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the hilton resort ixia,

HVS HODGES WARD ELLIOTT the hilton rhodes resort ixia, greece HVS HODGES WARD ELLIOTT { executive summary }

INTRODUCTION HVS Hodges Ward Elliott has been exclusively commissioned to off er for sale the Hilton Rhodes Resort. The hotel contains 402 rooms and is one of the leading 5- resort properties on the Island of Rhodes.

HVS HODGES WARD ELLIOTT 1 the hilton rhodes resort ixia, greece

• The Hilton Rhodes Resort is a 402-room fi ve-star hotel with a beach-front location, situated in Ixia, Rhodes. The property is one of the premier resort hotels on the island.

• The hotel opened in 1993. It benefi ts from extensive conference and leisure facilities, as well as large guestrooms (standard rooms of 32 m2). The property has a total built area of approximately 62,250 m2 and stands on a land plot of approximately 85,000 m2.

• Rhodes is the fourth largest Greek island and benefi ts from numerous attractive beaches, unspoilt villages and historical attractions. The island has the largest number of hotel beds of all Greece’s , which combined with its accessibility and excellent climate, makes it a leading Mediterranean leisure and convention destination.

• The hotel is located within walking distance from the island’s two largest conference and convention centres, which are also two of the largest in the Mediterranean region. Both are important demand generators for the hotel.

• From opening up to 2000, the hotel was operated by . Since then, the hotel has been operated by Hilton International under a management agreement. This management agreement will be terminated upon a sale.

• In recent years, the hotel has performed well below its full potential. Through improved operating effi ciency, scope exists to substantially improve the profi tability of the hotel.

• The hotel is off ered for sale by Ionian Hotel Enterprises S.A., a member of the Alpha Bank Group.

2 HVS HODGES WARD ELLIOTT { property description }

Hotel History Ionian Hotel Enterprises S.A. (the “Company”), a member of the Alpha Bank Group specializing in hotel assets management, undertook in 1987 the construction of a hotel property in Ixia, Rhodes, currently operated as the “Hilton Rhodes Resort” (the “Hotel”). Τhe architect team consisted of renowned Greek professionals, including Mr. Tombazis, Mr Dekavalas, Mr. Georgiadis, and Mr. Kiriakidis. Hotel construction was completed in 1993, and the Hotel started operating under the management of Grecotel S.A. The inauguration ceremony was conducted on June 1993 and the Hotel assumed full operations shortly afterwards under the name “Rhodes Imperial Grecotel”. The management agreement with Grecotel expired on 31st December 2000 and Hilton International has since undertaken the Hotel management and has been operating the Hotel under the name the “Hilton Rhodes Resort.”

