Midscale – Fairfield Inn/Suites, Holiday Inn, Clarion, Hampton Inn/Suites, Best Western Plus, Country Inn & Suites

U.S. Hotel Industry Performance HBI Annual Conference

February 17, 2017 Jeff Higley VP/Editorial Director [email protected] @jeffhigley1

© 2016 STR, Inc. All Rights Reserved. Any reprint, use or republication of all or a part of this presentation without the prior written approval of STR, Inc. or STR Global, Ltd. trading as STR (collectively “STR”) is strictly prohibited. Any such reproduction shall specifically credit STR as the source. This presentation is based on data collected by STR. No strategic advice or marketing recommendation is intended or implied. 1 www.hotelnewsnow.com Data Dashboard>View All Data Presentations

% Change 29 Yr. Avg. Change

• Room Supply 1.6% +1.8% • Room Demand 1.7% +2.0% • Occupancy 66.7% 0.1% +0.2% • A.D.R. $124 3.1% +3.1% • RevPAR $83 3.2% +3.3% • Room Revenue 4.8% +5.2%

December 2016 YTD, Total US Results

Total US YTD: +3.2% NYC: - 1.8% Miami: - 5.5% Houston: -12.4%

Total US excluding NYC, Miami & Houston: +3.8%

*RevPAR % Change December 2016 YTD

8 7.7

0 -0.8

-4 Supply % Change -4.7 Demand % Change -7.1 -8 1990 2000 2010

7.5 6.8 5 3.1

0.1 0

-3.4 -5 Occ % Change ADR % Change -6.7

-10 -9.7 1990 2000 2010

2 42 Months 0 24 Months -2

-4 1990 1992 1994 1996 1998

Total U.S., ADR & OCC % Change, 12 MMA 1/1990 – 12/1999 © 2016 STR. All Rights Reserved. 9 RevPAR Growth: Slowing Down After 6 Years Of Growth 15 10 5 0 80 Months 31 Mo 56 Months 82 Months -5 -10 -15 -20 -25 1990 2000 2010

0 2015 2016

• Luxury – Fairmont, Four Seasons, Ritz Carlton, JW Marriott

• Upper Upscale – Sheraton, Embassy Suites, Hyatt, Marriott

• Upscale – Radisson, Hilton Garden Inn, Residence Inn, Springhill Suites, Homewood Suites, Courtyard, Best Western Premier

• Upper Midscale – Fairfield Inn/Suites, Holiday Inn, Clarion, Hampton Inn/Suites, Best Western Plus, Country Inn & Suites

• Midscale – Best Western, Candlewood Suites, Quality Inn/Suites, La Quinta, Sleep Inn, Red Lion

• Economy – Americas Best Value Inn, Country Hearth Inn, Jameson Inn, Extended Stay America, Motel 6, Red Roof, Days Inn, Microtel • Complete list: www.HotelNewsNow.com/chainscales

13 Scales: Supply Growth Outpaces Demand Growth For Most 5.6 Supply % Change 5.0 Demand % Change

2.8 2.4 2.1 1.9 1.6 1.4 1.2 1.1 1.0 0.3 0.2

-0.1

Luxury Upper Upscale Upper Midscale Economy Independents Upscale Midscale

75.2 74.9 74.2 74.3 73.8 74.3 2016 2015

67.4 67.5

62.3 61.8 59.4 59.4 57.9 58.1

Luxury Upper Upscale Upper Midscale Economy Independents Upscale Midscale

5 Supply Demand 4 2.9 3.0 3 1.8 1.6 2 1.4 1.5 1.4 1.5 1.0 1 0.8 0.9 0.4 0 -1 Urban Suburban Airport Interstate Resort Small Metro

*Supply / Demand % Change, by Location, December 2016 YTD

4 3.7 3.4 Occupancy ADR 2.9 3 2.8 1.9 2.1 2 0.9 1 0.1 0.2 0.1 0 -0.2 -1 -1.1 -2 Urban Suburban Airport Interstate Resort Small Metro

