKET REVPAR PROJECTION AND THE HOTEL'S REVPAR INDEX TO DEVELOP REVENUES, OCCUPANCY, AND RATE

Using the projected Year III REVPAR index of 238%, the above process generates a theoretical REVPAR of $101.43 (in latest year market dollars). This is the result of the Year III performance index of 238% (2.38) multiplied by the current market average REVPAR of $42.54.

Therefore, if the property were open today and were in its third year of operation, it should theoretically be operating at the following level against the latest year's market results: a $101.43 REVPAR computes to gross room revenues of $3,998,371 ($101.43 times 108 units times 365 days). Please note that the actual effect on the market due to the introduction of this project and other new hotels is fully reflected in subsequent pro forma market projections and financials.

In the latest year's dollars, this projection for the project's Year III revenue breaks down seasonally as follows:

Quarter Third Fourth First Second Year III Room Revenues $909,922 $828,038 $1,033,504 $1,226,907 $3,998,371 % of Year 22.8% 20.7% 25.8% 30.7% 100 Seasonal Index 90 82 105 123 100 REVPAR$ $91.58 $83.34 $106.33 $124.84 $101.43

Source Strategies, Inc.'s projections of a reasonable rate and occupancy mix, a split of the Courtyard by Marriott ’s REVPAR for occupancy and rate, in latest year dollars, would be as follows:

Quarter Third Fourth First Second Year III ADR - $ $124.29 $118.64 $137.28 $153.75 $134.13 Occupancy % 73.7% 70.2% 77.5% 81.2% 75.6% REVPAR$ $91.58 $83.34 $106.33 $124.84 $101.43

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Tests For REASONABILITY

Comparisons can be made to assess the reasonable nature of the above market and subject projections:

1. Individual property projections depend importantly on the projection of local market REVPAR - forecast to rise at a reasonable, conservative rate through 2020, starting at the current level. Over the next nine years market REVPAR is moderate slightly from the current unsustainable level, rising 1.6% per year. REVPAR encompasses the net effects of supply and demand. Over the next nine years, we are comfortable with the 2.8% real compound growth projected for the local market, lower than the projected net supply growth of 2.8% annually, and resulting in the return to the expected equilibrium occupancy level of 56% by the later years of our projection.

2. The derived Base Value of 1.63 (163%) for a Courtyard by Marriott in the Exhibit IV market area is reasonable when compared to the Base Values of other hotels in these same markets – it is one of the top performing brands. The hierarchy of REVPAR indices for selected brands is shown below:

REVPAR Index Comparison14

Hilton Garden 180 Courtyard by Marriott 163 Holiday Express 144 La Quinta 103 Best Western 99 Studio 6 63 Super 8 66

3. Developing actual adjustment factors for the existing properties - so that their projected REVPAR equals actual REVPAR - indicates why the REVPAR index projection has a high probability of being achieved. The REVPAR differences between the closest key competitors

14 Unadjusted for physical aging of each brand. Page 34 of 97 appear to be both explainable and reasonable, using the standard, Source Strategies' adjustment factor quantification. For each property, revenues are driven first by chain name affiliation and product type, and are further adjusted for size, segment, hotel age and site location. The REVPAR Index is then multiplied by the actual local area market average to generate dollar REVPAR. We also include the theoretical Year III performance of the subject hotel, as follows:

REVPAR COMPARISON

Courtyard BWestern Fairfld Hampton LaQuinta Candlwd All Data in 2011 $'s Yr III 77904 77904 77904 77904 77904 Base: Name Type & Quality 1.63 0.99 1.28 1.55 1.03 1.03 x Brand Age Adjustment 1.01 1.10 0.99 0.97 1.12 0.92 x Site Value Adjustment 1.20 1.39 1.24 1.22 1.4 1.32 x Size Adjustment 1.08 1.04 1.11 1.09 0.91 1.05 x Other Adjustments 1.00 1.25 1.00 1.00 1.30 1.00 x Newness Adjustment 1.12 1.08 0.91 1.08 0.76 1.12 = Theoretical REVPAR Index 238% 212% 158% 216% 145% 147%

x Market REVPAR Avg $42.54 $42.54 $42.54 $42.54 $42.54 $42.54 = Projected Performance $101.43 $90.32 $67.32 $91.83 $61.79 $62.56

Actual Performance Past Yr n/a $89.88 $67.34 $92.22 $61.60 $62.49 Index (Proj Vs. Actual) n/a 100 100 100 100 100 Opened: n/a 2005 1995 2005 1984 2009 # Units 108 54 64 68 130 82 Age in Years* 0 3 13 3 24 -1

4. Results from other existing nearby hotels show the need for more rooms in the area: the Hampton Inn Victoria generated a very strong $92 annual REVPAR in the past year, easily surpassing its Exhibit IV brand average of $62. Most popular mid-to-lower priced limited service products in the local area out-performed their respective Exhibit IV brand averages by a notable margin.

5. The projected REVPAR performance of the Courtyard by Marriott versus the local market average reflects the fact that this hotel’s physical quality will be high, it will have the advantage of newness, and it will offer a desirable product. The graph overleaf shows the performance of the hotel compared to the local market REVPAR projection:

Page 35 of 97

6. The graphically projected Occupancy performance of the Courtyard by Marriott versus the local market average reflects the fact that this hotel will be well above the overall market average over the course of our projection: Page 36 of 97

7. In the overall market, any new hotel will have an inordinate advantage over the old; the playing field here is not level as the lodging consumer almost always votes for 'new' versus old. From consumer research, 'new' means 'clean,' and 'old' means 'dirty' to the consumer, with cleanliness the number one consumer selection factor in lodging. The average hotel room in the local market is 21 years old, over two-thirds of the way through the life cycle of the typical hotel building, and well past its peak performing years. The typical hotel building becomes stylistically and structurally obsolete after 30 years, though this figure is larger for high- rise/concrete structures. The local market has 1,238 hotel rooms built before 1990, and 752 rooms built since that date. There is typically a wide and dramatic gap between the performance of new and older properties, with the typical hotel in the area either being relatively new and competitive or older and on its way to closure.

. VICTORIA & SURROUNDING COUNTIES REGION MARKET PROPERTIES Year # Open Rooms Local Hotel 2010 41 HOTEL TEXAS 2010 96 HOLIDAY EXPRESS HOTEL 2009 82 CANDLEWOOD SUITES 2008 30 LAGUNA RIG SERVICE 2008 57 LA QUINTA INN & SUITES 2008 43 BEST WESTERN 2008 24 FOUNTAIN HOTEL & SUITES 2007 42 BEST WESTERN REFUGIO 2006 17 BAY FLATS LODGE 2005 21 CLARK'S 2005 68 HAMPTON INN 2005 33 BEST WESTERN EXECUTIVE IN 2005 5 DERRICH DOMOV 2005 12 FALCON POINT LODGE 2005 54 BEST WESTERN VICTORIA SUNRISE 2004 8 POCO LOCO LODGE 2003 69 LONE STAR INN FMR CORDER FAMIL 2001 50 BEST WESTERN PORT LAVACA 2000 50 DISCOVERY INN FMR SUPR8/VICTOR 1999 48 SUPER 8 1999 31 CAPTAIN'S QUARTERS MOTEL 1998 19 JACKSON INN 1996 52 THE EXECUTIVE INN 1995 64 FAIRFIELD INN 1994 50 TIGRETT REAL ESTATE 1988 36 CAPTAIN'S QUARTERS 1986 44 INNS OF TEXAS FMR BVALU/INNS 1985 44 BEST VALUE INN OF TEXAS-EDNA 1985 36 ANTLERS INN

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Year # Open Rooms Local Hotel 1984 130 LA QUINTA INN #577 1984 53 CHAPARRAL MOTEL 1982 126 BEST VALUE I&S FMR RAMADA 4/03 1982 44 CHAPARRAL MOTEL 1981 99 DAYS INN PORT LAVACA 1978 94 REGENCY INN FMR DAYS 1978 50 CAMERON I&S FMR COMFO 1978 53 CHAPARRAL MOTEL 1977 40 ROYAL INN FMR WESTERNER 1976 23 THE BUDGET INN 1976 52 BUDGET HOST LA MANCHA INN 1975 80 MOTEL 6 #225 1975 49 EXECUTIVE INN FMR AMERICAN INN 1973 48 MOTEL 6 FMR SHELLFISH INN 1970 11 LINDEN HILL MOTEL 1966 100 QUALITY INN FMR HAMPTON INN 1965 26 CLOUD NINE MOTEL 1959 50 ECONOMY INN

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PRO FORMA: Applying the project derivation factor (238% Years III-V) to the quarterly local market REVPAR forecast results in the following progression:

PROJECT REVPAR PROJECTION Subject/ Year & Local Subject Market Index Quarter Market Hotel Qtr Year 133 38.70 75.85 196 134 35.22 69.02 196 141 44.30 86.82 196 142 52.01 101.93 196 196 143 39.10 89.16 228 144 35.59 81.14 228 151 45.40 103.52 228 152 53.31 121.54 228 228 153 40.08 95.40 238 154 36.48 86.81 238 161 46.54 110.76 238 162 54.64 130.04 238 238 163 41.08 97.78 238 164 37.39 88.98 238 171 47.70 113.53 238 172 56.01 133.29 238 238 173 42.11 100.23 238 174 38.32 91.21 238 181 48.89 116.37 238 182 57.41 136.63 238 238 183 43.16 101.02 234 184 39.28 91.93 234 191 50.12 117.28 234 192 58.84 137.70 234 234 193 44.24 101.81 230 194 40.26 92.65 230 201 51.37 118.21 230 202 60.31 138.79 230 230 203 45.35 102.61 226 204 41.27 93.38 226 211 52.65 119.14 226 212 61.82 139.88 226 226 213 46.48 103.42 222 214 42.30 94.12 222 221 53.97 120.08 222 222 63.37 140.98 222 222 223 47.76 104.49 219 224 43.46 95.09 219 231 55.45 121.32 219 232 65.11 142.44 219 219 CGR% 9 Yrs 2.3% 3.6% “ First 5 Yrs 2.4% 6.1%

-CGR% measured from open date- Page 39 of 97

This REVPAR forecast is then extended to room revenues - multiplying REVPAR by the number of days in each quarter and by the number of rooms in the project - and to occupancy, estimated rate and to roomnights sold:

RESULTING PROJECTION: Courtyard by Marriott Resulting Aver. Room- Year& Room Annual % Daily nghts Annual Basis Quarter Revenues Basis Occ Rate Sold RMNTES Occ. Rate 133 $753,639 69.0 $110.00 6,851 134 $685,819 65.7 $105.00 6,532 141 $843,883 69.5 $125.00 6,751 142 $1,001,801 $3,285,142 72.8 $140.00 7,156 27,290 69.2% $120.38 143 $885,883 73.7 $121.00 7,321 144 $806,163 70.2 $115.50 6,980 151 $1,006,201 75.3 $137.50 7,318 152 $1,194,494 $3,892,741 78.9 $154.00 7,756 29,375 74.5% $132.52 153 $947,856 73.7 $129.47 7,321 154 $862,559 70.2 $123.59 6,979 161 $1,076,591 77.5 $143.00 7,529 162 $1,278,056 $4,165,062 81.2 $160.16 7,980 29,809 75.6% $139.72 163 $971,553 72.6 $134.65 7,215 164 $884,123 69.2 $128.53 6,879 171 $1,103,506 77.1 $147.29 7,492 172 $1,310,008 $4,269,188 80.8 $164.96 7,941 29,527 74.9% $144.58 173 $995,841 72.3 $138.69 7,180 174 $906,226 68.9 $132.38 6,845 181 $1,131,093 76.7 $151.71 7,456 182 $1,342,758 $4,375,918 80.4 $169.91 7,903 29,384 74.5% $148.92 183 $1,003,691 71.4 $141.46 7,095 184 $913,369 68.1 $135.03 6,764 191 $1,140,009 75.8 $154.74 7,367 192 $1,353,342 $4,410,411 79.5 $173.31 7,809 29,035 73.7% $151.90 193 $1,011,603 70.6 $144.29 7,011 194 $920,569 67.3 $137.73 6,684 201 $1,148,995 74.9 $157.84 7,280 202 $1,364,010 $4,445,176 78.5 $176.78 7,716 28,690 72.8% $154.94 203 $1,019,577 70.1 $146.46 6,962 204 $927,825 66.8 $139.80 6,637 211 $1,158,052 74.4 $160.21 7,229 212 $1,374,762 $4,480,215 78.0 $179.43 7,662 28,489 72.3% $157.26 213 $1,027,613 69.6 $148.65 6,913 214 $935,139 66.3 $141.90 6,590 221 $1,167,181 74.2 $161.81 7,213 222 $1,385,598 $4,515,531 77.8 $181.22 7,646 28,362 71.9% $159.21 223 $1,038,240 69.6 $150.14 6,915 224 $944,809 66.4 $143.31 6,593 231 $1,179,250 74.2 $163.43 7,216 232 $1,399,926 $4,562,225 77.8 $183.04 7,648 28,372 72.0% $160.80 233 $1,048,976 69.6 $151.64 6,918 234 $954,579 66.4 $144.75 6,595 241 $1,191,444 74.3 $165.06 7,218 242 $1,414,402 $4,609,402 77.8 $184.87 7,651 243 $1,059,823 69.6 $153.16 6,920 CGR % 9 Yrs 3.6% 0.4% 3.2% 0.4% “ First 5 Yrs 6.1% 1.3% 4.7% 1.2%

-CGR% measured from open date- Page 40 of 97

OPERATING COSTS15

Profitability and returns reflect the above revenue projections and the following other critical assumptions: operating costs per occupied room approximate Limited Service hotels of similar size, rate, and occupancy and include appropriate fixed, semi-fixed and variable costs (Smith Travel Research's 2011 Host Report for year 2010 data, and Source Strategies, Inc.).

Estimates of operating costs take into account the lower costs of the West South Central United States, which had an average Per Occupied Room Cost of $43.08 (including 5% royalties) in 2010 in Limited Service hotels - versus a national average of $49.67 - or 86.7% of the U.S. average. The following cost comparisons have all been adjusted to reflect this 13% lower-cost environment that may be expected in operating a hotel in the West South Central Region.

Rooms only Operating Costs per Occupied Room (before Fixed Charges) are estimated at $52.94 for Year I ($1,444,644 divided by 27,290 roomnights sold); $55.70 for Year II ($1,636,082 divided by 29,375), and $57.88 for Year III ($1,725,229 divided by 29,809). These numbers compare to industry-wide data as follows: a) $35.77 in the Host Report for Suburban hotels in 2010 (average rate of $75.13), adjusted to Southwest. This POR cost translates to $39.09 when inflated to Year 2013 dollars. b) $36.53 in the Host Report for Mid-Priced hotels in 2010 (average rate of $76.13), adjusted to Southwest. This POR cost translates to $39.92 when inflated to Year 2013 dollars c) $35.33 in the Host Report for Interstate hotels in 2010 (average rate of $73.72), adjusted to Southwest. This POR cost translates to $38.60 when inflated to Year 2013 dollars. d) $35.86 in the Host Report for hotels from 75-125 units in 2010 (average rate of $76.20) adjusted to Southwest. This translates to $39.19, when inflated to Year 2013 dollars. e) $52.54 in the Host Report for Upscale hotels, 2008 edition (average rate of $126.29), adjusted to Southwest. This POR cost translates to $60.90 when inflated to Year 2013 dollars. f) $48.32 in the Host Report for Larger hotels (125+ rooms), 2008 edition (average rate of $117.17), adjusted to Southwest. This POR cost translates to $56.01 when inflated to Year 2013 dollars.

15 The calculation of the statistic of Operating Costs Per Occupied Room (before fixed/capital costs are deducted) is typically the important cost to examine carefully because it is highly stable and predictable, regardless of occupancy and rate. Looking at costs on a percentage basis can be highly misleading because of the high variability in average room revenues. Page 41 of 97

Food & Beverage Revenues are estimated at 15% of total room revenues, but after associated expenses (estimated at 88% of F&B revenues) we project this aspect of the hotel will generate a relatively modest operating profit. Food and beverage offerings are typically offered as a hotel amenity rather than a cash flow generator.

- Versus room revenues: a necessary marketing expense of 7% in Year I and thereafter. Marketing includes reservation and advertising fees, sales expense, local advertising and the always important outdoor billboards. A 5.5% franchise royalty fee has been assessed, and a management fee has been deducted. A reserve for renovations is taken and subtracted from projected cash flows annually; such renovation reserves amount to $2,554,644 in the first ten years ($23,655 per unit). Reserves ensure that future revenue streams continue by maintaining product quality at excellent levels as required by the franchisor. Reserves are based on an extensive 2001 study, CapEx, by the International Society of Hospitality Consultants. The study shows that required reserves average 5.5% over a 20 year period.