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I Préveza (NORTHERN Bergama 3 SOUTHERN AEGEAN O Karpenísion Lésvos N Lefkáda Lamía () () 4 N Skíros 4 NORTHERN AEGEAN s Vó I I r ö Lefkáda ó E 5 A l vv e o O Agrínio ïk 6 h ó N k s Psará K 6 8 A Ámfissa Halkída Évia . I Livadia Kefaloniá Itháki Messolóngi (Chalkís) () Híos Izmir 7 WESTERRN GREECE IONIAN I S (Smyrna) K Thíva Híos N Argostóli Égio or 8 L int () SEA K hiakó ra A ólp s ga 38 Í Pátra os é 9 38 ° N M Athína () ° S 7 Kórinthos Canal 10AydinWESTERN MACEDONIA D Zákinthos Kórinthos S Ándros S O Amaliáda a Sámos (Corinth) la Pireás Vathí 11 EASTERN MACEDONIA ) S m I s a É o Árgos ro g ín Kéa Tínos Ikaría AND THRACE h ni i a t Pírgos Náfplio kó na in Trípoli s K 12 PELOPONNESUS k A ó Ermoúpoli á lp S Z r os g Míkonos o Síros Pátmos 13 12 l Kíthnos Dílos ik Spárti ó Ídra KIKLÁDES () P s Léros () K Sérifos National capital Kalamáta E ó 1 Páros vr lp 3 Kálimnos ó o Náxos O ta s Sífnos Administrative region capital s s ó k Amorgós City, town ia R in s Síkinos Íos s o s Mílos s p F e l ó Major airport ó k Níssiros M s o K i Astipálea A o l Simi Ródos n é p o l g Historical site k ó (Rhodes) a a L K n Anáfi D Tílos National boundary dr Thíra Kíthira os Megísti Administrative region boundary E RÓDOS 36° SEA OF CREATE (Rhodes) 36° Main road S ia) Andikíthira nd Secondary road iá o a n n (C a s Railroad im o o Kárpathos H h i a t l l k ó The boundaries and names shown and the designations é ik á used on this map do not imply official endorsement or R r N I s acceptance by the United Nations. Kássos g Kríti (Crete) A 050100 150 200 km 2 Gávdos GREECE 4 HVS HODGES WARD ELLIOTTMEDITERRANEAN SEA 0 50 100 mi 22° 24° 26° 28° { property description } Hilton Rhodes Rodos Ixiaa (Rhodes) Location Trianta The Hotel is situated on the north-west side of the island, on the beach of Ialyssos (Ixia), Diagoras a picturesque townlet surrounded by orchards. It is set between a beautiful green hillside International Airport (Mt Filaremos) and the beach of Ixia, combining sea and mountain views and providing Kamiros opportunities for diverse activities. It is just 13 kilometers from the Diagoras International Airport and 4 kilometers from the city of Rhodes. A footpath for walks connects Ixia bay to the Archangelos city of Rhodes. A link road that connects the Hotel to the main island artery of Rhodes - Emponas facilitates guests’ transportation. The west side of the island combines popular resorts, important archaeological sites, and picturesque villages. Important sites include the church of the Dormition of Theotokos Chalki (Virgin Mary, Mother of God) with its famous woodcarved temple, the of lalyssos Lindos (just 6 km away), and ancient Ialyssos, one of the most important archaeological sites on the island located on the hill of Filerimos, that hosts the remains of the temple of and Vatio Athena Poliada as well as the remnants of the Byzantine fortifi cations, the 14th century church of the Knights. A winding island road leads up to the ancient town of Rhodes, one of the few preserved medieval towns in Europe featuring the buildings in which the Knights of St. John lived six centuries ago. Ixia is one of the most touristically developed regions of Rhodes Island, hosting two of the largest and most complete conference and convention centres in the Mediterranean. Milder weather conditions are prevalent on the west side of the island compared to the east section. In particular, Ialyssos Bay is considered one of the most favorite sites for windsurfers. RHODES In addition, Afandou Golf Course is just 17 kilometers away. HVS HODGES WARD ELLIOTT 5 the hilton rhodes resort ixia, greece

Property Overview The Hotel is one of the most luxurious properties on the Island of Rhodes, ranked as a fi ve-star property by the Hellenic Chamber of Hotels (only 12 hotels in Rhodes island, out of 988 in total, are ranked as “fi ve-star”). It is distinctively built in steps against the green hillside, overlooking the . The Hotel lies in 85.000 m2 of lush landscaped gardens, providing a selection of swimming pools, a private beach and a range of restaurants and bars, as well as modern meeting and conference facilities. Its exterior design combines elements of the Rhodian as well as modern Greek architecture. Local craftsmanship has been extensively utilized to lend to the building a very unique character. Typical examples comprise the facade of the building as well as most public areas of the Hotel, such as the main lounge area and restaurant Castellania, that are artistically veneered with “Rhodian plaster” respecting the regional architectural tradition. The high quality interior design features local marble and wooden paneling which gives the impression of elegance and space, off ering luxurious, sophisticated facilities for the leisure or business traveler. To add further, the utilisation of natural daylight is prevalent in all public spaces, the main lobby, the restaurants and the conference areas of the 6th and 7th fl oor.

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PRIVATE BEACH FRONT Ixia beach has been awarded the blue fl ag for purity and cleanliness. The private beach is accessed directly from the Hotel via an underground pedestrian tunnel. The Hotel has been granted a license for the exclusive use of its beach front.

ROOMS The Hotel provides 402 rooms, with sea or mountain view. The room size is signifi cantly larger than that of the competition, since the hotel’s average room size is 32 m2, compared to 24 m2 for the average of the corresponding 5-star category.

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HVS HODGES WARD ELLIOTT 9 the hilton rhodes resort ixia, greece

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TYPE OF FACILITIES DESCRIPTION Luxury Suites (3) • Two-bedroom suites, off ering spacious sitting room and dining room facilities. They also off er the possibility of connection to two regular guest rooms, making it practically a three-room facility and allowing for diverse space utilisations. • Two of the luxury suites are on the 10th and 11th fl oor, with magnifi cent views over the Aegean sea. The total rooms’ area is 200 m2 including the bathroom, plus a 24 m2 balcony. • The third luxury suite is on the 5th fl oor, occupying 131 m2, including the bathroom, plus a 24 m2 balcony. • All luxury suites are sumptuously & stylishly decorated.