Occupancy / ADR Percent Change; December 2016 YTD

6 5.4 RevPAR Room Revenue 5.0 4.7 5 4.5 4.2 4 3.9 3.8 3.3 3.1 3 2.5 2.1 2 0.9 1

0 Urban Suburban Airport Interstate Resort Small Metro RevPAR/ Room Revenue Percent Change; December 2016 YTD

2% Demand % Change 1% ADR % Change 0% Jan-14 Jan-15 Jan-16

2% Jewish Holiday Shift

-1%

-2% Jan-14 Jan-15 Jan-16

Market OCC % ADR % Change Los Angeles/Long Beach, CA 81.3 8.5 Nashville, TN 74.8 6.0 Atlanta, GA 69.9 5.8 Tampa/St Petersburg, FL 71.6 5.6 Denver, CO 73.7 5.5

Phoenix, AZ 67.2 1.8 Chicago, IL 69.1 1.4 New Orleans, LA 68.8 0.0 New York, NY 85.9 -2.5 Miami/Hialeah, FL 75.9 -2.9 Houston, TX 62.3 -3.6 * December 2016 YTD ADR % Change in Top 25: 5 Best / 5 Worst Performing ADR % Markets © 2016 STR. All Rights Reserved. 23 NYC RevPAR: Mostly Bad. New Supply Looming Large 8.8

3.2 3.7

-1.5 -1.7 -2.4 -4.0 -3.7 -4.5 -4.9 -6.5 -7.5

Jan Feb Mar Apr May Jun July Aug Sept Oct Nov Dec

$/gal 8.0 % $100 6.0 $90 4.0 $80 2.0 $70 0.0 -2.0 $60 -4.0 $50 -6.0 Crude Oil Futures Price / Barrel (LHS) $40 -8.0 Demand % Change (RHS) $30 -10.0 2014 2015 2016 *Monthly Oil price Future / Barrel vs. Houston, TX Room Demand % Change 1/2014 – 12/2016 http://www.investing.com/commodities/crude-oil © 2016 STR. All Rights Reserved. 25

Pipeline

Phase 2016 2015 % Change

In Construction 187 140 33%

Final Planning 198 180 10% Planning 174 147 17% Under Contract 560 469 19%

*Total US Pipeline, by Phase, ‘000s Rooms, December 2015 and 2016

250

200 24K

150 High: Dec ‘07 100 Dec‘16 Thousands 211K 187K 50 Low: May ‘11 0 50K 2006 2008 2010 2012 2014 2016

61.6 60.0

65%

23.6 22.8

7.5 8.8 2.6

Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Unaffiliated

*US Pipeline, Rooms Under Construction , ‘000s Rooms, by Scale, December 2016

© 2016 STR. All Rights Reserved. 29 Construction In Top 26 Markets: 23 With 2%+ Of Supply Market Rooms U/C % Of Existing Norfolk/Virginia Beach, VA 456 1% Orlando, FL 1,552 1% Oahu Island, HI 410 1% Minneapolis/St Paul, MN-WI 763 2% St Louis, MO-IL 876 2% Las Vegas, NV 3,950 2% Chicago, IL 3,212 3% New Orleans, LA 1,211 3% Phoenix, AZ 1,962 3% San Francisco/San Mateo, CA 1,825 4% Atlanta, GA 3,421 4% Washington, DC-MD-VA 4,069 4% Detroit, MI 1,662 4% San Diego, CA 2,371 4% Anaheim/Santa Ana, CA 2,533 4% Tampa/St Petersburg, FL 2,114 5% Boston, MA 2,764 5% Houston, TX 4,664 5% Los Angeles/Long Beach, CA 6,069 6% Philadelphia, PA-NJ 3,004 6% Miami/Hialeah, FL 3,579 7% Nashville, TN 3,401 9% Dallas, TX 7,101 9% Denver, CO 4,596 10% Seattle, WA 5,219 12% New York, NY 15,333 13% 30 *US Pipeline, Top 26 Markets, U/C Rooms as % of Existing Supply, December 2016 © 2016 STR. All Rights Reserved. Top 26 Markets Have 47% Of U/C Rooms In Construction Final Planning 121.5 Planning 105.0 98.8 88.1 77.2 69.5