Total capital of $15,000,000 is allocated for the development of the project. The estimated turn- key cost of $128,704 per unit is above average for a hotel of this size and quality, in our experience. Land is valued at $1,100,000. Should capital needs vary, then returns would change proportionately. The estimates of necessary capital include:

Investment

Est. Land Investment $ 1,100,000 for 2.2 acres Improvements $13,900,000 @ $128,704 per unit Total Investment $15,000,000

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COURTYARD BY MARRIOTT Land Value: $1,100,000 Open 7/1/2013 # Rooms: 108 PerRoomCost: $128,704 QUARTER: Third Fourth First Second Year Rmnites Sol 6,851 6,532 6,751 7,156 27,290 Rmnites Ava 9,936 9,936 9,720 9,828 39,420 Occupancy % 69.0% 65.7% 69.5% 72.8% 69.2% Avg Rate $110.00 $104.99 $125.00 $139.99 $120.38 REVPAR $75.85 $69.02 $86.82 $101.93 $83.34 % Revenues Room Revenu $753,639 $685,819 $843,883 $1,001,801 3,285,142 83.0% F&B Revenue 113,046 102,873 126,582 150,270 492,771 12.4% Other 41,450 37,720 46,414 55,099 180,683 4.6% Total Sales $908,135 $826,412 $1,016,879 $1,207,170 $3,958,596 100.0%

Operating Expense - Rooms Payroll Administrat 27,244 24,792 30,506 36,215 118,758 3.0% Housekeepin 27,404 26,128 27,004 28,624 109,160 2.8% Laundry 11,989 11,431 11,814 12,523 47,758 1.2% Front Desk 41,106 39,192 40,506 42,936 163,740 4.1% Miscellaneo 13,622 12,396 15,253 18,108 59,379 1.5% Taxes/Benef 14,564 13,673 15,010 16,609 59,855 1.5% Total Payro 135,929 127,612 140,094 155,014 558,650 14.1%

-Room Expense S:Linen & L 11,304 10,778 11,139 11,807 45,029 1.1% Comp. F & B 20,553 19,596 20,253 21,468 81,870 2.1% Total Room 31,857 30,374 31,392 33,275 126,899 3.2%

-Other Expense Phone Lines 8,528 8,528 8,528 8,528 34,113 0.9% Elec/Utilit 34,255 32,660 33,755 35,780 136,450 3.4% Maint. & Re 27,244 24,792 30,506 36,215 118,758 3.0% Total Other 70,027 65,980 72,789 80,523 289,320 7.3%

-Admin & Gen Marketing & 52,755 48,007 59,072 70,126 229,960 5.8% Franchise F 41,450 37,720 46,414 55,099 180,683 4.6% Credit Card 13,566 12,345 15,190 18,032 59,133 1.5% Total G & A 107,770 98,072 120,675 143,258 469,775 11.9%

Rooms Expen 345,584 322,039 364,951 412,071 1,444,644 36.5% F&B Expense 99,480 90,528 111,393 132,238 433,639 11.0% -Tot Op Exp 445,064 412,567 476,343 544,308 1,878,283 47.4%

GrossOpProf 463,071 413,845 540,536 662,862 2,080,314 52.6% Management 24,334 21,993 27,688 33,293 107,309 2.7%

Income Bef 438,737 391,852 512,847 629,569 1,973,004 49.8% Fixed Costs

-Fixed Charges Insurance 34,638 34,638 34,638 34,638 138,551 3.5% Property Ta 33,000 33,000 33,000 33,000 132,000 3.3% Deprec SL 3 89,103 89,103 89,103 89,103 356,410 9.0% Tot Capital 156,740 156,740 156,740 156,740 626,961 15.8%

Net Income 281,996 235,112 356,107 472,828 1,346,043 34.0% Tax & Financing Depreciat. 89,103 89,103 89,103 89,103 356,410 9.0% Renovation (45,407) (41,321) (50,844) (60,359) (197,930) -5.0%

Cash Flow Bef 325,692 282,894 394,366 501,572 1,504,524 38.0% Tax & Financing

-see following 2 pages for the next 9 years- Page 43 of 97

COURTYARD BY MARRIOTT Compoun # Rooms: 108 Growth Year 2 3 4 5 6 7 8 9 10 Yr 2-10 Rmnites Sold 29,375 29,809 29,527 29,384 29,035 28,690 28,489 28,362 28,372 0.4% Rmnites Avail 39,420 39,420 39,420 39,420 39,420 39,420 39,420 39,420 39,420 0.0% Occupancy % 74.5% 75.6% 74.9% 74.5% 73.7% 72.8% 72.3% 71.9% 72.0% 0.4% Avg Rate* $132.52 $139.72 $144.59 $148.92 $151.90 $154.94 $157.26 $159.21 $160.80 3.3% REVPAR $98.75 $105.66 $108.30 $111.01 $111.88 $112.76 $113.65 $114.55 $115.73 3.7%

RoomRevenues 3,892,741 4,165,062 4,269,188 4,375,918 4,410,411 4,445,176 4,480,215 4,515,531 4,562,225 3.7% F&B Revenues 583,911 624,759 640,378 656,388 661,562 666,776 672,032 677,330 684,334 3.7% Other 214,101 229,078 234,805 240,675 242,573 244,485 246,412 248,354 250,922 3.7% Total Revenues 4,690,753 5,018,900 5,144,372 5,272,981 5,314,545 5,356,437 5,398,659 5,441,215 5,497,481 3.7%

Operating Expense - Payroll Administration 122,321 125,990 129,770 133,663 137,673 141,803 146,057 150,439 154,952 3.0% Housekeeping 121,025 126,497 129,060 132,288 134,638 137,029 140,152 143,713 148,076 3.4% Laundry 52,948 55,343 56,464 57,876 58,904 59,950 61,316 62,874 64,783 3.4% Front Desk 181,538 189,746 193,590 198,432 201,957 205,544 210,227 215,569 222,114 3.4% Miscellaneous 65,833 68,810 70,204 71,960 73,238 74,539 76,237 78,174 80,548 3.4% Taxes/Benefits 65,240 67,966 69,490 71,306 72,769 74,264 76,079 78,092 80,457 3.3% Total Payroll 608,904 634,353 648,577 665,524 679,180 693,130 710,068 728,861 750,930 3.3%

-Room Expense Linen & Laundry 49,923 52,180 53,237 54,569 55,538 56,525 57,812 59,281 61,081 3.4% Comp. F & B 90,769 94,873 96,795 99,216 100,979 102,772 105,114 107,784 111,057 3.4% Total Room 140,692 147,053 150,032 153,785 156,517 159,297 162,926 167,066 172,138 3.4%

-Other Expense Phone Lines 37,820 39,530 40,331 41,340 42,074 42,822 43,797 44,910 46,274 3.4% Electric 151,281 158,122 161,325 165,360 168,298 171,287 175,189 179,641 185,095 3.4% Repairs & Maint 140,723 150,567 154,331 158,189 159,436 160,693 161,960 163,236 164,924 3.7% Total Other 329,824 348,219 355,987 364,889 369,808 374,802 380,947 387,787 396,293 3.6%

-Admin & Gen Marketing & Adv 272,492 291,554 298,843 306,314 308,729 311,162 313,615 316,087 319,356 3.7% Franchise Fee 214,101 229,078 234,805 240,675 242,573 244,485 246,412 248,354 250,922 3.7% Credit Card 70,069 74,971 76,845 78,767 79,387 80,013 80,644 81,280 82,120 3.7% Total G & A 556,662 595,604 610,494 625,756 630,689 635,660 640,671 645,721 652,398 3.7%

Rooms Expense 1,636,082 1,725,229 1,765,090 1,809,954 1,836,194 1,862,888 1,894,612 1,929,435 1,971,760 3.5% F&B Expense 513,842 549,788 563,533 577,621 582,174 586,763 591,388 596,050 602,214 3.7% -TotOpExpense 2,149,924 2,275,017 2,328,623 2,387,575 2,418,368 2,449,652 2,486,000 2,525,485 2,573,974 3.6%

GrossOpProfit 2,540,829 2,743,882 2,815,749 2,885,406 2,896,177 2,906,785 2,912,659 2,915,730 2,923,507 3.9%

Mngmt Fee 128,671 138,179 141,699 145,226 146,132 147,039 147,857 148,625 149,715 3.8%

Page 44 of 97

COURTYARD BY MARRIOTT Compoun # Rooms: 108 Growth Year 2 3 4 5 6 7 8 9 10 Yr 2-10 Rmnites Sold 29,375 29,809 29,527 29,384 29,035 28,690 28,489 28,362 28,372 0.4% Rmnites Avail 39,420 39,420 39,420 39,420 39,420 39,420 39,420 39,420 39,420 0.0% Occupancy % 74.5% 75.6% 74.9% 74.5% 73.7% 72.8% 72.3% 71.9% 72.0% 0.4% Avg Rate* $132.52 $139.72 $144.59 $148.92 $151.90 $154.94 $157.26 $159.21 $160.80 3.3% REVPAR $98.75 $105.66 $108.30 $111.01 $111.88 $112.76 $113.65 $114.55 $115.73 3.7%

RoomRevenues 3,892,741 4,165,062 4,269,188 4,375,918 4,410,411 4,445,176 4,480,215 4,515,531 4,562,225 3.7% F&B Revenues 583,911 624,759 640,378 656,388 661,562 666,776 672,032 677,330 684,334 3.7% Other 214,101 229,078 234,805 240,675 242,573 244,485 246,412 248,354 250,922 3.7% Total Revenues 4,690,753 5,018,900 5,144,372 5,272,981 5,314,545 5,356,437 5,398,659 5,441,215 5,497,481 3.7%

IncomeBefore 2,412,158 2,605,703 2,674,050 2,740,179 2,750,046 2,759,746 2,764,802 2,767,105 2,773,793 3.2% Fixed Costs

-Fixed Charges Insurance 164,176 175,661 180,053 184,554 186,009 187,475 188,953 190,443 192,412 3.7% Property Tax 135,960 140,039 144,240 148,567 153,024 157,615 162,343 167,214 172,230 3.0% Depr. SL 39 Yrs 356,410 356,410 356,410 356,410 356,410 356,410 356,410 356,410 356,410 0.0% Total Fixed Ch. 656,547 672,111 680,703 689,532 695,444 701,500 707,707 714,066 721,052 1.6%

Income Before 1,755,611 1,933,593 1,993,347 2,050,648 2,054,602 2,058,246 2,057,095 2,053,038 2,052,740 4.8% Tax & Financing Depr. AddBack 356,410 356,410 356,410 356,410 356,410 356,410 356,410 356,410 356,410 0.0% RenovReserve (234,538) (250,945) (257,219) (263,649) (265,727) (267,822) (269,933) (272,061) (274,874) 3.7%

Cash Before 1,877,484 2,039,058 2,092,538 2,143,409 2,145,285 2,146,834 2,143,572 2,137,388 2,134,277 4.0% Tax & Financing

Page 45 of 97

October 24, 2011

OPINION

This report is based on independent opinion, surveys and research from sources

considered reliable. No representation is made as to accuracy or completeness and no

contingent liability of any kind can be accepted.

The study projections are dependent on the developer building and operating a

‘Courtyard by Marriott’ hotel, including certain amenities, and spending the appropriate

operating funds necessary to generate projected revenues, most especially budgeted

funds for aforementioned amenities and for marketing, including a listing in the

American Automobile Association Texas Tourbook.

It is our opinion that this report fairly and conservatively represents the room revenues,

profitability and return on investment performance that can be achieved by developing

and operating a 108 unit Courtyard by Marriott at the aforementioned site in Victoria,

Texas.

Please contact us with any questions at (210) 734-3434.

Respectfully submitted,

Todd Walker, Bruce H. Walker, Senior Vice President President

PO Box 120055  134 Laurel Heights, San Antonio, TX 78212  210-734-3434  Fax 210-735-7970  www.SourceStrategies.Org

Page 46 of 97

EXHIBITS:

I Local Market History, Aggregated Basis:

II Local Market: By Segment and Brand, Past Five Years, Annual Basis

III Individual Hotel/Motel Histories For the Local Market

IV Texas Metros Excluding High Priced Segments

V The Case For Downsizing Hotels

VI Start-up Performance of New Hotels

VII CAPEX Study of Capital Expenditures

VIII Preparer Qualifications and Client List

IX Source Strategies Database Methodology

X Hotel Brand Report Newsletter

Page 47 of 97

EXHIBIT I

LODGING MARKET: VICTORIA & SURROUNDING COUNTIES MARKET AREA

# RNIGHTS $ ROOMS Hotels # SOLD 1 REVENUES % $ $ YRQ Motels ROOMS (000S) (000 S) OCC2 Rate3 RPAR4 ------011 26 1,235 56.0 2,617 50.4 46.74 23.55 012 27 1,270 60.9 2,860 52.7 46.98 24.75 013 28 1,320 67.3 3,057 55.5 45.40 25.18 014 28 1,320 55.6 2,569 45.8 46.20 21.16 *TOTAL 2001 239.8 11,103 51.1 46.30 23.64

021 28 1,320 56.4 2,586 47.5 45.85 21.77 022 28 1,320 64.0 3,069 53.2 47.98 25.55 023 28 1,320 73.0 3,491 60.1 47.79 28.74 024 28 1,323 59.3 2,738 48.7 46.18 22.50 *TOTAL 2002 252.7 11,884 52.4 47.03 24.65

031 28 1,320 55.1 2,530 46.4 45.91 21.30 032 28 1,320 58.3 2,745 48.5 47.13 22.86 033 28 1,320 66.4 3,146 54.7 47.36 25.91 034 28 1,323 58.5 2,730 48.0 46.69 22.43 *TOTAL 2003 238.3 11,151 49.4 46.80 23.13

041 28 1,322 58.8 2,729 49.4 46.42 22.93 042 28 1,320 60.5 2,791 50.4 46.14 23.24 043 28 1,332 72.6 3,572 59.3 49.18 29.15 044 27 1,292 63.9 3,174 53.8 49.65 26.71 *TOTAL 2004 255.8 12,267 53.2 47.95 25.53

051 27 1,292 60.7 3,050 52.2 50.27 26.23 052 28 1,317 65.8 3,358 54.9 51.03 28.02 053 30 1,338 72.8 4,055 59.1 55.71 32.94 054 29 1,331 61.6 3,303 50.3 53.62 26.97 *TOTAL 2005 260.9 13,766 54.2 52.77 28.58

061 30 1,367 65.1 3,584 52.9 55.08 29.13 062 33 1,418 71.5 4,020 55.4 56.22 31.16 063 34 1,442 81.0 4,757 61.1 58.72 35.86 064 33 1,435 72.9 4,280 55.2 58.75 32.42 *TOTAL 2006 290.5 16,642 56.2 57.30 32.21

071 33 1,435 68.5 3,965 53.0 57.89 30.70 072 35 1,493 80.3 4,935 59.1 61.45 36.32 073 35 1,493 79.9 4,968 58.2 62.16 36.17 074 34 1,486 74.0 4,482 54.1 60.58 32.78 *TOTAL 2007 302.7 18,350 56.2 60.62 34.04

081 34 1,486 71.7 4,358 53.6 60.77 32.59 082 36 1,542 88.3 5,713 62.9 64.73 40.71 083 36 1,544 94.9 6,321 66.8 66.58 44.50 084 35 1,516 76.8 4,933 55.1 64.23 35.37 *TOTAL 2008 331.7 21,326 59.7 64.29 38.38

Page 48 of 97

LODGING MARKET: VICTORIA & SURROUNDING COUNTIES MARKET AREA

# RNIGHTS $ ROOMS Hotels # SOLD 1 REVENUES % $ $ YRQ Motels ROOMS (000S) (000 S) OCC2 Rate3 RPAR4 ------091 35 1,516 78.5 4,662 57.5 59.43 34.17 092 37 1,662 86.4 5,199 57.1 60.17 34.38 093 39 1,699 95.0 5,919 60.8 62.29 37.87 094 38 1,711 84.7 5,329 53.8 62.94 33.86 *TOTAL 2009 344.5 21,110 57.3 61.27 35.10

101 38 1,721 93.0 6,012 60.1 64.61 38.81 102 41 1,774 104.3 7,522 64.6 72.08 46.59 103 42 1,858 120.8 9,223 70.7 76.35 53.96 104 41 1,844 114.5 8,885 67.5 77.59 52.37 *TOTAL 2010 432.7 31,642 65.9 73.12 48.17

111 41 1,844 120.8 9,715 72.8 80.43 58.54 112 43 1,875 126.9 10,838 74.4 85.39 63.52 *TOTAL 2011 YTD 247.7 20,553 73.6 82.97 61.06

*TOTAL 3,197.3 189,794 57.1 59.36 33.88

1. Roomnights sold (derived from est. rate and actual room revenues) 2. Occupancy: nights sold divided by nights available for sale(x 100) 3. Average price for each roomnight sold;from Directories and surveys 4. $ Revenue per available room per day (room sales per day)

Page 49 of 97

EXHIBIT II

LODGING MARKET: VICTORIA & SURROUNDING COUNTIES REGION PERIOD: TWELVE MONTHS ENDING JUN 30, 2011

# * EST. $ EST. #* RMS % RNS % AMT. % EST. $ $ BRAND HTL 000S RMS 000S RNS 000S AMT %OCC RATE RPAR ------CHAINS BEST WEST 4 .2 10.5 60 12.3 6,119 15.8 83.7 102.77 85.98 HAMPTON 1 .1 3.5 19 3.8 2,182 5.6 78.0 117.92 91.97 HOLID EXP 2 .2 8.3 42 8.7 5,026 13.0 74.4 120.13 89.41 LA QUINTA 1 .1 7.0 36 7.4 2,756 7.1 75.6 76.80 58.09 TOT LTD SVE 8 .5 29.3 156 32.2 16,084 41.5 78.5 103.25 81.00

BST VALUE 3 .2 10.4 39 8.1 1,748 4.5 55.5 44.49 24.68 MOTEL 6 1 .1 3.1 17 3.5 1,186 3.1 80.4 69.68 56.03 QUALITY 1 .1 6.1 28 5.8 1,916 4.9 67.1 68.65 46.05 TOT BUDGET 5 .4 19.7 84 17.4 4,850 12.5 63.0 57.59 36.31

TOT CHAINS 13 .9 49.0 240 49.7 20,934 54.1 72.3 87.23 63.03

INDEPENDENTS $100+ ADR 5 .2 8.1 42 8.8 4,887 12.6 77.1 115.07 88.67 $60-99ADR 14 .4 21.2 104 21.4 8,353 21.6 72.0 80.63 58.04 LT $60ADR 11 .4 21.6 97 20.1 4,542 11.7 66.4 46.69 31.00 TOT INDEP 29 .9 51.0 243 50.3 17,783 45.9 70.4 73.07 51.46

TOT MARKET 42 1.9 100.0 483 100.0 38,716 100 71.3 80.10 57.13

* All figures annualized. Includes taxed and est non-tax room revenues. Independents are categorized by price: $100+, $60-99.99, and under $60)

Page 50 of 97

LODGING MARKET: VICTORIA & SURROUNDING COUNTIES REGION PERIOD: TWELVE MONTHS ENDING JUN 30, 2010

# * EST. $ EST. #* RMS % RNS % AMT. % EST. $ $ BRAND HTL 000S RMS 000S RNS 000S AMT %OCC RATE RPAR ------CHAINS BEST WEST 5 .3 15.5 59 15.8 4,586 18.5 60.9 77.13 46.98 HAMPTON 1 .1 3.8 18 4.8 1,815 7.3 76.0 100.61 76.49 HOLID EXP 2 .2 8.9 39 10.2 3,764 15.2 68.7 97.49 66.96 LA QUINTA 1 .1 7.5 32 8.5 2,112 8.5 67.4 65.99 44.50 TOT LTD SVE 9 .6 35.7 148 39.3 12,275 49.5 65.8 82.89 54.56

BST VALUE 2 .1 6.4 19 5.0 883 3.6 47.3 46.58 22.04 MOTEL 6 0 .0 .1 0 .1 26 .1 73.3 66.06 48.39 QUALITY 1 .1 6.6 19 5.0 1,097 4.4 45.7 57.72 26.35 TOT BUDGET 3 .2 13.0 38 10.2 2,006 8.1 46.6 52.30 24.40

TOT CHAINS 12 .8 48.7 186 49.4 14,281 57.6 60.7 76.60 46.49

INDEPENDENTS $100+ ADR 2 .0 1.8 3 .7 321 1.3 23.0 126.65 29.10 $60-99ADR 6 .2 10.4 38 10.2 3,162 12.7 58.6 82.36 48.24 LT $60ADR 19 .7 39.1 150 39.7 7,048 28.4 60.8 47.03 28.59 TOT INDEP 27 .9 51.3 191 50.6 10,532 42.4 59.0 55.20 32.59

TOT MARKET 39 1.7 100.0 377 100.0 24,813 100 59.8 65.78 39.37

* All figures annualized. Includes taxed and est non-tax room revenues. Independents are categorized by price: $100+, $60-99.99, and under $60)