One Bedroom Suites (6) • 6 One-Bedroom suites with sea view • They off er spacious separate sitting room areas. • One-bedroom suites are elegantly decorated and occupy areas that range between 52-64 m2 including bathroom, plus 6-12m2 of balcony. They can accommodate up to three adults or two adults and two children .

Junior Suites (37) • 24 Junior suites with sea view • 13 Junior suites with mountain view • Spacious rooms with combined bedroom and sitting room areas, extending over 39 m2, including bathroom, plus 6m2 of balcony. They can accommodate up to three adults or two adults and two children.

Standard Rooms (355) • 99 Double/Twin with mountain views • 256 Double/Twin with sea views • Guest rooms’ area range between 28-32 m2 (most of them are 32 m2) including bathroom, plus 6-10m2 of balcony. They can accommodate up to three adults or two adults and one kid.

HVS HODGES WARD ELLIOTT 11 the hilton rhodes resort ixia, greece

12 HVS HODGES WARD ELLIOTT { property description }

89 guestrooms have been recently renovated (58 in 2002 and 31 in 2004). Direct-dial telephone lines, in-room safe deposit, fully equipped mini bar, hair dryer and individually controlled air-conditioning and fan coils to provide fresh air, interactive TV system including channels, information channel and pay TV, electronic lock (including secondary locking device) are a few of the amenities off ered at each room. Extra amenities off ered in the Suites are two additional telephone lines (one in the bathroom and one for computer access), tea & coff ee making facilities, iron & board, and electronic lap-top safe. Finally, smoking and non- smoking fl oors are separated. The following table provides more details regarding the distribution of rooms on each fl oor:

Double/Twin Double/Twin Suite Suite Bedroom Sea View View Floor Sea View Mountain View Sea View View Suite Luxury Suite Total Total

1 12 12 2 22 2 24 3 24 3 27 4 24 4 28 5 21 4 1 26 8 35 11 2 1 37 12 9 39 17 1 39 18 10 27 21 2 3 1 1 31 24 11 27 24 3 4 3 1 34 28 12 25 26 5 4 2 32 30

TOTAL 256 99 25 13 6 3 290 112

• Total number of rooms in advertising brochure is 401 because one of the luxury suites (on the 5th fl oor) is currently occupied by Hilton Rhodes Resort General Manager.

HVS HODGES WARD ELLIOTT 13 the hilton rhodes resort ixia, greece

RESTAURANTS & BARS The Hotel includes 3 restaurants, and 2 bars off ering a varied range of food and beverage destinations/environments CASTELLANIA Main restaurant of the Hotel, ideal for buff et breakfast, lunch and dinner, situated on the 6th fl oor, by the 6th fl oor pool, extends over 1,588 m2, and can sit up to 400 people, 350 indoors and 50 outdoors. SPECIALITY RESTAURANT Restaurant-bar on the 6th fl oor that off ers exclusive dining experience, elegantly decorated in a fusion of Mediterranean-Asian style. It is an area of 472 m2 and can accommodate up to 210 guests, including 50 in the bar section. PERGOLA Restaurant situated by the main outdoor swimming pool. It is a casual venue, ideal for outdoor a la carte lunches, pool snacks, and dinners. It can sit up to 170 guests, including 50 in the bar section. PIANO LOUNGE BAR (LOUNGE BAR) Bar adjacent to the 6th fl oor pool, which off ers a cosy atmosphere. Total area is 280 m2 and can accommodate up to 162 guests, including 14 in the bar section. POOL BAR Just outside the main swimming pool, adjacent to Pergola restaurant, for entertaining day and night.

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HVS HODGES WARD ELLIOTT 15 the hilton rhodes resort ixia, greece

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CONFERENCE AND MULTI-PURPOSE EVENTS FACILITIES The property can accomodate a wide range of events by use of its multi-purpose conference facilities. Specifi cally, the available conference areas are the following:

Imperial Conference Center/Ballroom Situated at the main lobby level (at the 7th fl oor), adjacent to the Business Center, the Imperial Conference Center is comprised of: • Two ballroom areas (Imperial A & B) • Ballroom areas foyer (Imperial Foyer) • 2 large meeting room areas ( & Ariadne) • Boardroom ( Boardroom); specially designed (based on Hilton specifi cations) to host high-level meetings; equipped with state of the art facilities such as specially designed table, automated pull-down projector screen, private coff ee-break amenities, etc.