Top 26 Markets Rest of the US

$35

$29.8 $30 $26.3 $25 $22.8 $23.4

$19.4

$20 $18.6

$16.8 Billions $15 $13.2 $13.1 $12.5 $10.4 $9.5 $10 $6.9 $5.1 $5 $3.5 $3.3 $3.1

$0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

$300

$250 $251 $238 $219 $200 $189 $190 $181

$174

$150 $152

$124 $125

Thousands $122 $100 $100 $94 $87 $87 $76 $72 $50

$0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

$300

$277 $257 $250 $249

$221 $217 $200 $206 $203

$187

$158 $150 $143

$133 $134 Thousands $110 $102 $100 $97 $101 $96

$50

$0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Easter: From March to April (affects Q1/Q2) Jewish Holidays: From October to September (affects Q3/Q4)

January had two fewer Weekend days (Net -)

Notable Market Level Events / Comps: Super Bowl: From San Francisco To Houston San Francisco: Super Bowl Shift and Moscone Center Renovation Los Angeles: Porter Ranch Gas Leak Washington, D.C.: Inauguration (January) East Tennessee: Wild Fires (November) East Coast: Hurricane Matthew (October)

Outlook

2017 2018 Forecast Forecast

Supply 2.0% 2.2%

Demand 1.7% 2.0%

Occupancy -0.3% -0.2%

ADR 2.8% 2.8%

RevPAR 2.5% 2.6%

2017 Year End Outlook

Occupancy ADR RevPAR Chain Scale (% chg) (% chg) (% chg)

Luxury -0.4% 2.5% 2.1% Upper Upscale -0.2% 2.5% 2.3% Upscale -1.1% 2.5% 1.3% Upper Midscale -0.7% 2.3% 1.6% Midscale 0.1% 2.4% 2.5% Economy 0.0% 2.7% 2.7% Independent -0.3% 3.0% 2.7% Total United States -0.3% 2.8% 2.5%

2018 Year End Outlook

Occupancy ADR RevPAR Chain Scale (% chg) (% chg) (% chg)

Luxury -0.2% 3.0% 2.8% Upper Upscale -0.1% 2.8% 2.7% Upscale -0.7% 2.5% 1.7% Upper Midscale -0.6% 2.5% 1.9% Midscale -0.2% 2.5% 2.2% Economy -0.1% 2.3% 2.3% Independent -0.2% 2.8% 2.7% Total United States -0.2% 2.8% 2.6%

© 2016 STR. All Rights Reserved. 40 2017 Year End RevPAR Forecast -5% to 0% 0% to 5% 5% to 10% Houston, TX Anaheim-Santa Ana, CA Miami-Hialeah, FL Atlanta, GA New York, NY Boston, MA Chicago, IL Dallas, TX Denver, CO Detroit, MI Los Angeles-Long Beach, CA

Minneapolis-St. Paul, MN-WI

Nashville, TN New Orleans, LA Norfolk-Virginia Beach, VA Oahu Island, HI Orlando, FL Philadelphia, PA-NJ Top 25 US Phoenix, AZ Markets, Nov San Diego, CA 2016 Forecast (Markets sorted San Francisco/San Mateo, CA alphabetically) Seattle, WA 41 St. Louis, MO-IL © 2016 STR. All Rights Reserved. Tampa, FL Washington, D.C. Odds and Ends …

12/2016

© 2016 STR. All Rights Reserved. 43 World’s Largest Hotel Companies … Scale Matters! Parent Company Properties Rooms Marriott International 5,890 115,2034 Hilton Worldwide 4,819 785,087 InterContinental Hotels Group 4,998 721,816

Wyndham Worldwide 7,707 675,552 Accor 3,886 526,729 Choice Hotels International 6,417 510,551 Best Western Hotels & Resorts 3,728 295,872

Carlson Hospitality Company 1,135 178,576 Hyatt Hotels Corp. 651 170,053

* Joe Gebbia/Brian Chesky

Hotel +2.60mm +3%

Supply Change (‘14-’16) Airbnb +2.68mm +127%

Presentation is available for download.

To view this presentation, click “STR Data Presentations” from the drop-down menu on www.HotelNewsNow.com.