Page 51 of 97

LODGING MARKET: VICTORIA & SURROUNDING COUNTIES REGION PERIOD: TWELVE MONTHS ENDING JUN 30, 2009

# * EST. $ EST. #* RMS % RNS % AMT. % EST. $ $ BRAND HTL 000S RMS 000S RNS 000S AMT %OCC RATE RPAR ------CHAINS BEST WEST 3 .2 12.0 41 12.2 2,946 14.0 60.2 71.60 43.12 HAMPTON 1 .1 4.2 18 5.2 1,794 8.5 74.1 101.99 75.61 HOLID EXP 1 .1 5.4 20 6.1 2,062 9.8 66.9 101.18 67.70 LA QUINTA 1 .1 8.3 32 9.4 2,116 10.0 66.4 67.16 44.60 TOT LTD SVE 6 .5 29.9 111 32.9 8,919 42.2 65.1 80.61 52.47

BST VALUE 2 .1 7.1 19 5.6 934 4.4 46.6 49.96 23.26 QUALITY 1 .1 7.3 25 7.5 1,691 8.0 60.5 67.14 40.64 TOT BUDGET 3 .2 14.4 44 13.0 2,625 12.4 53.7 59.82 32.11

TOT CHAINS 9 .7 44.2 155 45.9 11,544 54.7 61.4 74.71 45.86

INDEPENDENTS $100+ ADR 2 .1 4.3 9 2.6 913 4.3 35.2 105.65 37.16 $60-99ADR 9 .3 16.6 63 18.7 4,234 20.0 66.4 67.28 44.69 LT $60ADR 15 .5 34.8 110 32.8 4,426 21.0 55.7 40.08 22.33 TOT INDEP 26 .9 55.8 182 54.1 9,572 45.3 57.3 52.59 30.15

TOT MARKET 36 1.6 100.0 337 100.0 21,116 100 59.1 62.75 37.10

* All figures annualized. Includes taxed and est non-tax rooms revenues. Independents are categorized by price: $100+, $60-99.99, and under $60)

Page 52 of 97

LODGING MARKET: VICTORIA & SURROUNDING COUNTIES REGION PERIOD: TWELVE MONTHS ENDING JUN 30, 2008

# * EST. $ EST. #* RMS % RNS % AMT. % EST. $ $ BRAND HTL 000S RMS 000S RNS 000S AMT %OCC RATE RPAR ------CHAINS HOLID INN 1 .1 7.6 26 8.3 1,829 9.4 62.7 70.12 43.95 TOT MID/UPS 1 .1 7.6 26 8.3 1,829 9.4 62.7 70.12 43.95

BEST WEST 2 .1 9.1 28 9.0 1,874 9.6 56.8 66.00 37.48 HAMPTON 1 .1 4.3 17 5.5 1,583 8.1 72.6 91.90 66.71 HOLID EXP 1 .1 4.4 17 5.5 1,632 8.4 71.3 95.02 67.75 LA QUINTA 1 .1 8.6 30 9.5 1,969 10.1 63.4 65.80 41.75 TOT LTD SVE 5 .4 26.5 93 29.5 7,058 36.2 63.9 76.13 48.68

BST VALUE 1 .1 3.5 8 2.7 369 1.9 44.0 44.22 19.44 SUPER 8 1 .1 3.9 12 3.9 773 4.0 58.2 62.72 36.52 TOT BUDGET 2 .1 7.3 21 6.6 1,142 5.9 51.5 55.25 28.44

TOT CHAINS 8 .6 41.4 139 44.4 10,029 51.4 61.5 71.91 44.23

INDEPENDENTS $100+ ADR 3 .1 4.6 9 3.0 1,049 5.4 37.4 112.26 41.97 $60-99ADR 8 .2 15.5 51 16.2 3,510 18.0 59.9 68.89 41.28 LT $60ADR 16 .6 38.6 114 36.3 4,933 25.3 54.0 43.25 23.34 TOT INDEP 27 .9 58.6 174 55.6 9,493 48.6 54.3 54.44 29.54

TOT MARKET 35 1.5 100.0 314 100.0 19,521 100 57.3 62.20 35.61

* All figures annualized. Included taxed and est non-tax rooms revenues. Independents are categorized by price: $100+, $60-99.99, and under $60)

Page 53 of 97

LODGING MARKET: VICTORIA & SURROUNDING COUNTIES REGION PERIOD: TWELVE MONTHS ENDING JUN 30, 2007

# * EST. $ EST. #* RMS % RNS % AMT. % EST. $ $ BRAND HTL 000S RMS 000S RNS 000S AMT %OCC RATE RPAR ------CHAINS HOLID INN 1 .1 7.9 25 8.1 1,664 9.3 59.0 67.84 40.00 TOT MID/UPS 1 .1 7.9 25 8.1 1,664 9.3 59.0 67.84 40.00

BEST WEST 2 .1 8.6 27 9.0 1,659 9.2 59.5 61.16 36.36 HAMPTON 1 .1 4.5 18 5.8 1,355 7.6 74.5 76.66 57.11 HOLID EXP 1 .1 4.5 18 5.8 1,478 8.2 73.2 83.87 61.35 LA QUINTA 1 .1 8.9 33 10.7 2,093 11.7 69.1 64.38 44.46 TOT LTD SVE 5 .4 26.5 95 31.4 6,585 36.7 67.6 69.36 46.86

SUPER 8 1 .1 4.0 16 5.2 997 5.6 74.5 63.19 47.10 TOT BUDGET 1 .1 4.0 16 5.2 997 5.6 74.5 63.19 47.10

TOT CHAINS 7 .6 38.4 135 44.7 9,247 51.5 66.5 68.37 45.48

INDEPENDENTS $100+ ADR 2 .0 2.0 3 1.1 438 2.4 31.2 134.77 42.05 $60-99ADR 7 .2 12.0 38 12.4 2,694 15.0 59.3 71.67 42.48 LT $60ADR 18 .7 47.7 127 41.8 5,559 31.0 50.1 43.94 22.01 TOT INDEP 27 .9 61.6 167 55.3 8,691 48.5 51.3 51.93 26.63

TOT MARKET 34 1.5 100.0 303 100.0 17,938 100 57.1 59.28 33.86

* All figures annualized. Included taxed and est non-tax rooms revenues. Independents are categorized by price: $100+, $60-99.99, and under $60)

Page 54 of 97

EXHIBIT III

LODGING MARKET: VICTORIA & SURROUNDING COUNTIES MARKET AREA

E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ 1 ------T AVG. % ------# TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR ------CARRIZO SPRI 1049 US HWY 83 78834 BALIA INN 75 1.100 061 53 75,003 77,122 1.028 42.67 38 16.17 062 53 105,691 108,061 1.022 47.57 47 22.41 063 53 76,529 77,465 1.012 44.50 36 15.89 064 53 74,789 75,120 1.004 44.50 35 15.41 071 53 63,405 64,256 1.013 42.00 32 13.47 072 53 45,458 47,365 1.042 42.00 23 9.82 073 53 69,504 73,396 1.056 41.58 36 15.05 074 53 71,964 73,711 1.024 42.50 36 15.12 081 53 46,031 46,547 1.011 40.61 24 9.76 082 53 151,461 153,733 1.015 45.68 70 31.87 083 53 106,415 109,937 1.033 42.25 53 22.55 084 53 90,974 94,292 1.036 42.67 45 19.34 091 53 63,782 64,807 1.016 36.62 37 13.59 092 53 66,473 73,853 1.111 41.24 37 15.31 093 53 92,149 101,364 .000 43.40 48 20.79 094 53 90,667 99,734 .000 42.96 48 20.45 101 53 150,033 150,839 1.005 46.04 69 31.62 102 53 199,076 218,984 .000 56.66 80 45.40

103 53 250,549 275,604 .000 64.20 88 56.52 104 53 229,681 252,649 .000 69.50 75 51.81 111 53 258,789 284,668 .000 66.50 90 59.68 112 53 269,264 296,190 .000 68.89 89 61.41

1402 PENA ST 78834 CARRIZO EXECUTIVE INN FMR 65 1.400 061 30 33,966 34,216 1.007 32.88 39 12.67 062 30 37,565 52,591 .000 32.88 59 19.26 063 30 36,921 44,321 1.200 32.88 49 16.06 064 30 36,245 50,743 .000 33.58 55 18.39 071 30 30,375 42,525 .000 33.25 47 15.75 072 30 29,092 30,527 1.049 33.25 34 11.18 073 30 44,822 50,470 1.126 33.31 55 18.29 074 30 40,861 46,021 1.126 33.31 50 16.67 081 30 30,426 33,262 1.093 33.40 37 12.32 082 30 65,356 86,743 1.327 37.99 84 31.77 083 30 61,488 67,130 1.092 37.61 65 24.32 084 30 49,177 58,207 1.184 37.37 56 21.09 091 30 49,831 52,949 1.063 32.75 60 19.61 092 30 37,242 49,764 1.336 32.01 57 18.23 093 30 47,990 51,320 1.069 31.19 60 18.59 094 30 56,736 79,430 .000 34.83 83 28.78 101 30 74,012 90,895 1.228 45.32 74 33.66 102 30 73,644 112,853 1.532 51.02 81 41.34 103 30 73,208 151,073 2.064 65.17 84 54.74 104 30 122,131 153,320 1.255 68.57 81 55.55 111 30 107,892 135,614 1.257 68.57 73 50.23 112 30 138,634 210,862 1.521 88.65 87 77.24

Page 55 of 97

E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ 1 ------T AVG. % ------# TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR ------CARRIZO SPRI 662 FM 3252 78834 LA BANDERA RANCH 08 1.020 084 10 30,670 31,283 .000 95.95 35 34.00 091 10 51,450 52,479 .000 114.57 51 58.31 093 10 25,500 26,010 .000 95.05 30 28.27 094 10 30,300 30,906 .000 94.08 36 33.59 103 10 33,209 33,873 .000 96.03 38 36.82 104 20 123,284 125,750 .000 95.03 72 68.34 111 20 41,741 42,576 .000 95.03 25 23.65 112 20 40,000 40,800 .000 1 98.45 23 22.42

2300 N 1ST ST 78834 TEXAN INN 06 9.900 061 36 47,930 49,711 1.037 65.00 24 15.34 062 36 135,369 156,467 1.156 70.00 68 47.76 063 36 155,985 183,908 1.179 85.00 65 55.53 064 36 148,621 190,533 1.282 80.00 72 57.53 071 36 133,062 219,192 1.647 80.00 85 67.65 072 36 142,630 182,890 1.282 70.00 80 55.83 073 36 137,850 179,205 1.300 84.15 64 54.11 074 36 135,790 184,029 1.355 84.15 66 55.56 081 36 134,458 165,502 1.231 82.77 62 51.08 082 36 163,794 211,102 1.289 86.82 74 64.44 083 36 167,768 211,011 1.258 85.95 74 63.71 084 36 166,848 202,389 1.213 86.81 70 61.11 091 36 186,758 192,240 1.029 81.28 73 59.33 092 36 175,620 181,238 1.032 81.96 67 55.32 093 36 191,214 197,554 1.033 85.71 70 59.65 094 36 184,447 191,638 1.039 84.84 68 57.86 101 36 206,312 215,261 1.043 87.85 76 66.44 102 36 191,031 249,605 1.307 97.87 78 76.19 103 36 219,398 269,905 1.230 106.93 76 81.49 104 36 175,041 275,403 1.573 106.93 78 83.15 111 36 98,742 293,105 2.968 106.93 85 90.46 112 48 32,582 322,562 .000 110.78 67 73.85

CASTROVILLE 1650 US HIGHWAY 78009 HOTEL ALSACE FMR ALSATIAN 85 1.060 061 40 53,922 55,422 1.028 42.50 36 15.40 062 40 72,202 76,534 .000 49.10 43 21.03 063 40 93,295 96,271 1.032 48.60 54 26.16 064 40 91,387 96,870 .000 50.50 52 26.32 071 40 88,033 97,712 1.110 55.50 49 27.14 072 40 106,868 125,584 1.175 64.38 54 34.50 073 40 125,855 138,566 1.101 63.53 59 37.65 074 40 98,693 114,011 1.155 58.82 53 30.98 081 40 96,749 99,597 1.029 57.21 48 27.67 082 40 145,440 158,958 1.093 76.46 57 43.67 083 40 181,393 202,106 1.114 80.03 69 54.92 084 40 142,463 159,279 1.118 65.02 67 43.28 091 40 127,465 138,479 1.086 57.93 66 38.47 092 40 137,557 145,381 1.057 64.13 62 39.94 093 40 130,396 133,315 1.022 63.58 57 36.23 094 40 109,670 111,438 1.016 65.80 46 30.28 101 40 91,907 98,482 1.072 62.28 44 27.36 102 40 140,763 156,556 1.112 67.89 63 43.01

Page 56 of 97

E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ 1 ------T AVG. % ------# TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR ------CASTROVILLE 1650 US HIGHWAY 78009 HOTEL ALSACE FMR ALSATIAN 85 1.060 103 40 149,987 158,983 1.060 67.28 64 43.20 104 40 113,262 117,254 1.035 69.30 46 31.86 111 40 106,288 118,747 1.117 67.22 49 32.99 112 40 144,710 156,820 1.084 70.95 61 43.08

COTULLA 145 W FM 468 78014 BEST WESTERN COWBOY INN 09 1.500 094 50 BWEST 244,296 338,142 1.384 84.13 87 73.51 101 50 BWEST 239,014 381,511 1.596 102.96 82 84.78 102 50 BWEST 284,779 406,311 1.427 116.37 77 89.30 103 50 BWEST 254,941 442,939 1.737 109.45 88 96.29 104 50 BWEST 272,539 445,155 1.633 109.45 88 96.77 111 50 BWEST 312,684 461,440 1.476 112.45 91 102.54 112 50 BWEST 256,244 460,353 1.797 120.75 84 101.18

900 I H 35 78014 COTULLA EXECUTIVE INN 95 1.050 061 30 102,876 103,516 1.006 59.08 65 38.34 062 30 102,675 103,200 1.005 59.08 64 37.80 063 30 89,358 112,438 1.258 61.58 66 40.74 064 30 102,442 107,564 .000 61.58 63 38.97 071 30 101,666 106,749 .000 61.58 64 39.54 072 30 67,007 70,357 .000 55.58 46 25.77 073 30 121,495 127,570 .000 62.94 73 46.22 074 30 125,449 131,721 .000 65.94 72 47.73 081 30 138,771 145,710 .000 66.12 82 53.97 082 30 124,606 130,836 .000 63.38 76 47.93 083 30 133,002 139,652 .000 65.91 77 50.60 084 30 150,353 157,871 .000 68.19 84 57.20 091 30 118,178 124,087 .000 64.60 71 45.96 092 30 120,780 126,819 .000 62.66 74 46.45 093 30 181,914 191,010 .000 83.46 83 69.21 094 30 183,087 192,241 .000 83.70 83 69.65 101 30 198,679 208,613 .000 94.63 82 77.26 102 30 220,590 231,620 .000 108.82 78 84.84 103 30 249,145 261,602 .000 102.54 92 94.78 104 30 259,044 271,996 .000 108.54 91 98.55 111 30 284,062 298,265 .000 119.54 92 110.47 112 30 221,663 232,746 .000 119.70 71 85.26

301 N MAIN ST 78014 COTULLA MOTEL 85 1.650 061 28 48,153 50,766 1.054 43.02 47 20.15 062 28 35,987 46,458 1.291 38.52 47 18.23 063 28 51,776 85,317 1.648 46.52 71 33.12 064 28 59,989 70,156 1.169 41.00 66 27.23 071 28 44,513 51,516 1.157 41.00 50 20.44 072 28 43,199 62,431 1.445 44.00 56 24.50 073 28 42,153 48,843 1.159 43.56 44 18.96 074 28 65,923 71,953 1.091 45.56 61 27.93 081 28 52,976 64,264 1.213 45.69 56 25.50 082 28 44,409 73,275 .000 42.04 68 28.76 083 28 33,464 55,216 .000 38.85 55 21.43 084 28 32,372 50,322 1.554 39.24 50 19.53

Page 57 of 97

E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ 1 ------T AVG. % ------# TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR ------COTULLA 301 N MAIN ST 78014 COTULLA MOTEL 85 1.650 091 28 42,175 69,589 .000 37.17 74 27.61 092 28 42,404 69,967 .000 37.41 73 27.46 093 28 61,292 101,132 .000 38.54 ** 39.26 094 28 70,162 84,854 1.237 38.15 86 32.94 101 28 68,761 81,868 1.191 42.08 77 32.49 102 28 62,483 100,977 1.616 43.35 91 39.63 103 28 80,021 110,191 1.377 43.78 98 42.78 104 28 84,306 104,403 1.238 48.58 83 40.53 111 28 78,404 116,087 1.481 52.58 88 46.07 112 28 60,530 114,647 1.894 54.47 83 44.99

1110 FM 468 78014 VILLAGE INN FMR RODEWAY 82 1.200 061 28 34,375 38,500 1.120 37.61 41 15.28 062 28 29,945 33,538 1.120 36.00 37 13.16 063 28 38,575 43,204 1.120 38.00 44 16.77 064 28 42,358 47,441 1.120 38.50 48 18.42 071 28 37,932 45,518 .000 38.50 47 18.06 072 28 49,828 59,794 .000 38.50 61 23.47 073 28 43,427 52,112 .000 38.12 53 20.23 074 28 47,851 57,421 .000 38.12 58 22.29 081 28 53,155 63,786 .000 38.22 66 25.31 082 28 53,959 64,751 .000 38.22 66 25.41 083 28 76,016 91,219 .000 43.21 82 35.41 084 28 58,358 70,030 .000 40.61 67 27.19 091 28 48,904 58,685 .000 36.57 64 23.29 092 28 47,822 57,386 .000 32.47 69 22.52 093 28 46,141 55,369 .000 31.64 68 21.49 094 28 68,655 82,386 .000 34.85 92 31.98 101 28 85,840 103,008 .000 42.08 97 40.88 102 28 118,005 141,606 .000 56.74 98 55.58 103 28 113,308 135,970 .000 63.17 84 52.78 104 28 123,530 148,236 .000 65.17 88 57.55 111 28 114,405 137,286 .000 60.17 91 54.48 112 28 123,451 148,141 .000 69.34 84 58.14

CRYSTAL CITY 1800 N HIGHWAY 78839 EXECUTIVE INN 10 1.060 101 20 26,113 28,213 1.080 44.50 35 15.67 102 30 32,123 34,223 1.065 42.75 29 12.54 103 30 68,135 70,235 1.031 43.18 59 25.45 104 30 81,467 83,832 1.029 43.18 70 30.37 111 30 205,727 218,781 1.063 89.58 90 81.03 112 30 167,856 241,150 1.437 99.02 89 88.33