All Imperial Conference Center rooms can be combined into one single unit/room that can accommodate events for up to 1,600 people. It is an excellent venue for all events from small meetings to large congresses, with natural light and large terraces for coff ee breaks overlooking the wonderful Aegean Sea. Standard conference infrastructure (video/slide/overhead projectors, fl ipcharts, LCD TV, etc.) is available.

HVS HODGES WARD ELLIOTT 17 the hilton rhodes resort ixia, greece

18 HVS/HODGES WARD ELLIOTT { property description }

Lindos Conference Area Situated one fl oor above the main lobby area (8th fl oor). Comprises of 5 diff erent rooms of two sizes (48 or 77 m2) that can host 50 or 70 guests in theatre seating each accordingly. Ideal for break-outs, separate work sessions/work groups and parallel panels during a conference.

Elafos Conference Area Situated on the 6th fl oor, adjacent to the Castellania Restaurant/Bar. It comprises 3 diff erent rooms which can accommodate 65, 65 and 130 guests in theatre seating respectively.

The Bar and Foyer section at Elafos Conference provide an ideal space for conference coff ee breaks and drinks, small receptions for conference guests. Elafos Rooms have also successfully been used in the past for special viewing sessions and animation activities.

Kamiros Conference Area Situated on the 6th and 7th fl oors, comprises three multi-purpose conference rooms connected via an internal staircase.

The design of the Kamiros Conference Area makes it ideal for independent small-size conventions of up to 200 guests capacity, with the possibility of three parallel panels/ work sessions. Its separate (from the main Hotel lobby) entrance, allows for conference privacy from the rest of the activities or other conventions that take place simultaneously at the hotel.

Business Center Equipped with two computer terminals boasting internet connections, several telephone lines, a fax machine, two printers, and a photocopier, providing all necessary support to accommodate the business needs of hotel guests.

Internet Café A host of computers with internet connection, located by the main swimming pool, allows guests to keep in touch with their life abroad.

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Conference facilities are equipped with state-of-the-art technical and audio/visual conference infrastructure including microphone installations, slide, overhead and video projectors systems, as well as LCD TV and fl ip charts. In addition, conference areas have complete mobile telecommunications coverage by all three Greek cell phone providers. Possibilities for external/ outside catering, based on the conferences’ demands are also available.

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The following table summarises the conferences and meeting rooms’ dimensions and capacities based on diff erent seating arrangements:

Dimensions Maximum Capacity Ceiling Room Name Height (m) Area (m2) L/W (m) Banquet Reception Classroom Theatre

IMPERIAL CONFERENCE CENTER Imperial Ballroom A + B 5.0 618 16.6*18.6 620 900 500 820 Imperial Ballroom A 5.0 309 16.6*18.7 280 420 230 360 Imperial Ballroom B 5.0 309 33.2*18.6 280 420 230 360 Imperial Foyer 3.2 418 33.2*12.6 360 550 - - Artemis 3.2 64 8.0*8.0 50 70 50 65 Ariadne 3.2 136 17.0*8.0 120 150 110 160 Aphrodite 3.2 64 8.0*8.0 50 70 50 65

Combined Imperial Conference 1,918 1,760 2,580 1,170 1,830

LINDOS CONFERENCE AREA Lindos 1 2.6 48 8.0*6.0 - - 40 50 Lindos 2 2.6 77 8.0*9.6 - - 55 70 Lindos 3 2.6 77 8.0*9.6 - - 55 70 Lindos 4 2.6 77 8.0*9.6 - - 55 70 Lindos 5 2.6 48 8.0*6.0 - - 40 50

Combined Lindos Conference 327 0 0 245 310

ELAFOS CONFERENCE AREA Elafos 1 3.2 64 8.0*8.0 50 70 50 65 Elafos 2 3.2 64 8.0*8.1 50 70 50 65 Elafos 3 3.2 112 14.0*18.0 100 120 90 130

Combined Elafos Conference 240 200 260 190 260

KAMIROS CONFERENCE AREA Kamiros 3.6 368 23.0*16.0 100 250 100 170 Zeus 3.6 368 23.0*16.0 130 300 130 200 Ialyssos 3.2 136 8.5*16.0 70 90 70 110

Combined Kamiros Conference 872 300 640 300 480

TOTAL CONFERENCE CENTER 3,357 2,260 3,480 1,905 2,880

HVS HODGES WARD ELLIOTT 21 the hilton rhodes resort ixia, greece

SWIMMING POOLS The property off ers three swimming pool alternatives: • Main Outdoor Swimming Pool: Situated on the ground fl oor, surrounded by nicely landscaped gardens, the Dance Floor, and the Pergola Restaurant. One of its key points is its unique design topped by a nicely architected bridge. It is supplemented by a Children’s / Paddling Pool for younger guests, on one of its sides. • 6th fl oor Outdoor Swimming Pool: Adjacent to the Castellania restaurant and the Lobby Lounge, it off ers panoramic view of Ixia Bay and provides for an alternative relaxed swimming and sun-bathing experience. • Indoor Heated Swimming Pool: Part of the Health Club and the Indoor Squash Courts, it off ers another indoor exercising option, and a swimming alternative during the winter months.