1531 N HIGHWAY 78839 RIATA INN - CRYSTAL INC 01 1.300 061 20 70,121 73,093 1.042 66.82 61 40.61 062 20 65,478 65,940 1.007 66.82 54 36.23 063 20 74,814 75,412 1.008 66.82 61 40.98 064 20 63,266 65,102 1.029 66.82 53 35.38 071 20 64,262 64,656 1.006 66.82 54 35.92 072 20 48,600 50,089 1.031 60.82 45 27.52 073 20 47,273 52,210 1.104 63.18 45 28.38 074 20 59,092 59,718 1.011 63.18 51 32.46

Page 58 of 97

E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ 1 ------T AVG. % ------# TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR ------CRYSTAL CITY 1531 N HIGHWAY 78839 RIATA INN - CRYSTAL INC 01 1.300 081 20 58,550 58,906 1.006 63.35 52 32.73 082 20 82,515 85,600 1.037 67.41 70 47.03 083 20 54,566 57,822 1.060 62.91 50 31.43 084 20 54,546 70,910 .000 60.00 64 38.54 091 20 44,935 46,048 1.025 59.59 43 25.58 092 20 62,032 80,642 .000 61.68 72 44.31 093 20 44,880 58,344 .000 54.25 58 31.71 094 20 56,416 73,341 .000 53.70 74 39.86 101 20 83,384 108,399 .000 60.02 ** 60.22 102 20 92,172 119,824 .000 72.13 91 65.84 103 20 123,049 159,964 .000 78.31 ** 86.94 104 20 147,900 192,270 .000 92.51 ** 104.49 111 20 86,063 177,840 2.066 105.51 94 98.80 112 20 119,033 157,219 1.321 98.95 87 86.38

2516 N HIGHWAY 78839 WINTER GARDEN INN 07 1.800 072 36 63,558 84,781 1.334 55.00 47 25.88 073 36 101,040 124,481 1.232 57.92 65 37.58 074 36 119,185 129,540 1.087 63.52 62 39.11 081 36 71,303 74,316 1.042 55.66 41 22.94 082 36 30,792 188,352 6.117 65.85 87 57.49 083 36 99,015 137,109 1.385 65.19 63 41.40 084 36 93,654 98,885 1.056 63.22 47 29.86 091 36 106,843 134,602 1.260 59.88 69 41.54 092 36 126,062 152,025 1.206 63.90 73 46.41 093 36 82,828 101,156 1.221 54.46 56 30.54 094 36 117,143 121,742 1.039 64.79 57 36.76 101 36 128,581 158,141 1.230 69.01 71 48.81 102 36 153,563 191,414 1.246 76.24 77 58.43 103 36 193,578 227,584 1.176 86.09 80 68.71 104 36 158,964 210,360 1.323 82.09 77 63.51 111 36 178,642 229,899 1.287 82.09 86 70.96 112 36 100,817 246,682 2.447 90.74 83 75.30

DEVINE CORNER OF HWY 1 78016 COUNTRY CORNER HOTEL 73 1.050 061 38 71,192 71,762 1.008 38.56 54 20.98 062 38 65,738 66,323 1.009 39.66 48 19.18 063 38 91,338 93,060 1.019 39.44 67 26.62 064 38 67,748 68,003 1.004 37.44 52 19.45 071 38 73,247 74,522 1.017 37.44 58 21.79 072 38 82,471 83,851 1.017 41.76 58 24.25 073 38 105,072 108,750 1.020 44.19 70 31.11 074 38 93,111 95,999 1.031 44.41 62 27.46 081 38 85,335 93,869 1.100 43.43 63 27.45 082 38 70,231 74,908 1.067 42.11 51 21.66 083 38 97,575 103,613 1.062 45.27 65 29.64 084 38 75,892 83,481 1.100 44.25 54 23.88 091 38 70,311 77,342 1.100 39.44 57 22.61 092 38 84,152 92,627 1.101 41.46 65 26.79 093 38 70,640 73,874 1.046 40.18 53 21.13 094 38 45,642 47,016 1.030 38.22 35 13.45 101 38 63,275 66,439 .000 38.07 51 19.43

Page 59 of 97

E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ 1 ------T AVG. % ------# TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR ------DEVINE CORNER OF HWY 1 78016 COUNTRY CORNER HOTEL 73 1.050 102 38 81,724 85,810 .000 42.38 59 24.81 103 38 113,715 119,401 .000 42.38 81 34.15 104 38 103,782 108,971 .000 43.65 71 31.17 111 38 147,450 154,823 .000 50.92 89 45.27 112 38 217,935 227,355 1.043 75.31 87 65.75

DILLEY 1062 W FM 117 78017 BUDGET INN FMR RELAX/PACHO 91 1.050 061 30 49,631 55,750 1.123 38.38 54 20.65 062 30 47,729 53,777 1.127 38.00 52 19.70 063 30 57,641 65,501 1.136 38.00 62 23.73 064 30 37,850 49,336 1.303 36.20 49 17.88 071 30 39,031 44,354 1.136 37.25 44 16.43 072 30 46,079 52,393 1.137 37.25 52 19.19 073 30 62,286 68,701 1.103 39.85 62 24.89 074 30 36,800 38,640 .000 36.85 38 14.00 081 30 39,137 47,341 1.210 37.36 47 17.53 082 30 48,112 54,582 1.134 37.76 53 19.99 083 30 116,823 122,664 .000 57.96 77 44.44 084 30 38,992 40,942 .000 39.90 37 14.83 091 30 41,082 41,332 1.006 35.05 44 15.31 092 30 41,860 47,473 1.134 35.94 48 17.39 093 30 80,183 84,192 .000 51.64 59 30.50 094 30 50,703 58,434 1.248 38.11 56 21.17 101 30 25,000 65,000 4.934 1 50.69 47 24.07 102 30 150,000 175,000 .000 1 75.51 85 64.10 103 52 153,714 279,580 1.819 116.67 50 58.44 104 52 258,356 343,449 1.329 110.67 65 71.79 111 52 430,118 451,624 .000 110.67 87 96.50 112 52 425,000 446,250 .000 1114.65 82 94.30

IH 35 AT HWY 85 78017 DILLEY EXECUTIVE INN 81 1.020 061 24 26,521 27,051 .000 39.91 31 12.52 062 24 21,420 21,848 .000 36.00 28 10.00 063 24 28,682 29,256 .000 36.00 37 13.25 064 24 24,151 24,634 .000 36.00 31 11.16 071 24 26,725 27,260 .000 36.00 35 12.62 072 24 23,848 24,325 .000 33.00 34 11.14 073 24 28,769 29,344 .000 31.68 42 13.29 074 24 19,547 19,938 .000 29.68 30 9.03 081 24 21,919 22,357 .000 31.64 33 10.35 082 24 19,413 19,801 .000 29.61 31 9.07 083 24 28,031 31,106 1.110 27.27 52 14.09 084 24 23,566 24,037 .000 25.52 43 10.89 091 24 22,878 23,336 .000 24.17 45 10.80 092 24 25,156 25,659 .000 23.44 50 11.75 093 24 43,088 43,950 .000 26.84 74 19.90 094 24 27,959 28,518 .000 24.29 53 12.92 101 24 51,332 52,359 .000 34.21 71 24.24 102 24 68,690 70,064 .000 52.04 62 32.08 103 24 111,653 113,886 .000 70.74 73 51.58 104 24 138,047 140,808 .000 75.74 84 63.77

Page 60 of 97

E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ 1 ------T AVG. % ------# TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR ------DILLEY IH 35 AT HWY 85 78017 DILLEY EXECUTIVE INN 81 1.020 111 24 143,173 146,036 .000 78.54 86 67.61 112 24 194,365 198,252 .000 102.09 89 90.77

16222 SOUTH IH 78017 SONA INN 06 1.200 063 24 41,758 47,453 1.136 52.00 41 21.49 064 24 22,792 25,900 1.136 52.00 23 11.73 071 24 22,000 25,900 1.177 1 52.00 23 11.99 072 24 32,230 50,509 1.567 48.50 48 23.13 073 24 42,410 48,305 1.139 48.01 46 21.88 074 24 51,715 62,058 .000 48.01 59 28.11 081 24 49,930 59,916 .000 48.14 58 27.74 082 24 41,088 49,306 .000 48.14 47 22.58 083 24 64,773 79,475 1.227 47.66 75 35.99 084 24 44,056 52,867 .000 48.14 50 23.94 091 24 39,668 44,828 1.130 45.60 46 20.75 092 24 52,744 69,337 1.315 48.50 65 31.75 093 24 85,313 104,715 1.227 58.95 80 47.43 094 24 58,652 69,527 1.185 49.49 64 31.49 101 24 97,572 107,812 1.105 62.88 79 49.91 102 24 129,851 143,490 1.105 84.48 78 65.70 103 24 163,631 205,275 1.254 105.63 88 92.97 104 24 188,380 274,093 1.455 135.63 91 124.14 111 24 201,027 241,232 .000 135.63 82 111.68 112 24 156,425 229,951 1.470 130.15 81 105.29

VICTORIA 2150 DEL RIO BL 78852 BEST VALUE INN FMR SUPR8 79 1.060 061 58 SUPR8 164,243 201,601 1.227 55.55 70 38.62 062 58 SUPR8 134,083 179,855 1.341 52.55 65 34.08 063 58 SUPR8 82,671 267,299 3.233 62.55 80 50.09 064 58 SUPR8 63,170 259,567 4.109 63.55 77 48.64 071 58 SUPR8 138,874 202,118 1.455 57.55 67 38.72 072 58 SUPR8 202,195 268,130 1.326 68.55 74 50.80 073 58 SUPR8 208,732 236,911 1.135 67.86 65 44.40 074 58 SUPR8 129,418 179,332 1.386 62.56 54 33.61 081 58 SUPR8 115,018 183,402 1.087 58.65 60 35.13 082 58 SUPR8 115,018 173,402 1.508 61.00 54 32.85 083 58 BVALU 178,020 188,701 .000 57.92 61 35.36 084 58 BVALU 146,022 159,816 1.094 57.49 52 29.95 091 58 BVALU 138,050 147,674 1.070 52.56 54 28.29 092 58 BVALU 162,889 178,494 1.096 52.92 64 33.82 093 58 BVALU 182,432 193,629 1.061 53.13 68 36.29 094 58 BVALU 145,560 152,633 1.049 52.59 54 28.60 101 58 BVALU 146,662 152,928 1.043 51.02 57 29.30 102 58 BVALU 158,305 167,416 1.058 54.11 59 31.72 103 58 BVALU 181,694 194,784 1.072 55.06 66 36.50 104 58 BVALU 176,963 190,167 1.075 55.06 65 35.64 111 58 BVALU 195,719 202,958 1.037 58.56 66 38.88 112 58 BVALU 183,180 202,735 1.107 60.67 63 38.41

Page 61 of 97

E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ 1 ------T AVG. % ------# TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR ------VICTORIA 1923 LOOP 277 78852 BEST WESTERN VICTORIA 95 1.025 061 40 BWEST 201,018 203,939 1.015 76.10 74 56.65 062 40 BWEST 186,921 191,687 1.025 76.10 69 52.66 063 40 BWEST 217,876 226,866 1.041 81.50 76 61.65 064 40 BWEST 201,832 204,630 1.014 81.50 68 55.61 071 40 BWEST 200,101 218,971 1.094 81.50 75 60.83 072 40 BWEST 173,610 260,518 1.501 89.50 80 71.57 073 40 BWEST 198,136 247,076 1.247 88.61 76 67.14 074 40 BWEST 204,900 212,798 1.039 84.51 68 57.83 081 40 BWEST 232,834 240,800 1.034 87.75 76 66.89 082 40 BWEST 235,084 245,673 1.045 92.69 73 67.49 083 40 BWEST 275,138 279,825 1.017 94.73 80 76.04 084 40 BWEST 236,049 239,573 1.015 91.64 71 65.10 091 40 BWEST 240,557 244,457 1.016 87.66 77 67.90 092 40 BWEST 232,054 236,768 1.020 87.94 74 65.05 093 40 BWEST 257,859 266,496 1.033 93.48 77 72.42 094 40 BWEST 232,160 239,363 1.031 92.53 70 65.04 101 40 BWEST 249,972 259,870 1.040 94.46 76 72.19 102 40 BWEST 253,907 255,961 1.008 97.31 72 70.32 103 40 BWEST 309,478 317,215 .000 106.36 81 86.20 104 40 BWEST 303,262 310,826 1.025 106.36 79 84.46 111 40 BWEST 413,897 424,244 .000 125.36 94 117.85 112 40 BWEST 416,649 420,296 1.009 129.87 89 115.47

2856 E MAIN ST 78852 CAMINO REAL HOTEL 06 1.250 062 16 26,108 32,635 .000 75.00 30 22.41 063 16 38,981 48,726 .000 65.00 51 33.10 064 16 34,482 43,103 .000 59.00 50 29.28 071 16 30,398 37,998 .000 54.50 48 26.39 072 16 50,428 60,457 1.199 54.50 76 41.52 073 16 34,801 43,501 .000 53.96 55 29.55 074 16 30,844 38,555 .000 53.96 49 26.19 081 16 41,265 51,581 .000 54.10 66 35.82 082 16 47,657 56,150 1.178 57.24 67 38.56 083 16 45,050 52,710 1.170 56.67 63 35.81 084 16 38,808 47,818 1.232 55.55 58 32.49 091 16 37,579 42,338 1.127 50.73 58 29.40 092 16 28,113 36,523 1.299 49.21 51 25.08 093 16 35,386 46,201 1.306 51.17 61 31.39 094 16 27,595 41,280 1.496 50.65 55 28.04 101 16 33,582 48,310 1.439 55.02 61 33.55 102 16 31,082 47,626 1.532 56.68 58 32.71 103 16 40,812 56,447 1.383 59.27 65 38.35 104 16 47,258 68,332 1.446 60.27 77 46.42 111 16 41,646 53,965 1.296 57.57 65 37.48 112 16 39,613 43,013 1.086 56.46 52 29.54

Page 62 of 97

E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ 1 ------T AVG. % ------# TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR ------VICTORIA 2297 DEL RIO BL 78852 COUNTRY HILL INN 06 1.250 062 28 47,012 58,765 .000 50.00 46 23.06 063 28 47,640 85,452 1.794 50.00 66 33.17 064 28 50,394 93,612 1.858 55.00 66 36.34 071 28 49,777 62,221 .000 50.00 49 24.69 072 28 73,994 116,329 1.572 60.00 76 45.66 073 28 82,659 114,896 1.390 64.35 69 44.60 074 28 58,563 85,730 1.464 57.35 58 33.28 081 28 116,079 122,753 1.057 64.72 75 48.71 082 28 120,059 140,926 1.109 68.77 80 55.31 083 28 85,332 104,109 1.220 65.11 62 40.41 084 28 59,355 80,521 1.357 57.68 54 31.26 091 28 59,577 79,142 1.328 55.58 56 31.41 092 28 65,698 86,416 1.287 53.91 63 33.92 093 28 74,821 97,815 1.307 54.48 70 37.97 094 28 81,388 100,783 1.238 51.06 77 39.12 101 28 59,974 75,330 1.256 50.49 59 29.89 102 28 64,379 87,146 1.354 57.17 60 34.20 103 28 69,758 87,150 1.249 57.74 59 33.83 104 28 119,915 130,089 1.085 57.74 87 50.50 111 28 86,666 130,000 1.500 52.00 99 51.59 112 28 85,000 110,000 1.529 1 53.87 80 43.17

1395 DEL RIO BL 78852 DREAM MOTEL 70 1.180 061 24 41,713 49,221 .000 35.85 64 22.79 062 24 29,768 35,833 1.204 35.85 46 16.41 063 24 35,637 46,827 1.314 36.55 58 21.21 064 24 35,218 43,118 1.224 36.55 53 19.53 071 24 24,739 39,148 1.582 35.00 52 18.12 072 24 37,481 57,761 1.541 37.50 71 26.45 073 24 35,628 51,946 1.458 36.68 64 23.53 074 24 32,005 43,472 1.358 36.68 54 19.69 081 24 40,576 65,096 1.604 39.66 76 30.14 082 24 36,121 68,552 1.898 41.68 75 31.39 083 24 33,872 46,082 1.360 37.30 56 20.87 084 24 26,342 32,237 1.224 35.65 41 14.60 091 24 30,394 35,743 1.176 35.66 46 16.55 092 24 24,839 32,679 1.316 33.62 45 14.96 093 24 28,425 36,870 1.297 32.76 51 16.70 094 24 26,793 36,023 1.344 32.42 50 16.31 101 24 31,093 40,643 1.307 32.05 59 18.82 102 24 29,210 38,232 1.309 33.02 53 17.51 103 24 30,461 46,901 1.540 35.37 60 21.24 104 24 34,483 45,763 1.327 34.57 60 20.73 111 24 36,517 42,612 1.167 32.57 61 19.73 112 24 40,372 47,878 1.186 33.74 65 21.92

2127 E MAIN ST 78852 VICTORIA INN 05 1.040 061 14 52,440 53,943 1.029 66.21 65 42.81 062 14 40,801 44,101 1.081 59.21 58 34.62 063 14 51,466 53,525 .000 63.51 65 41.56 064 14 52,588 54,692 .000 63.51 67 42.46 071 14 47,339 49,233 .000 62.51 62 39.07

Page 63 of 97

E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ 1 ------T AVG. % ------# TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR ------VICTORIA 2127 E MAIN ST 78852 VICTORIA INN 05 1.040 072 14 44,789 46,581 .000 65.51 56 36.56 073 14 53,561 53,681 1.002 63.86 65 41.68 074 14 55,795 58,027 .000 65.86 68 45.05 081 14 55,000 60,000 1.093 1 68.73 69 47.62 082 14 52,270 55,366 1.059 68.73 63 43.46 083 14 59,462 59,868 1.007 68.04 68 46.48 084 14 56,381 58,636 .000 68.72 66 45.53 091 14 59,554 61,936 .000 65.09 75 49.16 092 14 43,773 53,184 1.215 66.05 63 41.75 093 14 40,473 53,733 1.328 64.36 65 41.72 094 14 45,607 55,399 1.215 64.69 66 43.01 101 14 44,626 60,526 1.356 67.92 71 48.04 102 14 46,644 50,842 1.090 68.53 58 39.91 103 14 62,804 64,564 1.028 70.70 71 50.13 104 14 61,300 64,620 1.054 70.01 72 50.17 111 14 61,533 62,379 1.014 70.01 71 49.51 112 14 67,768 68,633 1.013 72.53 74 53.87

3301 E MAIN ST 78852 HAMPTON INN VICTORIA 01 1.100 061 65 HAMPT 296,785 334,291 1.126 78.31 73 57.14 062 65 HAMPT 256,417 304,638 1.188 75.31 68 51.50 063 65 HAMPT 308,982 330,658 1.070 74.51 74 55.29 064 65 HAMPT 299,545 308,598 1.030 71.51 72 51.61 071 65 HAMPT 292,537 311,892 1.066 71.51 75 53.31 072 65 HAMPT 352,880 403,839 1.144 88.51 77 68.27 073 65 HAMPT 354,379 375,642 1.060 87.62 72 62.82 074 65 HAMPT 350,146 375,686 1.073 87.62 72 62.82 081 65 HAMPT 351,745 370,286 1.053 88.79 71 63.30 082 65 HAMPT 441,527 461,018 1.044 102.97 76 77.94 083 65 HAMPT 509,800 529,022 1.038 116.37 76 88.47 084 65 HAMPT 401,584 424,234 1.056 100.46 71 70.94 091 65 HAMPT 440,178 462,817 1.051 98.00 81 79.11 092 65 HAMPT 362,411 377,766 1.042 92.15 69 63.87 093 65 HAMPT 414,195 437,415 1.056 92.71 79 73.15 094 65 HAMPT 370,420 396,942 1.072 93.55 71 66.38 101 65 HAMPT 452,134 469,124 1.038 102.39 78 80.19 102 65 HAMPT 485,578 511,204 1.053 113.73 76 86.43 103 65 HAMPT 451,702 556,198 1.231 116.69 80 93.01 104 65 HAMPT 413,955 531,259 1.283 117.59 76 88.84 111 65 HAMPT 514,925 527,822 1.025 117.59 77 90.23 112 65 HAMPT 554,075 566,675 1.023 119.75 80 95.80

1699 E MAIN ST 78852 HILL CREST MOTEL 10 .000 104 14 31,084 34,679 1.116 36.00 75 26.92 111 14 31,929 39,049 1.223 42.50 73 30.99 112 14 41,473 45,318 1.093 45.07 79 35.57

2007 LOOP 431 78852 HOLIDAY EXPRESS HOTEL & SU 00 1.050 061 66 HIEXP 310,496 332,394 1.071 78.34 71 55.96 062 66 HIEXP 305,324 335,327 1.098 75.54 74 55.83 063 66 HIEXP 327,902 348,144 1.062 80.54 71 57.34 064 66 HIEXP 309,617 344,568 1.113 80.54 70 56.75

Page 64 of 97

E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ 1 ------T AVG. % ------# TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR ------VICTORIA 2007 LOOP 431 78852 HOLIDAY EXPRESS HOTEL & SU 00 1.050 071 66 HIEXP 344,539 378,053 1.097 83.54 76 63.65 072 66 HIEXP 308,036 407,185 1.322 90.54 75 67.80 073 66 HIEXP 370,408 396,337 1.070 92.60 70 65.27 074 66 HIEXP 354,421 387,956 1.095 90.60 71 63.89 081 66 HIEXP 359,915 404,988 1.125 92.90 73 68.18 082 66 HIEXP 406,970 442,877 1.088 104.05 71 73.74 083 66 HIEXP 436,038 469,001 1.076 105.43 73 77.24 084 66 HIEXP 397,705 439,401 1.105 106.48 68 72.37 091 66 HIEXP 403,675 458,063 1.135 99.92 77 77.11 092 66 HIEXP 388,522 440,489 1.134 98.86 74 73.34 093 66 HIEXP 438,237 472,882 1.079 102.18 76 77.88 094 66 HIEXP 384,712 437,245 1.137 103.43 70 72.01 101 66 HIEXP 415,027 454,089 1.094 102.27 75 76.45 102 66 HIEXP 463,420 485,692 1.048 108.76 74 80.87 103 66 HIEXP 509,588 556,544 1.092 120.75 76 91.66 104 66 HIEXP 459,916 524,574 1.141 120.75 72 86.39 111 66 HIEXP 625,833 658,457 1.052 130.75 85 110.85 112 66 HIEXP 780,343 804,831 1.031 151.47 88 134.00

2423 E MAIN ST 78852 HOLLY INN 59 1.150 061 81 98,585 113,373 .000 37.08 42 15.55 062 81 103,382 118,889 .000 37.08 43 16.13 063 81 126,580 145,567 .000 35.58 55 19.53 064 81 124,727 143,436 .000 35.58 54 19.25 071 81 100,100 115,115 .000 35.58 44 15.79 072 81 111,011 127,663 .000 35.58 49 17.32 073 81 119,691 122,205 1.021 34.65 47 16.40 074 81 90,296 103,840 .000 33.65 41 13.93 081 81 95,089 109,352 .000 33.74 44 15.00 082 81 121,258 139,447 .000 33.74 56 18.92 083 81 124,195 142,824 .000 33.40 57 19.17 084 81 89,566 103,001 .000 31.82 43 13.82 091 81 103,402 118,912 .000 30.14 54 16.31 092 81 101,574 116,810 .000 28.94 55 15.85 093 81 120,994 139,143 .000 30.73 61 18.67 094 81 104,323 119,971 .000 33.16 49 16.10 101 81 99,833 114,808 .000 31.64 50 15.75 102 81 101,975 117,271 .000 34.59 46 15.91 103 81 115,904 133,290 .000 34.94 51 17.89 104 81 121,062 139,221 .000 34.94 53 18.68 111 81 134,173 154,299 .000 33.50 63 21.17 112 81 135,175 155,451 .000 33.67 63 21.09

2525 E MAIN ST 78852 LA QUINTA INN #569 82 1.080 061 129 LAQUN 391,122 481,651 1.231 58.36 71 41.49 062 129 LAQUN 360,795 477,592 1.324 56.36 72 40.68 063 129 LAQUN 441,059 527,481 1.196 62.56 71 44.45 064 129 LAQUN 383,361 479,210 1.186 62.56 65 40.38 071 129 LAQUN 385,713 501,096 1.299 63.56 68 43.16 072 129 LAQUN 471,885 585,599 1.241 68.56 73 49.88 073 129 LAQUN 368,767 477,922 1.296 63.61 63 40.27 074 129 LAQUN 400,542 472,712 1.180 65.00 61 39.83

Page 65 of 97

E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ 1 ------T AVG. % ------# TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR ------VICTORIA 2525 E MAIN ST 78852 LA QUINTA INN #569 82 1.080 081 129 LAQUN 369,937 477,481 1.291 65.18 63 41.13 082 130 LAQUN 468,368 541,291 1.156 69.23 66 45.76 083 130 LAQUN 544,244 623,148 1.145 71.82 73 52.10 084 130 LAQUN 477,826 557,798 1.167 70.92 66 46.64 091 130 LAQUN 328,437 457,440 1.393 62.44 63 39.10 092 130 LAQUN 408,530 478,043 1.170 62.51 65 40.41 093 130 LAQUN 483,333 530,117 1.097 64.81 68 44.32 094 130 LAQUN 414,696 491,854 1.186 65.13 63 41.12 101 130 LAQUN 462,539 524,764 1.135 64.40 70 44.85 102 130 LAQUN 515,123 564,792 1.096 69.54 69 47.74 103 130 LAQUN 657,881 711,455 1.081 77.31 77 59.49 104 130 LAQUN 645,266 663,013 1.028 75.31 74 55.44 111 130 LAQUN 649,632 680,131 1.047 75.31 77 58.13 112 130 LAQUN 650,452 701,699 1.079 79.26 75 59.32

2338 E MAIN ST 78852 MOTEL 6 VICTORIA 10 1.180 102 6 MTL 6 26,187 26,422 1.009 66.00 73 48.39 103 58 MTL 6 262,260 286,196 1.091 66.66 80 53.63 104 58 MTL 6 246,548 294,522 1.195 67.50 82 55.20 111 58 MTL 6 256,713 284,952 1.110 69.50 79 54.59 112 58 MTL 6 270,873 320,583 1.184 75.11 81 60.74

1906 N VETERANS 78852 RIO GRANDE SUITES 11 .000 112 10 34,780 35,300 1.015 62.16 62 38.79

HONDO 1829 COUNTY ROA 78861 777 RANCH 90 1.050 061 25 33,514 35,190 .000 140.34 11 15.64 062 25 53,916 56,612 .000 148.20 17 24.88 063 25 75,838 79,630 .000 132.11 26 34.62 064 25 138,625 145,556 .000 132.11 48 63.29 071 25 81,399 85,469 .000 132.11 29 37.99 072 25 57,275 60,139 .000 136.07 19 26.43 073 25 88,818 93,259 .000 128.11 32 40.55 074 25 118,914 124,860 .000 130.76 41 54.29 081 25 92,395 97,015 .000 131.81 33 43.12 082 25 72,913 76,559 .000 131.81 25 33.65

083 25 65,950 74,588 1.131 131.11 25 32.43 084 25 81,720 85,806 .000 131.10 28 37.31 091 25 41,775 43,864 .000 118.65 16 19.50 092 25 46,075 48,379 .000 116.55 18 21.27 093 25 40,363 42,381 .000 114.62 16 18.43 094 25 47,761 50,149 .000 118.63 18 21.80 101 25 33,105 34,760 .000 108.50 14 15.45 102 25 35,678 37,462 .000 98.91 17 16.47 103 25 65,598 68,878 .000 97.07 31 29.95 104 25 97,477 102,351 .000 104.10 43 44.50 111 25 50,125 52,631 .000 98.07 24 23.39 112 25 24,168 25,376 .000 97.29 11 11.15

Page 66 of 97

E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ 1 ------T AVG. % ------# TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR ------HONDO 1270 COUNTY ROA 78861 BACKROADS RESERVATIONS 05 1.050 061 25 39,755 41,743 .000 87.13 21 18.55 062 25 86,840 91,182 .000 92.01 44 40.08 063 25 96,155 100,963 .000 89.25 49 43.90 064 25 88,377 92,796 .000 90.25 45 40.35 071 25 40,407 42,427 .000 87.25 22 18.86 072 40 154,159 161,867 .000 103.26 43 44.47 073 40 167,063 175,416 .000 100.16 48 47.67 074 40 134,813 141,554 .000 92.62 42 38.47 081 40 64,290 67,505 .000 88.32 21 18.75 082 40 190,285 199,799 .000 109.60 50 54.89 083 40 175,819 184,610 .000 109.02 46 50.17 084 40 120,947 126,994 .000 105.01 33 34.51 091 40 101,947 107,044 .000 82.08 36 29.73 092 40 154,997 162,747 .000 84.65 53 44.71 093 40 152,935 160,582 .000 83.91 52 43.64 094 40 100,133 105,140 .000 90.65 31 28.57 101 40 81,563 85,641 .000 85.80 28 23.79 102 40 143,892 151,087 .000 87.09 48 41.51 103 40 209,327 219,793 .000 93.08 64 59.73 104 40 117,279 123,143 .000 92.78 36 33.46 111 40 58,515 61,441 .000 83.21 21 17.07 112 40 183,324 192,490 .000 94.45 56 52.88

301 US HIGHWAY 78861 BEST WESTERN 09 1.100 092 57 BWEST 121,284 133,412 .000 72.39 36 25.72 093 57 BWEST 183,991 202,390 .000 70.84 54 38.59 094 57 BWEST 135,437 148,981 .000 62.46 45 28.41 101 57 BWEST 122,560 134,816 .000 54.48 48 26.28 102 57 BWEST 212,955 234,251 .000 60.91 74 45.16 103 57 BWEST 244,299 268,729 .000 64.10 80 51.25 104 57 BWEST 190,721 209,793 .000 66.02 61 40.01 111 57 BWEST 240,495 264,545 .000 66.46 78 51.57 112 57 BWEST 257,978 283,776 .000 67.02 82 54.71

102 19TH ST 78861 EXECUTIVE INN 97 1.090 061 37 77,848 87,837 1.128 50.34 52 26.38 062 37 98,375 104,892 1.066 53.16 59 31.15 063 37 98,167 106,194 1.082 51.57 60 31.20 064 37 73,004 78,043 1.069 48.57 47 22.93 071 37 72,248 79,129 1.095 49.57 48 23.76 072 37 88,785 100,574 1.133 51.50 58 29.87 073 37 93,853 100,704 1.073 49.96 59 29.58 074 37 73,696 79,831 1.083 48.90 48 23.45 081 37 74,848 81,892 1.094 49.29 50 24.59 082 37 72,615 80,452 1.108 48.18 50 23.89 083 37 99,111 110,033 1.110 53.27 61 32.32 084 37 97,819 103,328 1.056 53.27 57 30.35 091 37 81,152 88,307 1.088 46.76 57 26.52 092 37 59,326 64,536 1.088 42.13 45 19.17 093 37 78,922 87,831 1.091 38.85 66 25.80 094 37 40,142 47,863 1.192 40.20 35 14.06 101 37 47,952 53,909 1.124 38.05 43 16.19

Page 67 of 97

E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ 1 ------T AVG. % ------# TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR ------HONDO 102 19TH ST 78861 EXECUTIVE INN 97 1.090 102 37 73,268 82,461 1.125 40.77 60 24.49 103 37 84,630 94,775 1.120 40.77 68 27.84 104 37 50,771 57,402 1.131 41.20 41 16.86 111 37 65,896 72,613 1.102 38.99 56 21.81 112 37 76,562 82,134 1.073 40.23 61 24.39

401 US HIGHWAY 78861 REGENCY INN FMR BVALU/REGE 71 1.035 061 52 97,355 118,453 1.217 44.50 57 25.31 062 52 91,456 104,821 1.146 46.99 47 22.15 063 52 116,108 137,353 1.183 46.16 62 28.71 064 52 59,552 68,820 1.156 42.56 34 14.39 071 52 62,455 73,137 1.171 42.56 37 15.63 072 52 BVALU 83,849 92,909 1.108 43.84 45 19.63 073 52 BVALU 117,385 126,071 1.074 44.85 59 26.35 074 52 BVALU 75,672 78,641 1.039 43.06 38 16.44 081 52 BVALU 62,716 63,916 1.019 41.90 33 13.66 082 52 BVALU 94,173 100,388 1.066 45.95 46 21.21 083 52 BVALU 115,333 119,113 1.033 46.25 54 24.90 084 52 BVALU 62,495 63,768 1.020 41.49 32 13.33 091 52 35,000 36,225 .000 1 32.24 24 7.74 092 52 BVALU 39,714 40,049 .000 32.24 26 8.46 093 52 BVALU 63,773 66,005 .000 36.84 37 13.80 094 52 BVALU 38,554 39,903 .000 35.00 24 8.34 101 52 BVALU 40,307 41,718 .000 32.26 28 8.91 102 51 BVALU 66,311 68,632 .000 32.75 45 14.79 103 51 BVALU 66,589 68,920 .000 32.75 45 14.69 104 51 BVALU 39,976 41,375 .000 33.73 26 8.82 111 51 BVALU 38,698 40,052 .000 31.26 28 8.73 112 51 BVALU 68,052 73,862 1.085 31.01 51 15.92

PEARSALL 1808 W COMAL ST 78061 BEST WESTERN PEARSALL INN 08 1.047 082 48 BWEST 167,108 179,781 1.076 86.11 48 41.16 083 48 BWEST 271,828 318,875 1.173 89.21 81 72.21 084 48 BWEST 244,077 258,707 1.060 87.38 67 58.58 091 48 BWEST 251,551 279,899 1.113 80.87 80 64.79 092 48 BWEST 256,212 282,548 1.103 85.23 76 64.69 093 48 BWEST 283,566 317,853 1.121 91.16 79 71.98 094 48 BWEST 244,018 268,410 1.100 90.23 67 60.78 101 48 BWEST 280,101 302,972 1.082 92.52 76 70.13 102 48 BWEST 276,997 357,226 1.290 99.43 82 81.78 103 48 BWEST 357,330 418,975 1.173 110.63 86 94.88 104 48 BWEST 439,676 450,711 1.025 112.53 91 102.06 111 48 BWEST 439,410 460,808 1.049 115.53 92 106.67 112 48 BWEST 460,317 479,677 1.042 132.12 83 109.82

PEARSALL 613 N OAK ST 78061 PEARSALL EXECUTIVE INN 78 1.035 061 21 41,134 44,445 1.080 50.03 47 23.52 062 21 48,272 53,454 1.107 50.03 56 27.97 063 21 35,562 44,327 1.246 47.53 48 22.94 064 21 41,084 62,665 1.525 49.53 65 32.44 071 21 48,664 60,565 1.245 50.53 63 32.04 072 21 43,677 65,296 1.495 50.53 68 34.17

Page 68 of 97

E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ 1 ------T AVG. % ------# TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR ------PEARSALL 613 N OAK ST 78061 PEARSALL EXECUTIVE INN 78 1.035 073 21 67,020 70,103 1.046 51.01 71 36.29 074 21 67,038 70,852 1.057 52.01 70 36.67 081 21 48,880 53,005 1.084 1 53.21 53 28.04 082 21 61,227 63,370 .000 53.21 62 33.16 083 21 60,657 63,011 1.115 52.68 62 32.61 084 21 48,502 53,102 1.095 50.50 54 27.49 091 21 47,148 59,287 1.257 47.84 66 31.37 092 21 69,090 92,085 1.333 1 50.96 95 48.19 093 21 63,989 69,669 1.089 52.58 69 36.06 094 21 75,390 84,460 1.120 57.95 75 43.72 101 21 70,884 97,470 1.375 64.22 80 51.57 102 21 55,882 132,873 2.378 82.05 85 69.53 103 21 127,559 138,673 1.087 84.89 85 71.78 104 21 150,545 156,709 1.041 86.59 94 81.11 111 21 171,897 178,754 1.040 101.59 93 94.58 112 21 170,705 175,436 1.028 105.25 87 91.80

1807 W COMAL ST 78061 ROYAL INN 90 1.250 061 36 109,839 117,387 1.069 53.78 67 36.23 062 36 131,151 134,673 1.027 57.58 71 41.11 063 36 124,312 129,687 1.043 58.78 67 39.16 064 36 115,536 117,354 1.016 58.78 60 35.43 071 36 106,379 112,638 1.059 56.78 61 34.76 072 36 91,101 158,516 1.740 70.78 68 48.39 073 36 118,963 160,481 1.349 67.10 72 48.45 074 36 128,940 147,406 1.143 67.10 66 44.51 081 36 96,451 127,510 1.322 64.97 61 39.35 082 36 91,272 92,669 1.015 58.90 48 28.29 083 36 117,562 126,186 1.073 60.29 63 38.10 084 36 107,600 134,500 .000 58.17 70 40.61 091 36 110,105 114,215 1.053 51.31 69 35.25 092 36 138,748 145,630 1.050 56.56 79 44.45 093 36 111,604 113,488 1.017 55.11 62 34.27 094 36 102,227 107,880 1.055 54.55 60 32.57 101 36 142,895 160,880 1.126 64.82 77 49.65 102 36 143,637 195,112 1.358 76.77 78 59.56 103 36 189,683 240,026 1.265 79.55 91 72.47 104 36 208,518 226,891 1.088 79.55 86 68.51 111 36 240,312 321,402 1.337 105.55 94 99.20 112 36 286,112 329,684 1.152 113.49 89 100.64