Detailed dimensions of the swimming pools are presented in the following table:

Swimming Pool Dimensions

Dimensions Floor Area (m2) Height (m)

Main Outdoor Swimming Pool Ground Floor 560 1.6 Outdoor Swimming Pool 6th Floor 256 1.6 Indoor Heated Swimming Pool Ground Floor 180 1.6

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SPORT, HEALTH & LEISURE CLUB AND ENTERTAINMENT FACILITIES The hotel off ers a wide selection of sports and recreational facilities of the Hotel, as described below.

Indoor Fitness & Leisure Centre: • Sauna, • Jacuzzi, • Indoor swimming pool, • 2 massage rooms (21 m2 ) • Fully equipped Health Club with machines for Fitness Training and areas for aerobic/group classes. Fitness classes can also be performed outdoors by the swimming pool area at the Dance Floor. • 2 indoor squash courts. These are the only squash courts on the island.

The main area of the Health Club extends over 144 m2 covered with special purpose carpet, and the supplementary rooms comprise of a total of 70 m2. A gym equipment storage area of 8 m2 is also available.

Outdoor Sport Facilities: • 2 outdoor tennis courts - fl oodlit and they can also be set up as basketball or volleyball courts, • Outdoor table tennis, • Beach volleyball court set up at the private beach front area, • Water polo facilities installed at the main swimming pool, • Outdoor Children’s Garden equipped with innovative recreational amenities, • Also, independently managed Water Sport Centre on the beach is available, off ering windsurfi ng, jet skiing, wakeboarding, water skiing, canoeing and motorboat excursions, • A choice of two outdoor swimming pools

Games Room: Adjacent to the indoor gymnasium facilities, it off ers a wide selection ranging from traditional board games to darts, table tennis, air hockey and a pool table.

Entertainment / Animation Facilities • Dance fl oor by the pool, • Conference rooms used for entertainment. HVS HODGES WARD ELLIOTT 25 the hilton rhodes resort ixia, greece

Rhodes, due to its geographic morphology, mild weather conditions (the longest summer in Greece with nine months of sunlight) and sports infrastructure, is ideal for diverse athletic activities.

• Winding paths on the island’s numerous hills provide the setting for memorable walking and mounting trekking while enjoying magnifi cent views and visiting cultural monuments.

• The morphology in combination with the of the island (easily accessible sea shore and several small/protected bays) makes it ideal for most water sports such as jet-skiing, water skiing, canoeing, and motorboat tours.

• Windsurfi ng is prevalent in the northern part of the island, where the hotel is situated.

Afando Golf Course • Additional sports facilities available on the island include, inter alia, golf course, football pitch, indoor basketball courts and a cycling track.

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28 HVS HODGES WARD ELLIOTT { property description }

RETAIL OUTLETS Two Shopping Arcades within the hotel off er a variety of shopping spaces suffi cient for diverse retail/concession alternatives like mini market, tailor/clothing shop, jewellery & art shop, and hairstyling & beauty treatments studios, among others. More specifi cally: • 1 st fl oor Shopping Arcade off ers nine individual store spaces ranging from 9-96 m2 • 7 th fl oor Shopping Arcade off ers four sizeable individual store spaces of around 24 m2 each. All stores are connected to hotel’s central air conditioning/heating facilities. None of the store spaces have window or door openings to the public road, only towards the private Hotel property areas.