UVALDE 2005 HWY 90 EAS 78801 AMBER SKY MOTEL 70 1.150 061 40 18,772 27,509 1.465 22.57 34 7.64 062 40 18,308 33,647 1.838 21.57 43 9.24 063 40 33,893 67,987 2.006 24.57 75 18.47 064 40 21,145 25,798 1.220 23.27 30 7.01 071 40 28,111 33,593 1.195 23.27 40 9.33 072 40 33,446 45,967 1.374 23.27 54 12.63 073 40 16,500 23,051 1.397 21.35 29 6.26 074 40 43,054 59,177 1.374 23.35 69 16.08 081 40 40,051 51,107 1.276 23.89 59 14.20 082 40 51,277 79,062 1.542 27.94 78 21.72

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E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ 1 ------T AVG. % ------# TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR ------UVALDE 2005 HWY 90 EAS 78801 AMBER SKY MOTEL 70 1.150 083 40 19,435 73,715 3.793 27.66 72 20.03 084 40 75,201 81,450 1.083 28.95 76 22.13 091 40 63,273 83,091 1.313 29.32 79 23.08 092 40 52,443 59,044 1.126 27.66 59 16.22 093 40 38,822 50,059 1.375 26.95 50 13.60 094 40 39,160 40,808 1.042 26.67 42 11.09 101 40 32,466 49,460 1.523 25.71 53 13.74 102 40 36,148 68,659 1.899 29.37 64 18.86 103 40 55,627 63,960 1.150 28.86 60 17.38 104 40 48,355 66,002 1.365 29.26 61 17.94 111 40 57,063 65,821 1.153 28.56 64 18.28 112 40 70,290 81,378 1.158 29.59 76 22.36

701 E MAIN 78801 BEST VALUE INN FMR BWEST 59 1.130 061 85 BWEST 127,899 144,526 .000 40.90 46 18.89 062 85 BWEST 137,554 140,467 1.021 40.90 44 18.16 063 85 BWEST 197,945 223,678 .000 51.50 56 28.60 064 85 BWEST 145,474 164,386 .000 45.50 46 21.02 071 85 BWEST 125,193 141,468 .000 42.25 44 18.49 072 85 BWEST 193,205 218,322 .000 44.25 64 28.23 073 85 BWEST 188,200 192,152 1.021 50.74 48 24.57 074 85 BWEST 136,780 154,561 .000 46.24 43 19.76 081 85 BWEST 138,832 139,832 1.007 47.31 39 18.28 082 85 BWEST 231,164 261,215 .000 47.31 71 33.77 083 85 BWEST 236,993 267,802 .000 46.84 73 34.25 084 85 BWEST 127,883 144,508 .000 47.31 39 18.48 091 85 BWEST 111,262 125,726 .000 42.92 38 16.43 092 85 BWEST 132,324 134,080 1.013 41.24 42 17.33 093 85 BWEST 131,767 148,897 .000 40.18 47 19.04 094 85 BWEST 68,808 77,753 .000 34.82 29 9.94 101 85 BVALU 85,468 96,579 .000 33.62 38 12.62 102 85 BVALU 100,911 147,723 1.464 39.68 48 19.10 103 85 BVALU 163,225 190,898 1.170 40.40 60 24.41 104 85 BVALU 128,409 138,229 1.076 38.55 46 17.68 111 85 BVALU 163,943 176,292 1.075 40.00 58 23.04 112 85 BVALU 201,210 227,672 1.132 39.37 75 29.43 1108 CHALK BLUF 78801 CHALK BLUFF PARK 66 1.020 061 29 30,788 31,404 .000 48.59 25 12.03 062 29 114,950 117,249 .000 65.59 68 44.43 063 29 167,559 170,058 1.015 85.59 74 63.74 064 29 12,499 170,058 .000 70.59 90 63.74 071 29 26,044 26,565 .000 50.59 20 10.18 072 29 105,795 106,191 1.004 65.59 61 40.24 073 29 126,837 129,374 .000 85.72 57 48.49 074 29 22,222 22,297 1.003 70.00 12 8.36 081 29 29,454 30,043 .000 66.50 17 11.51 082 29 62,846 65,900 .000 66.50 38 24.97 083 29 209,853 214,050 .000 85.64 94 80.23 092 29 71,500 72,930 .000 66.44 42 27.64 093 29 108,972 111,151 .000 80.43 52 41.66 102 29 91,885 93,723 .000 82.86 43 35.51 103 29 116,344 118,671 .000 78.34 57 44.48

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E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ 1 ------T AVG. % ------# TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR ------UVALDE 2801 E MAIN ST 78801 HOLIDAY EXPRESS 09 1.060 092 70 HIEXP 238,745 255,159 1.058 92.15 43 40.06 093 88 HIEXP 372,357 470,002 1.232 89.79 65 58.05 094 88 HIEXP 355,659 415,236 1.148 86.70 59 51.29 101 88 HIEXP 361,623 476,876 1.319 88.50 68 60.21 102 88 HIEXP 439,801 551,639 1.254 101.47 68 68.89 103 88 HIEXP 550,664 585,684 1.064 106.52 68 72.34 104 88 HIEXP 532,229 566,067 1.064 105.00 67 69.92 111 88 HIEXP 575,209 610,617 1.062 111.50 69 77.10 112 88 HIEXP 678,455 719,162 .000 116.55 77 89.81

810 E MAIN ST 78801 INN OF UVALDE 75 1.300 061 69 99,527 158,477 1.592 49.04 52 25.52 062 69 127,325 162,936 1.280 50.04 52 25.95 063 69 152,386 173,167 1.136 55.04 50 27.28 064 69 130,274 136,287 1.046 50.04 43 21.47 071 69 137,350 146,064 1.063 50.04 47 23.52 072 69 153,991 181,746 1.180 50.04 58 28.95 073 69 187,693 216,035 1.151 54.49 62 34.03 074 69 137,448 162,811 1.185 51.49 50 25.65 081 69 135,899 148,733 1.094 51.65 46 23.95 082 69 173,204 228,210 1.318 56.72 64 36.34 083 69 177,087 224,607 1.268 53.46 66 35.38 084 69 120,173 138,891 1.156 51.97 42 21.88 091 69 120,135 136,759 1.138 49.22 45 22.02 092 69 114,391 133,740 1.169 47.74 45 21.30 093 69 108,909 131,566 1.208 45.35 46 20.73 094 69 64,518 86,069 1.334 44.88 30 13.56 101 69 69,457 111,501 1.677 44.37 40 17.96 102 69 106,958 161,411 1.509 51.89 50 25.71 103 69 150,631 178,797 1.187 52.41 54 28.17 104 69 129,676 148,612 1.146 50.00 47 23.41 111 69 114,205 180,761 1.583 50.00 58 29.11 112 69 180,155 216,437 1.201 54.39 63 34.47

920 E MAIN ST 78801 QUALITY INN FMR HOLIDAY 1 83 1.160 061 114 HOLID 342,590 369,672 1.079 62.17 58 36.03 062 114 HOLID 403,054 425,481 1.056 64.57 64 41.01 063 114 HOLID 422,844 454,957 1.076 67.57 64 43.38 064 114 HOLID 358,512 372,688 1.040 67.57 53 35.53 071 114 HOLID 362,287 384,163 1.060 67.57 55 37.44 072 114 HOLID 438,371 452,635 1.033 68.57 64 43.63 073 114 HOLID 408,132 424,457 1.040 66.89 60 40.47 074 114 HOLID 368,982 396,886 1.076 65.59 58 37.84 081 114 QUALY 328,468 436,645 1.329 67.11 63 42.56 082 114 QUALY 441,162 570,595 1.293 79.52 69 55.00 083 114 QUALY 512,711 562,838 1.098 74.76 72 53.66 084 114 QUALY 378,103 404,192 1.069 69.24 56 38.54 091 114 QUALY 318,777 358,633 1.125 61.79 57 34.95 092 114 QUALY 347,423 365,448 1.052 60.71 58 35.23 093 114 QUALY 226,224 279,621 1.236 55.06 48 26.66 094 114 QUALY 164,362 175,975 1.071 54.50 31 16.78 101 114 QUALY 232,598 248,136 1.067 50.92 47 24.18

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E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ 1 ------T AVG. % ------# TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR ------UVALDE 920 E MAIN ST 78801 QUALITY INN FMR HOLIDAY 1 83 1.160 102 114 QUALY 366,819 392,845 1.071 67.50 56 37.87 103 114 QUALY 375,149 456,320 1.216 68.18 64 43.51 104 114 QUALY 279,754 352,615 1.260 58.58 57 33.62 111 114 QUALY 393,724 460,513 1.170 64.58 69 44.88 112 114 QUALY 597,654 646,645 1.082 80.12 78 62.33

CNTY RD 350 / 1 78838 B E N T RIVER RETREAT 99 1.020 062 7 30,408 31,016 .000 145.74 33 48.69 063 7 34,530 35,221 .000 145.74 37 54.69 072 7 30,972 31,591 .000 145.74 34 49.59 073 7 34,530 35,221 .000 144.28 38 54.69 082 7 37,544 38,295 .000 157.30 38 60.12 083 9 75,676 78,476 1.037 155.73 61 94.78 093 9 68,168 69,531 .000 151.74 55 83.98 102 9 54,538 55,629 .000 156.32 43 67.92 103 9 81,861 83,498 .000 161.92 62 100.84 112 9 50,939 51,958 .000 156.35 41 63.44

ENDNOTES: ------1. Factor used to adjust taxable to gross revenues. Area factor used if property data not available. Taxable equals 89% of gross Statewide. 2. A number or a 'Y' indicates quarter's revenues were estimated. 3. Estimated Average Daily Rate (e.g. 60-85% of 'rack single'); 4. Occupancy derived from calculated roomnights sold (gross room reve- nues divided by Average Daily Rate), divided by roomnights available. 5. Total REVenues Per Available Room per day, or 'REVPAR'; Prepared from State Comptroller, chain directories and private records. Includes all quarterly reports exceeding $18,000 (otherwise omitted).

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EXHIBIT IV

PERIOD: TWELVE MONTHS ENDING JUN 30, 2011 LODGING MARKET: TEXAS' TOP OIL AND GAS PRODUCING COUNTIES

# * EST. $ EST. #* RMS % RNS % AMT. % EST. $ $ BRAND HTL 000S RMS 000S RNS 000S AMT %OCC RATE RPAR ------CHAINS HILTON 2 .6 .6 136 .8 16,734 1.3 66.8 122.75 82.02 MARRIOTT 2 .6 .7 150 .8 25,935 2.0 63.8 173.16 110.50 OMNI 2 .8 1.0 157 .9 17,916 1.4 52.5 113.92 59.79 RENAISSAN 1 .2 .2 35 .2 4,387 .3 58.1 125.44 72.84 TOT UPSCALE 7 2.2 2.5 478 2.7 64,972 5.1 59.9 135.83 81.36

EMBASSY 4 .7 .8 182 1.0 23,529 1.8 68.9 129.54 89.28 HOMEWOOD 11 1.0 1.1 250 1.4 27,117 2.1 69.8 108.41 75.65 RESIDENCE 12 1.1 1.3 291 1.6 33,501 2.6 71.1 115.00 81.78 STAYBRIDG 5 .5 .5 114 .6 11,575 .9 67.7 101.62 68.84 TOT SUITES 32 3.3 3.8 837 4.7 95,721 7.4 69.8 114.36 79.78

COURTYARD 12 1.2 1.4 296 1.7 30,005 2.3 64.9 101.28 65.76 HILT GARD 9 1.2 1.4 266 1.5 29,544 2.3 58.9 111.19 65.49 HOLID INN 10 2.0 2.3 420 2.4 36,217 2.8 57.3 86.28 49.44 HYATT PLC 2 .2 .2 43 .2 4,326 .3 55.9 100.54 56.18 RADIS HTL 3 .4 .5 84 .5 6,704 .5 52.6 79.39 41.79 TOT MID/UPS 36 5.1 6.0 1,109 6.3 106,796 8.3 59.1 96.28 56.89

CANDLWOOD 9 .7 .8 152 .9 11,021 .9 62.0 72.31 44.83 COMFO STE 36 2.4 2.7 471 2.7 36,446 2.8 54.6 77.41 42.28 HAWTH 2 .2 .2 51 .3 4,367 .3 66.0 85.15 56.17 HAWTHORN 3 .3 .3 57 .3 4,352 .3 62.4 75.79 47.32 QUAL STES 1 .1 .1 16 .1 1,242 .1 54.7 76.77 42.02 SPRNGHILL 4 .4 .5 98 .6 8,091 .6 63.9 82.81 52.90 TOWNPLACE 5 .5 .6 136 .8 11,725 .9 70.0 86.34 60.43 OTHER MIN 3 .3 .3 66 .4 5,434 .4 63.4 81.82 51.88 TOT MIN STE 63 4.8 5.6 1,048 5.9 82,678 6.4 59.6 78.89 47.01

BEST WEST 101 5.9 6.8 1,244 7.0 95,431 7.4 57.7 76.69 44.22 CNTRY INN 5 .3 .4 71 .4 5,294 .4 58.7 74.16 43.56 COMFO INN 25 1.4 1.7 290 1.6 20,719 1.6 55.0 71.48 39.31 DRURY INN 4 .5 .5 103 .6 8,459 .7 60.7 82.48 50.05 FAIRFIELD 20 1.6 1.8 357 2.0 30,843 2.4 62.3 86.38 53.85 HAMPTON 50 3.9 4.5 871 4.9 82,403 6.4 61.9 94.64 58.54 HOLID EXP 72 5.5 6.4 1,267 7.2 120,681 9.4 63.2 95.28 60.18 LA QUINTA 64 5.6 6.5 1,192 6.7 85,812 6.7 57.9 72.01 41.72 SLEEP INN 9 .6 .7 117 .7 8,590 .7 56.8 73.73 41.88 WINGATE 2 .2 .2 38 .2 3,285 .3 56.5 85.71 48.39 TOT LTD SVE 352 25.5 29.5 5,549 31.4 461,518 35.9 59.7 83.17 49.67

BUDG STES 2 .8 .9 184 1.0 6,172 .5 65.8 33.56 22.08 EXT AMERI 5 .5 .6 131 .7 6,300 .5 68.9 48.25 33.26 INTOWN ST 1 .1 .1 30 .2 951 .1 69.0 31.20 21.54 STUDIO 6 5 .4 .5 99 .6 4,755 .4 65.2 48.28 31.47 VALUE PLC 10 1.2 1.4 302 1.7 9,797 .8 69.4 32.42 22.50 OTHER EXT 4 .5 .5 98 .6 3,207 .2 57.5 32.68 18.78 TOT EXT STA 27 3.5 4.0 844 4.8 31,183 2.4 66.4 36.96 24.54

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PERIOD: TWELVE MONTHS ENDING JUN 30, 2011 LODGING MARKET: TEXAS' TOP OIL AND GAS PRODUCING COUNTIES

# * EST. $ EST. #* RMS % RNS % AMT. % EST. $ $ BRAND HTL 000S RMS 000S RNS 000S AMT %OCC RATE RPAR ------CHAINS BAYMONT 10 .6 .7 129 .7 8,325 .6 55.1 64.73 35.64 BST VALUE 36 2.2 2.6 392 2.2 15,346 1.2 48.6 39.15 19.03 CLARION 1 .2 .2 32 .2 1,671 .1 58.5 52.15 30.52 DAYS INN 51 3.3 3.8 638 3.6 33,367 2.6 53.0 52.33 27.75 ECONOLODG 9 .6 .6 114 .6 6,406 .5 56.1 56.28 31.59 HO JO 5 .5 .6 75 .4 2,952 .2 42.0 39.59 16.63 MICROTEL 1 .1 .1 10 .1 582 .0 55.6 57.37 31.89 MOTEL 6 30 2.8 3.3 642 3.6 29,614 2.3 62.3 46.10 28.72 QUALITY 21 1.7 1.9 329 1.9 19,862 1.5 53.9 60.46 32.60 RAMADA 10 .8 1.0 126 .7 6,128 .5 40.5 48.82 19.78 RED ROOF 6 .6 .8 134 .8 6,566 .5 56.6 48.97 27.72 RODEWAY 6 .3 .3 49 .3 1,967 .2 46.8 39.77 18.62 SUPER 8 46 2.6 3.1 506 2.9 28,226 2.2 52.4 55.76 29.20 TRAVELODG 6 .5 .6 85 .5 3,791 .3 43.8 44.63 19.56 OTHER BUD 21 1.0 1.1 164 .9 6,993 .5 47.1 42.72 20.10 TOT BUDGET 260 17.8 20.6 3,424 19.4 171,796 13.4 52.7 50.18 26.44

TOT CHAINS 777 62.2 72.0 13,289 75.2 1,014,664 78.9 58.6 76.35 44.71

INDEPENDENTS $100+ ADR 99 4.5 5.2 813 4.6 114,515 8.9 49.6 140.91 69.90 $60-99ADR 75 2.9 3.3 543 3.1 40,941 3.2 52.1 75.37 39.24 LT $60ADR 339 16.8 19.5 3,034 17.2 116,342 9.0 49.4 38.34 18.95 TOT INDEP 513 24.2 28.0 4,390 24.8 271,798 21.1 49.8 61.91 30.82

TOT MARKET 1,289 86.3 100.0 17,679 100.0 1,286,463 100 56.1 72.77 40.82

* All figures annualized. Includes taxed and est non-tax room revenues. Independents are categorized by price: $100+, $60-99.99, and under $60)

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EXHIBIT V A STUDY OF THE EFFECT OF HOTEL SIZE ON PERFORMANCE IN THE TEXAS HOTEL INDUSTRY THE CASE FOR DOWNSIZING NEW HOTELS

11/30/99 By Douglas W. Sutton and Bruce H. Walker

Source Strategies has long contended that the number of rooms a developer offers in a new property is one of the key factors in determining a venture's relative success or failure. It is every bit as important to size a hotel project properly as it is to select the appropriate brand, and to develop in a suitable market and location. We have previously conducted extensive studies of the lodging market that support our hotel sizing contention, and we have taken this opportunity to re-examine the issue using our extensive database of hotel and motel performance for the State of Texas.

Before delving into the numbers that define the role of room count in a hotel's performance, we should first highlight the basic industry theory of 'right- sizing' a property. The premise offered by many inexperienced developers is "If I can make a profit constructing a 50 room hotel in a given market, it would be twice as profitable to develop 100 rooms." In virtually all cases nothing could be farther from the truth. At some point adding rooms to a project reaches a point of diminishing returns, and the investment in the additional rooms cannot be economically justified.

To illustrate this point, mentally divide our hypothetical 100 room project into two 50 room hotels. The initial 50 rooms may perform very well, with occupancies over 70% and a very strong rate structure. However, the second 50 rooms are only utilized when there is overflow from the first hotel because its rooms are 100% occupied. Effectively, the second 50 rooms may only attain an occupancy of 30% or less. This low level of occupancy may prompt the general manager to lower rates to bolster occupancy, but this is a losing battle. Ultimately, overbuilding causes REVPAR erosion in the property, and in the market as a whole.

Today's developers and lenders would not seriously consider involvement in a 50 room project operating at this low level, but often times they accomplish the same end by pushing for more rooms in a project than the market can effectively support. If we now mentally put these two 50 room properties back together (one operating at 70%, the other at 30% occupancy), what we end up with is an oversized 100 room hotel that is running a mediocre 50% occupancy.

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Over-sizing a hotel makes it difficult, if not impossible, to be competitive in a marketplace. There are a finite number of roomnights sold to be divided among existing hotels in the market, and developing a more conservatively sized property helps insure that a profitable level of those roomnights can be captured. Building a hotel is not the 'Field of Dreams'.... If you build it - they won't come.... With the exception of destination resorts and some unique convention hotels, people do not go someplace because there is a hotel. Rather, they stay in a hotel because they want to be near someplace.

Builders who construct too many rooms usually put themselves in unenviable financial situations. Many hotels which we see put up for sale were developed with far too many rooms. The owners, having had difficulty getting a return on their investment, are often trying to get out from under a bad investment. There are even drastic cases of properties bulldozing entire wings to provide additional parking, because those extra rooms are a financial burden, remaining unsold the vast majority of the time.

Now that we've outlined the basic economic benefits of 'building small', let's look into hotel performance numbers and see if they support this development principle. We analyzed two separate hotel samplings: First we will look at Comfort Inns across Texas as a selected brand sampling. Then we will look at all branded hotels built during a given period of time for a more diverse sampling.

COMFORT INN - ANALYSIS OF SIZING AND ITS IMPACT ON PERFORMANCE

In our initial analysis, we selected a sampling of Texas Comfort Inn branded properties ranging in size from 36 to 75 rooms; they are all 'Limited Service' hotels. We excluded those properties located in exclusive, higher priced markets, since they would naturally support larger room counts while maintaining strong performance levels and would distort the findings. The resulting sample included 55 Comfort Inn hotels located across Texas.

The following chart of performance statistics from the latest year on file (12 months ending September 30, 1999) clearly illustrates the consistent curve, showing marked declines in performance as room count increases. This decline was exhibited in all three measures shown, Occupancy, Average Daily Rate, and REVPAR:

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Year Ending 6/30/99 Results

Average # of Daily Units Occupancy Rate REVPAR 36-40 66.9 55.25 36.95 41-45 65.3 57.34 37.45 46-50 66.5 57.38 38.17 51-55 62.8 56.02 35.20 56-60 61.8 54.26 33.55 61-65 56.6 55.33 31.33 66-70 44.6 45.71 20.41 71-75 43.8 44.20 19.38 Combined: 52 63.2 55.46 35.03

Looking only at occupancy, the following graph gives a clear depiction of the notable negative impact of larger room counts on a hotel's ability to maintain an acceptable level of roomnights sold. Properties with lower room counts were clearly able to sustain a higher level of occupancy. Average occupancy ranged from 66.9% for properties of 36-40 rooms, downward to a much lower 43.8% average occupancy for properties in the 71-75 room size bracket.

When looking at REVPAR, the following graph follows a very similar performance curve, ranging from an average REVPAR of $36.95 for properties of 36-40 units, downward to a mediocre $19.38 average REVPAR for properties in the 71-35 unit size bracket. Note that the downward slide in both graphs did not begin until room counts exceeded 35 units. Prior to that, a mild upward trend is experienced. This appears to indicate that, on average, 50 rooms is the 'optimum' size for a Comfort Inn in Texas markets (excluding high priced areas). Of course, this is an average number for this type of market. Each project must be examined on an individual basis to determine the proper size to develop within its given market.

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The above chart and graphs clearly illustrates that Developers often missed the mark, building more rooms than 'optimum.' 'Optimum' is defined as generating the highest return on invested capital, and is closely tied to occupancy and REVPAR generation.

Analyzing the above data provides a measure of the effect of over building. For the typical range of rooms for Comfort Inn projects (40-75 rooms) outside of higher priced areas, the occupancy dropped 23.1 points (a full 35%) from 66.9% to 43.8% as room counts escalated. With a 35 room increase in rooms from the 36-40 room size bracket to the 71-75 room size bracket, a resulting 35% drop in occupancy is experienced.

The key question, is how to apply this principle to a given hotel project. Naturally, each project would have to be judged on its individual merits, but looking at an 'average' project for a single brand and product is very revealing. All are Comfort Inns. All are very similar products in similar market environments, leaving size as the major variable in performance.

In our sampling, the average project is 65 rooms in size. At this size, the average occupancy is 62.8%. If we built 36% fewer rooms (42 rooms) our average occupancy would rise a moderate 6.5% to 66.9%. Conversely, if we built 36% more than average, (71 rooms) our average occupancy plummets by 42.5% to 43.8%.

Clearly there are some basic economic principles at work. Comfort Inns are conservatively-sized. Building smaller than the average of 65 rooms yields slightly higher occupancies, but the ability to charge ever higher rates as size decreases is marginal. As rates rise, some consumers perceive lost value and will stay at another property. On the other side of the coin, properties built larger than the average 65 rooms suffer serious occupancy declines. At some

Page 78 of 97 point the need for additional rooms that was envisioned by the optimistic developer is simply not there, and the extra rooms only serve to depress the overall performance of the property.

BRANDED HOTELS - ANALYSIS OF SIZING AND ITS IMPACT ON PERFORMANCE In our second analysis, we selected a sampling of all Texas branded hotels constructed from 1970-1975; 91 properties across Texas, predominantly 'Full Service'. Our sampling was limited to hotels of less than 135 rooms. We once again excluded those properties located in exclusive, higher priced markets. For our analysis we examined performance results from the year 1985 when all subject hotels were 10 to 15 years old, well into their aging life cycles.

The following chart of performance statistics from 1985 for branded properties throughout Texas clearly illustrates the downward curve, with definite erosion in performance measures as room count increases:

1985 Performance Results

Average # of # of Daily Hotels Units Occupancy Rate REVPAR 2 00-44 70.0 37.88 26.50 3 45-59 73.9 36.13 26.71 7 60-74 66.8 31.10 20.77 14 75-89 62.7 31.65 19.86 29 90-104 60.9 32.42 19.75 16 105-119 57.8 26.25 15.18 20 120-134 55.5 29.35 16.28 Combined: 91 98 59.8 30.34 18.14

With occupancy declines being the strongest indicator of the negative impact of building too large, the following graph provides a clear picture of the descending performance slide as room counts increase. Once again, properties with lower room counts were more insulated from market competition and were therefore able to be more competitive in both favorable and depressed market environments. Average occupancy ranged from 70% for properties of 58 rooms or less, downward to a much lower 55.5% average occupancy for properties in the 120- 134 room size bracket, after peaking at 73.9% in the 45-59 size range.

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As with the Comfort Inn analysis, the above data provides a measure of the effect of over building. However, since a number of varying brands are considered in this sample, the typical range in size of these projects ranges from about 40 to 135. This is a wider range than the Comfort sampling, since many of the brands in this sample typically have larger room counts than a Comfort Inn. This is partially due to some brands' ability to support higher room counts, and partially due to the tendency to overbuild in the early 1970s, when all hotels in this sample were constructed.

While the 65 room average for our Comfort Inn sample is reasonably close to optimum sizing for that brand, the 98 room average for this analysis appears to be oversized. In our assessment, the optimum average number of rooms for this sampling would have been 60 to 41 rooms, depending upon brand. In 1985, this roomcount supported occupancies near 70%, with an average REVPAR of almost $27. Compare this to the average capacity of 98 rooms attaining a much lower average occupancy of 60.9% and REVPAR below $20. Clearly this lower level of performance can be attributed to over-sizing projects in the early 1970s.

Looking at our average (oversized) roomcount of 98 rooms, increasing the size by 30% (135 rooms) would cause occupancy to slide 10% from 60.9% to 55.5%. On the other hand, making the average project smaller (58 rooms, or 75% smaller) would improve occupancy to 73.9%, or a healthy 21% increase.

For the sake of comparison, let us assume that the average property was more appropriately sized at about 58 rooms. If the project size were increased to 135 rooms, the largest range in our sample, occupancy would suffer a significant 33% decline from optimum levels.

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Of course this assumes that locational differences are not significant. We believe this is true; the large sample and clear correlation between size and performance support this conclusion.

SUMMARY The data is clear. In most cases, small hotels outperform large hotels, with the exception of higher-priced markets where competitive barriers to entry exist (e.g. lack of land, excessive land cost, building restrictions, etc.).

Common sense explains this occurrence: a successful 100 room hotel will inevitably prompt the development of one or more new, small hotels of similar quality in the immediate area. In a competitive market environment, the smaller hotel has a distinct advantage and wins - almost every time.

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EXHIBIT VI

START-UP PERFORMANCE OF NEW HOTELS AND MOTELS

A new study by Source Strategies, Inc., utilizing all new chain hotels opened in Texas between 1990 and 1994, shows that new hotels and motels provide their peak performance in Years III through V, when they typically reach 112% of their 20- year average REVPAR performance level.

In other words, the newness of a property is an advantage on the order of a 12% premium in Years III through V - versus the average REVPAR that would otherwise be expected for that property over a twenty-year period. That's because the consumer almost always picks new over old because, to them, 'new' means 'clean' and 'new' means 'value.' Perhaps this is not news to many, but it is highly important to those who forecast the performance of new properties.

Here's what the graph looks like for the first twelve years for new properties opened in the moderately-good and improving markets of the 1990's. The years after peak are projected based on two major previous studies: one by Limited Service in the early 1980's and the second last year by Source Strategies, Inc.

Year I at 92% of the 20 Year Average, Year II at 107%

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The study found that a property could expect a REVPAR at Year I of 92% of the twenty-year average for a project. In Year II, this would move to 107% and to 112% in Years' III through V.

For example, if over the twenty-year span of the project, we expect a hypothetical new hotel to generate 105% of the market average REVPAR, this means that in Year I it would generate 97% of market (105% times 92%), and in Year II 112% (105% times Year II's 107%), and then peak at 118% for Years III-V.

Study Method The underlying design for this study was to determine what effect a property's age had on its REVPAR during the first five years of operation.

From two other studies, we know that properties will decline at 1.67% per year, versus the market average, over long periods of time. The second study sample consisted of all new Texas development in the early 1980's, a time of major under-supply. Consequently, the first few years performance of this group of hotels and motels was probably be overstated - versus the current, more-normal times. The current study confirmed that belief.

The current study's design was to develop the REVPAR index for every new chain property (each new property's REVPAR, divided by the REVPAR of all nearby hotels and motels). Then all the resulting indices were averaged.

This process was done for each year of development, 1990, 1991, 1992, 1993 and 1994, in order to obtain data for "Year I," "Year II" and so on. These were averaged as well to obtain an over-all, average Year I result.

This process produced the graph curve shown above, and is reflective of the particular mix of chain properties, a mix which produced REVPAR slightly above the market average. To eliminate the effect of a specific mix of chains, the scale was moved down slightly, so that the application of the year-by-year REVPAR indices to any project would result in averaging 100 of the first twenty years of the project.

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REVPAR OF ALL NEW CHAIN HOTELS OPENED 1990-1994 INCLUDES THEIR LOCAL MARKET AVERAGES (SAME ZIP-CODES)

Opened 1990 Year I Year II Year III Year IV Year V Year VI 9 Chain hotels 41.97 49.45 54.76 54.17 59.45 66.16 Local Market Average 35.38 37.40 39.72 39.71 43.31 48.87 Index New Chain/Market 119 132 138 136 137 135 (Peak) Opened 1991 Year I Year II Year III Year IV Year V Year VI 8 Chain hotels 32.06 37.95 41.49 44.18 46.26 Local Market Average 29.96 31.26 32.36 33.04 33.70 est Index New Chain/Market 107 121 128 134 137 135 (Peak) Above assumes Year VI index decline of 1.67%

Opened 1992 Year I Year II Year III Year IV Year V Year VI 7 Chain hotels 25.07 36.53 39.76 41.74 Local Market Average 30.60 33.62 34.36 37.49 est est Index New Chain/Market 82 109 116 111 111 109 (Peak)

Above assumes Year V is "flat" and Year VI index declines by 1.67%

Opened 1993 Year I Year II Year III Year IV Year V Year VI 16 Chain hotels 24.51 29.15 33.19 Local Market Average 30.70 31.88 35.27 est est est Index New Chain/Market 80 91 94 94 93 91 (Peak) (Peak)

Above assumes Year III and IV are Peak, and Year V and Year VI index declines by 1.67% annually

Opened 1994 Year I Year II Year III Year IV Year V Year VI 29 Chain hotels 30.40 35.97 Local Market Average 38.68 41.29 est est est est Index New Chain/Market 79 87 90 89 87 86

Above assumes Year III and Year IV Peak equals Year II plus 4%, as above, and Year V and Year VI index declines by 1.67% annually

Peak COMBINED INDICES Year I Year II Year III Year IV Year V Year VI Average of Raw Data 93 108 113 113 113 111 Adjusted 100 over 20 years 92 107 112 112 112 110

After Year V, Declines Average 1.67% Per Annum In the sixth year and thereafter, the twenty-year average REVPAR index is diminished at a rate of 1.67% per annum in order to reflect aging and the normal life-cycle of a hotel.

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This pattern of declining performance with property aging is based on major studies of economic life-cycle patterns, studies which were conducted on a census of all 25,000 Texas rooms built between 1980 and 1982 (study published in September 1994 issues of MarketShare and the October 1994 issue of Hotel & Motel Management). These Source Strategies studies confirm a similar, major study conducted in 1982 at the Holiday corporation on 160 company-owned and company- operated hotels.

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EXHIBIT VII

CapEx: A STUDY OF CAPITAL EXPENDITURES IN THE US HOTEL INDUSTRY

THE FOLLOWING IS A SUMMARY OF THE INTERNATIONAL SOCIETY OF HOSPITALITY CONSULTANTS' 2000 "CAPEX STUDY, A STUDY OF CAPITAL EXPENDITURES IN THE US HOTEL INDUSTRY" AS IT APPLIES TO LIMITED SERVICE PROPERTIES: The objective of our historical analysis in CapEx 2000 was to determine what has been spent in the past to maintain a hotel in good, competitive condition. Hotel owners and management companies were contacted to provide data for the study.

Definition of CapEx "Capital Expenditure" is defined as: investments of cash or the creation of liability to acquire or improve an asset, e.g., land, buildings, building additions, site improvements, machinery, equipment; Comparatively, the "reserve for replacement" for a hotel asset has been narrowly defined as the funds set aside for the periodic replacement of furniture, fixtures and equipment (FF&E). The reserve was not contemplated to fund the replacement of major building components, such as roofs, elevators, and chillers.

For this study the term has been defined as: the cost of replacing worn out FF&E, as well as the cost of; - updating design and decor - curing functional and economic obsolescence... - complying with franchisors' brand requirements - technology improvements - product change to meet market demands - adhering to government regulatory requirements - replacing all short and long lived building components due to wear and tear

Although many equity investors frequently argue against the necessity of a reserve, particularly if the investor does not plan to hold the property for greater than five years, the requirement for and amount of reserves are typically contractual issues between ownership, lender, manager, and/or franchisor/franchisee.

Significant Findings of CapEx 2000 The average amount spent per year by limited-service hotels in the survey was determined to be 5.5% of total revenue for the time period covered by CapEx 2000 (1988-1998). As these limited-service hotels have matured, CapEx has increased, underscoring one of our principal findings that CapEx requirements increase as a hotel ages. CapEx Spending is highly dependent upon a hotel's point in its life cycle. The following chart shows the range of CapEx spending (as a percentage of

Page 86 of 97 total revenues) over a 25-year time period; the table following the chart identifies the specific ranges of CapEx spending as a% of total revenues by year.

Percentage Range of CapEx Spending by Year Year Range Minimum Range Maximum 1 1.65% 4.51% 2 1.72% 3.29% 3 1.48% 3.15% 4 1.31% 3.64% 5 3.21% 6.23% 6 4.80% 6.77% 7 4.15% 5.85% 8 3.60% 5.23% 9 4.83% 7.01% 10 8.43% 11.94% 11 4.66% 6.55% 12 5.42% 9.36% 13 4.66% 9.93% 14 4.66% 7.82% 15 3.35% 5.72% 16 5.12% 12.40% 17 5.10% 10.50% 18 2.51% 9.72% 19 2.93% 8.10% 20 2.37% 8.68% 21 2.37% 6.99% 22 3.20% 6.84% 23 5.07% 16.98% 24 3.45% 12.88% 25 5.05% 10.24%

As the data indicates, CapEx spending increases over time for all (U.S.) hotels, with large differences in both the level of CapEx spending and timing across different hotels. The data illustrates that, over time, the minimum and maximum levels of CapEx spending generally widens as a hotel increases in age.

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For limited-service hotels, the first major increase in spending occurs in the sixth year, which likely represents the replacement of soft goods. The first major spike occurs in year 10, which is likely to be the result of a rooms and corridors renovation. Smaller spikes in CapEx spending occur in the following years, with the next major spending spike occurring in year 17, which is likely building and some mechanical renovation and replacement.

The following series of tables illustrates limited-service CapEx spending levels in various demographic categories:

CapEx 2000- Limited Service Hotels by Location

Average Capex/Total CapEx per Location Age Revenue Room per Year All Properties 12.0 yrs 5.5% $1,111 Airport 9.8 yrs 5.4% $1,268 Urban 15.2 yrs 4.3% $ 820 Small City/Hwy 9.2 yrs 5.1% $ 773 Suburban 10.5 yrs 5.7% $1,172

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CapEx 2000- Limited Service Hotels by Average Daily Rate

Average Average Capex/Total CapEx per Daily Rate Age Revenue Room per Year All Properties 12.0 yrs 5.5% $1,111 < $60 12.7 yrs 5.0% $ 687 $60-$80 12.5 yrs 6.3% $1,134 > $80 12.0 yrs 5.3% $1,570

CapEx 2000- Limited Service Hotels by Property Size

Average Capex/Total CapEx per Property Size Age Revenue Room per Year All Properties 12.0 yrs 5.5% $1,111 < 100 rooms 8.7 yrs 3.3% $ 475 100-150 rooms 10.3 yrs 5.4% $1,107 > 150 rooms 20.0 yrs 6.9% $1,360

-CapEx 2000- Limited Service Hotels by Age of Property

Average Capex/Total CapEx per Daily Rate Revenue Room per Year All Properties 5.5% $1,111 > 15 yrs old 6.5% $1,372 5-15 yrs old 4.8% $ 897 < 5 yrs old 3.0% $ 547

Overall, the study details the varying levels of capital required to keep a hotel competitive in its life cycle. Historically, many operators have held no more than 3-4% of gross revenues in reserve, a level which may be sufficient for FF&E replacement, but is woefully inadequate for other required expenditures.16

16 Data compiled and organized from the CapEx report of the International Society of Hospitality Consultants, copyright 2000.

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Know your competition

Source Strategies, Inc. maintains the most accurate and comprehensive Texas hotel database, covering 98% of all hotels. More importantly, Source is the only provider of individual, hotel-by-hotel data, trends and financial projections.

Source data is based on the Texas State Comptroller audited tax files for the period of 1980 to the present, making it more accurate and complete than voluntary samples, in our opinion. Since 1988, Source has been under contract to the Office of the Governor, Economic Development and Tourism to supply its hotel research data and analysis. Services detailed below and at www.SourceStrategies.org.

 The Texas Hotel Performance Factbook, puts each and every hotel and motel’s Revenue and Occupancy Numbers on your desk, hotel-by-hotel, and compared to last year, then summarized by zip-code, by city and by metro area. Factbooks are available with three month data and with 12-month data.  Financial Feasibility Studies. Over 150 hotel feasibility studies are developed annually, far more than by any other consultancy. Many of Texas’ lenders insist on a Source study because of the proprietary methodology and high level of accurate prediction, speed and cost efficiency.  The Hotel Brand Report newsletter is published quarterly. It is the only industry source that tracks how each major brand is performing, as well as product and price segments. Readers learn which are winning!  Appraiser’s Packages. Five and ten year market and property histories give a comprehensive view, by selected geography and for individual hotels. As both market and individual property trends become very clear, so do resulting hotel appraisals.  Litigation Support and Data Analysis. Almost any question can be analyzed and proved up with the powerful Source database.

Endorsed by the Texas Hotel & Lodging Association

Contacts us at (210) 734-3434 e-mail Address Bruce H. Walker, President [email protected] Douglas W. Sutton, Executive Vice President [email protected] Todd A. Walker, Senior Vice President [email protected] Amanda B Sykes, Manager Administration [email protected]

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BRUCE H. WALKER

1987-Present: Source Strategies, Inc. Founder and President of consultancy in research, strategy and marketing, specializing in lodging. Practice includes 120+ hotel feasibility studies annually for individual developers. Other clients include Office of the Governor, Texas Economic Development & Tourism, Banks, major accounting firms, appraisers and attorneys. Database of 4,100+ Texas hotel/motels created and maintained continuously. Testify regularly. Publisher and writer of The Hotel Brand Report and the Texas Hotel Performance Factbook.

1986-1987: La Quinta Motor Inns, Inc. Senior Vice President, Marketing. Repositioned brand with the ad campaign "Just Right Overnight," new corporate logo, extensive couponing and premium-quality king rooms.

1984-1985: Portel Videotex Network LP. President. Home-banking, home-shopping start-up.

1976-1983: Holiday Corporation. Hotel Group Vice President, Marketing (1975-79), President of subsidiaries (1979-82), Senior Vice President, Central and Strategic Planning(1980-83). Started the first hotel frequent traveler's program, and the classic ad campaign, "The Best Surprise is No Surprise." Developed and launched the Hi-Net satellite reception network to 350 Holiday Inn hotels, offering HBO, CNN and ESPN. Created prototypes and strategic plans for new chains Holiday Inns and Embassy Suites, and recommended sale of Holiday Inn chain (sold 1989 to Bass PLC).

1969-1975: Howard Johnson Company. Assistant to the President, Director Disney World Development, Director Restaurant Marketing.

1964-1968: Procter & Gamble Company. International Brand Manager. Took Scope mouthwash, Secret deodorant and Crisco Oil into Canada, Crest toothpaste and Tempo deodorant into the United Kingdom.

EDUCATION 1957-61 Amherst College. BA, Economics. 1961-63 Harvard Business School. MBA. Ongoing seminars throughout career include strategic studies with the Boston Consulting Group. Appraisal Institute Hotel/Motel Valuation and Investment Seminar, April 1992

PUBLICATIONS AND SEMINARS: * The Cornell Quarterly, October 1993, "What's Ahead: A Strategic Look at Lodging Trends." * Hotel & Motel Management, October 1994, " Hoteliers Should Examine Hotels' Life Cycles." * Two articles per year for Hotelexecutive.com, the authoritative, on-line hotel magazine. * The Hotel Brand Report newsletter, written and published quarterly since 1987. Over 80 issues. * Speeches to Urban Land Institute, Appraisal Institute, Real Estate Counseling Group of America and O’Connor & Associates.

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DOUGLAS W. SUTTON

1996- Present Source Strategies, Inc. Executive Vice president specializing in development of hotel feasibility studies, database software development and maintenance, and developing special studies and articles published in the Hotel Brand Report newsletter.

Completed over 300 Financial Feasibility studies successfully, encompassing over thirty-two different brands in Texas, New Mexico, Louisiana, Kansas, Colorado and Oklahoma. Studies include major and local market assessments and projections, proposed hotel’s revenue generation and ten-year cash flow forecasts and the projection of return on capital investment. Major contributor to Source Strategies in its achieving market status as the largest supplier of hotel financial feasibilities to Texas’ lending institutions.

Responsible for creating and programming database of over 4,000 Texas hotels and motels.

Contributing analyst and writer to Hotel Brand Report newsletter and the Texas Hotel Performance Factbook, including ‘Hot Brands & Dying Brands’ (2006), ‘Development Since 9/11: Winners & Losers’ (2005), ‘Higher Priced Brands in Turmoil, Mid-Priced Brands Prosper’ (2004).

Provides litigation support, analysis and strategy for hotel litigation and testimony.

1994-1996 University Health System, San Antonio Texas. Decision Support Analyst.

Provided data analysis support to all levels of hospital management. Prepared numerous medical studies, grant support documents, cost-analysis studies, staffing studies, and other decision support analysis. Developed a number of vertical software applications to allow key departments to track and study their individual patient populations.

1987-1994 Systems IV Professionals, Inc., San Antonio. President.

Consulting firm specializing in data analysis and customized software development utilizing FOCUS database software. Created major applications, including a long distance network analysis system for a major carrier; system allowed the carrier to determine the effect of various network changes before implementation to facilitate selection of the most cost efficient network possible.

1983-1987 United States Air Force. Captain and Information Services Officer, Directorate of Special Weapons, Kelly AFB, Texas.

Duties included writing and maintaining software to manage the Air Force's Nuclear weapons arsenal, tracking nuclear component parts and supplies, and acquisition and installation of major secure computer network. EDUCATION 1979-83 Troy State University, Troy Alabama, BS in Computer and Information Science. **********

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TODD ANDERSON WALKER

1997-Present Source Strategies, Inc. Senior Vice president, Business Operations.

Major contributor to Source Strategies in its achieving market status as the largest supplier of hotel financial feasibilities to Texas’ lending institutions. Completed over 400 Financial Feasibility studies successfully, encompassing over thirty different brands now operating successfully in Texas, New Mexico, Louisiana, Kansas, Colorado and Oklahoma. Studies include major and local market assessments and projections, proposed hotel’s revenue generation, ten-year cash flow forecasts and the projection of return on capital investment. Key contributor to research studies of convention hotel and convention center performance.

Responsible for sales and operation of Source Strategies’ publications, including The Texas Hotel Performance Factbook and The Hotel Brand Report Newsletter. Manage Accounts Receivables, billing and collections.

Contributes as analyst, writer and editor to Hotel Brand Report newsletter and the Texas Hotel Performance Factbook, including ‘Results from 1995, 2004, & 2005: Limited Service Dominates’ (2005), ‘First Quarter 2004, The Best Increase Since the Year 2000’ (2004), ‘Age Matters, Size Matters’ (2005).

Provides litigation support, analysis and strategy for hotel litigation and testimony.

1997 The Toronto Globe & Mail Newspaper. Assistant to the Editor of Business Publications. The Globe & Mail is Canada's national newspaper, a division of Thomson Publishing Corporation. Wrote business articles and edited publications. Edited InfoGlobe from April to October 1997.

1994-1997 Source Strategies, Inc., San Antonio. Senior Consultant.

Developed hotel feasibility studies. Completed over 60 studies for new hotels and motels throughout Texas. Circulation Director for Brand Report newsletter and the Texas Hotel Performance Factbook. Generated renewals at 85% rate.

1989-1994 Intern at Source Strategies, Inc. during university education.

EDUCATION

1989-94 University of Toronto, Ontario, Canada. Bachelor of Arts with Honors in English and History.

**********

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2001 - 2005 FINANCIAL FEASIBILITY STUDIES

PARTIAL LISTING

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AmeriSuites Candlewood Suites Fairfield Inn by Marriott Austin NW San Antonio Livingston College Station Irving DFW Laredo Denton Friendswood Fort Worth Stockyards San Antonio Westheimer Holiday Inn San Antonio San Antonio Toyota Austin Pecan Park Waco Houston Austin Ben White Temple Cedar Park Baymont Inn Wichita Falls Corpus Christi San Antonio InterContinental Comfort Inn, Del Rio New Braunfels Comfort Suites Houston Best Value Fredericksburg Gainesville San Antonio Navasota Greenville San Antonio SW Pampa Hillsboro San Antonio Pharr San Antonio InterContinental Waller Bay City San Antonio Beltway 8 College Station Greenville Best Western Inn & Suites Copperas Cove Nipomo, CA Addison Deer Park Rosenberg Andrews Elmendorf Seguin Big Spring Georgetown Schertz Bridgeport San Antonio InterContinental South Austin Cameron Hobbs, NM Texarkana Cleveland Longview Waxahatchie Copperas Cove Pasadena Dickinson Quanah Hawthorn Suites Ltd Franklin San Antonio Marble Falls Halletsville San Antonio Downtown La Grange Sugarland Hilton Hotel Lake Dallas Longview Fort Worth Convention Center Laredo Webster Levelland Country Inn & Suites Hilton Garden Inn Lumberton Arlington Amarillo Pearsall Corpus Christi Pilot Point Econo Lodge Granbury Rosenberg Dallas San Antonio Beltway 8 Schulenberg Lake Charles Killeen Temple Port Arthur McAllen Tomball Texas City New Braunfels Wakeeney, KS Temple Embassy Suites Budget Host Laredo Fort Worth Lubbock

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Feasibilities Continued… Independent Hotels Waco Crescent Hotel, New Orleans Radisson Inn & Suites Holiday Express Dacoma Inn San Antonio Amarillo Hotel & Suites Executive Inn Tyler Allen Fairmont Hotel San Antonio Red Roof Inn Alvarado First Choice Inn Grand Prairie San Antonio InterContinental Amarillo Garden Inn San Antonio Pharr Atlanta Harker Heights Inn Stafford Austin Steward Mansion Houston Temple Buda Killeen Inn Cameron Laredo Inn Courtyard by Marriott Center Luxury Suites Canton San Antonio Cleburn Palms Hotel South Padre South Padre Island Corsicanna Palace Inn San Antonio Desoto Passport San Antonio Studio 6 Houston San Antonio Inn & Suites Bay City Gatesville Wylie Inn Tyler La Grange Winnie La Porte Hotel Indigo Lampasas Alamo Plaza San Antonio Super 8 Manvel Austin East Pearland La Quinta Inn & Suites San Antonio Orange Boerne Conroe San Antonio I-10 West Cedar Hill Copperas Cove San Antonio Toyota Gun Barrel City Fort Stockton Houston Keene Humble Sherman Palestine Killeen Texarkana Pasadena Livingston Wichita Falls Pearland Pharr Rockwall Plainview Holiday Inn San Antonio Rosenberg Austin (Select) San Antonio I-10W San Antonio South Dallas Downtown San Antonio Toyota Frisco Seguin Townplace Suites San Antonio Tomball Killeen Travelodge Homewood Suites Marriott Hotel Killeen San Antonio Greenspoint Area Dallas Convention Center San Antonio Norman, OK Colorado Springs CC Marble Falls Wingate Inn & Suites McAllen Quality Inn, McAllen New Braunfels Quality Suites San Antonio Waco Katy Wyndham Wichita Falls San Antonio East Wyndham Savoy San Antonio

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CONSULTING STUDIES, DATA AND LITIGATION SUPPORT

1. Contracted by the Texas’ Governors Office of Economic Development, Tourism Division since 1988 to maintain the industry database of hotel performance. Source Strategies is the sole supplier to the Governor’s Office of lodging market statistics and analysis in reports used to assess Texas tourism promotion efforts and to aid in marketing Texas.

2. Provided over 1,500 detailed five-year custom local hotel market histories to MAI appraiser clients.

3. Developed numerous studies of subject hotel(s) to determine their historical, competitive REVPAR performance versus the market average. This unique analysis technique highlights trends and deviations in performance, regardless of market movement; a REVPAR index versus market average shows how well a property has performed. By limiting study to a single variable, a truly scientific conclusion can be made as to cause and effect.

Deviations from trend can be related to specific, causal events such as management problems or outside influence (e.g. new highway construction, brand change, new competition); if there is no effect from an event, studies confirm the absence of any impact). If there is an effect, the degree is measurable and apparent. This study approach is among Source's most important work, frequently the basis for expert witness testimony by Source's principal Bruce Walker.

Examples of major studies include: a) the (lack of) induced demand from opening every large downtown hotel in Texas, 1980 through 2003 (see www.sourcestrategies.org for full study); b) the impact of adding a second luxury hotel of the same brand in a local market, or removing a hotel of the same name, on the performance of the pre-existing property; 3) Studies to separate and quantify hotel Business Value - and the separate Real Estate Value - (for tax assessment disputes). The most important study here was to determine the average revenue effect of adding or removing the "Marriott Hotel" name to numerous hotel properties from 1980 through 1995. Source Strategies has produced values for the Marriott Austin hotel and the Marriott Rivercenter hotel San Antonio, both with- and without- the Marriott name for real property tax disputes. Clients include USAA and the Bexar County Appraisal District.

Sample litigation clients have included the Texas Department of Transportation (through Texas Attorney General's Office) for condemnation valuation and damage cases, including: the Days Inn San Antonio I-45N, Motel 6 Ft. Worth, Holiday Inn San Antonio I-45N, La Quinta San Antonio I-45N, Holiday Inn Lubbock, and Austin Hawthorn Suites South, Chariot Inn, Malibu Grand Prix), Dallas Sheraton, San Antonio Holiday Select Airport, Coit Towers Hotel Dallas, Erie County PA Hotel Owners vs. Convention Authority, Bandera Motel San Antonio. Other litigating clients have included USAA, Bexar County Appraisal District, Capital Income Properties (Hilton Nassau Bay, Austin Marriott North), American Liberty, Dosani Brenham Inn, Wes-Tex Management El Campo. Hospitality (Homeplace Inn), Ramada Bannister Austin (Lock manufacturer), Rodeway Inn I-10 West (bank's non-funding of a committed loan), Homer J. Rader, and Siu Ft Worth and San Antonio Inn (bankruptcies), Holiday/Clarion (loss due to change of brand), United Fire (Wingate McAllen performance due to construction issues), Hyatt Regency San Antonio (arbitration re: introduction of second Hyatt in CVB).

4. Numerous studies to determine the effect on revenues and cash flow of brand name alternatives, whether in new builds or in changing to- or from- a brand name. This technique is used extensively in feasibility work to predict revenue performance of new hotel projects under various brand name alternatives. 5. Represented Host Marriott before Real Estate Tax Appeal Board. 6. Drafted national lending guidelines for Heller Small Business Finance for lodging projects under $5 million. 7. Presentations to bank lending committees to explain the dynamic economics of the lodging industry, particularly the effect of market demand and supply, equilibrium occupancy, cost structures, and the effect of brand name on REVPAR and ROIC. 8. Analysis of alternative markets to determine their potential for new lodging: alternative metro areas, alternative sites, and strategically, for an expanding chain.

9. Consumer intercept and secondary data studies, including the effect of a potential name change, the effect of new hotel.

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Methodology of Texas Hotel/Motel Reports

Texas Hotel/Motel Quarterly Reports are prepared on a custom basis for private clients, including Office of the Governor, Texas Economic Development & Tourism, and the Texas Attorney General. Reports are prepared by Source Strategies Inc. of San Antonio, Texas, based on Texas State Comptroller revenue records and independent research. Data sources include the following: Room Revenues: State of Texas Comptroller records are the source of taxable room revenues for all properties. All properties exceeding $18,000 in the current quarter are included; the below-$18,000 units result in 2% of the total state revenues being initially excluded from the Source Strategies database. As a result, the database covers 98% of Texas.

Gross room revenues (including Non-taxable) were reported to the Comptroller starting in the third quarter of 1990. To account for the missing non-taxable revenues prior to the third quarter of 1990, Source Strategies increases each individual property's taxable-only, reported revenues by variable factors averaging 12% to reflect this untaxed volume (e.g. government business, over 30-day stays, charitable and educational purchases). "Apartment-type" revenues are typically not reflected.

Starting in the third quarter of 1990, hotels and motels were required by the Texas Comptroller to report both taxable and gross room revenues. Approximately 80% of properties usually comply, allowing the development of adjustment factors for all hotels and motels, even if only taxable revenues are reported. For example, taxable room revenues are adjusted accordingly higher if a hotel reports only taxable revenues (i.e. where taxable equals gross room revenues).

Properties that make no report or only partial reports are estimated based on the past five quarter trends. If and when they subsequently report accurately, their actual revenues 'overwrite' our estimates.

Room Counts: these are checked annually in chain directories and the Texas American Automobile Association Tour Book; properties checked account for approximately 80% of revenues. For independent properties too small to be listed, the room counts reported to the state are used (unless they appear unreasonable; if so, a telephone contact is made).

As a result, the 'CHAIN' occupancies and room counts appear to be very close to 'actual', while independent room counts could be slightly overstated. Reports are split into CHAIN and INDEPENDENT categories.

Average Daily Rates are estimated with the aid of financial reports, appraisers, private S.S.I. surveys, chain and AAA directories and another reliable industry database.

Roomnights sold are derived from the above revenues, divided by Average Daily Rates. Roomnights available are calculated from Room Counts (times days in the period).

Occupancy is calculated from roomnights sold and roomnights available. All occupancy figures reported represent fully weighted averages, as calculations are always made after sub-totaling or totaling roomnights sold and roomnights available.

"CHAINS" are defined as one of the "Top 70+" brands, and include the following names: Four Seasons, Gaylord, Westin, W, Hilton, Hyatt, Inter-Continental, Marriott, Omni, Renaissance, Wyndham. Also, Embassy, Homewood, Residence, Staybridge, Clarion, Courtyard, Hampton Inn & Suites, Indigo, Doubletree, Hilton Garden, Holiday Inn, Radisson, Sheraton. AmeriSuites, Bradford, Candlewood, Comfort Suites, Hawthorn, Quality Suites, SpringHill, TownPlace, Amerihost, Baymont, Best Western, Comfort Inn, Country Inn, Drury, Fairfield, Hampton, Holiday Express, La Quinta, Wingate. Budget Suites, Extended Stay, Homestead Village, Intown, Value Place, Studio Plus, Studio 6, Best Value, Days, Econo Lodge, Howard Johnson, Microtel, Motel 6, Quality Inn, Ramada, Red Roof, Super 8.

Accuracy: Room counts and Room Revenues are within 2%. On an overall basis, the change in average daily rates reported by Source Strategies Inc. are within a few tenths of one-percent of PKF Trends, another private research firm that gets financial reports from about 30% of all hotel/motels in Texas and then publishes aggregated results by metro and smaller areas.