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Detailed store dimensions information is presented in the following table:

Shopping Arcade Store Dimensions

Location Unit Area (m2)

First Floor 126.0 228.0 324.0 49.5 511.5 611.0 734.5 89.5 996.0 10 9.0 Total 259.0

Seven Floor 124.0 224.5 324.0 425.0 Total 97.5

Total Shopping Store Area 356.5

The variety of stores that operate currently in the shopping arcades, include: • On the 1st fl oor: mini market, tailor shop, women’s accessories store (occupies two combined store areas), hairdressing salon and casual clothes’ store. One of the remaining stores is currently utilised as an animation room for young kids. • On the 7th fl oor: jewellery shop and the Business Centre

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TRANSPORTATION A Car Rental desk is available in the hotel lobby area and a 100-space underground Car Parking, of total size of 2,500 m2, exists. An additional plot of land of 4,000 m2 , owned by the hotel, is also currently used as an open-space parking area. INFRASTRUCTURE A fi re detection system is installed in all public areas. All the guest rooms are equipped with two water sprinklers each. There is a central air conditioning system with three chillers (four compressors each). BUILDING SYNOPSIS / KEY CONSTRUCTION DATA The overall land area is 85,000 m2. The total built area is 62,254 m2, including the underground parking and all recreational spaces and support rooms. The edifi ce is divided into two sections/wings, upper and lower. Floors 6 and 7 are the common fl oor for both wings. There are separate foundations for the two wings and all the necessary expansion joints exist. Foundation is supported with armed bind-beams. Standard construction techniques have been followed: reinforced concrete foundation with interior and exterior walls made of brick. Overall, the construction is deemed very solid by external evaluators. Due to the ground incline, there is eff ectively no underground space. All of the supplementary/supporting areas (engine room, laundry, parking, maintenance, storage, etc) are internal, and usually located between fl oors 1 and 4. All storeys have balconies and all fl oors are covered with wall-to-wall carpeting. Frames are metallic, doors are wooden with T30 fi re protection grade, and the facades are covered with plaster.

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Detailed information of the building layout on a fl oor-by-fl oor basis is presented in the following table:

Floor-by-Floor Building Layout Floor Area (m2) Facilities Floor Area (m2) Facilities g 0 3,740 Underground Car Parking 6 7,054 Central Kitchen area 1 3,886 12 Rooms «Castellania» and Speciality Restaurants Pergola Restaurant and Pool Bar Piano Lounge Bar Outdoor pool Conference rooms ELAFOS Indoors Heated Swimming Pool CAMIROS Multi-purpose rooms Health Club, Sauna, Jacuzzi & Massage Rooms Outdoor swimming pool Two tennis and two squash courts Staff cafeteria Outdoor children garden Training room 10 Stores Goods receiving area Biological cleaning plantroom 7 5,841 Central Lounge Area - Reception and Business Centre Outdoor pool machinery Management Offices IMPERIAL Ballroom, Board Room and Meeting Rooms 2 3,101 24 Rooms th 3 3,967 27 Rooms 3 Stores (4 store utilised as Business Center) Machinery/Engine room 7B 4,486 Machinery floor 4 4,063 28 Rooms 8 4,600 49 Rooms and 5 LINDOS Meeting rooms Machinery/Engine room 9 4,416 57 Rooms Maintenance room 10 4,144 57 Rooms 5 5,001 26 Rooms 11 4,006 62 Rooms Storage Rooms 12 3,815 62 Rooms Laundry and Linen Rooms 12B 134 Machinery/Engine Room Linen Room Total 62,254 Staff Dressing Rooms

32 HVS HODGES WARD ELLIOTT { property description } the hilton rhodes resort ixia, greece

CAPITAL EXPENDITURE Signifi cant investments have been made to the hotel property since its completion in 1993, totaling up to €4.2 million, and include replacements, extensions and renovation of key property facilities.

Schedule of Capital Expenditure 1994 - 2005

Addition and Operational () Replacements Equipment Total

1994 125,852 60,590 186,442 1995 104,160 40,266 144,426 1996 49,288 49,336 98,624 1997 11,830 73,368 85,198 1998 354,524 35,454 389,978 1999 640,706 31,008 671,714 2000 321,424 50,895 372,319 2001 906,865 100,145 1,007,010 2002 335,034 89,369 424,403 2003 2,311 200,367 202,678 2004 397,715 143,423 541,138 2005 560,000 72,000 632,000

Total 3,809,709 946,221 4,755,930

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Expenditure for the last fi ve years has primarily targeted the modernisation of the convention facilities, amounting to €1 million and include the following: • construction of the boardroom, • creation of a business centre, • upgrading of conference halls according to the standards of Hilton Meetings, • Business center and computer room confi guration. In addition, during the last fi ve years, investments to renovate the Hotel public areas as well as the rooms and to upgrade systems infrastructure and other equipment totaled up to €1.5 million and include the following: • construction of a supplementary pool bar, • renovation of the lounge bar, • refurbishment of 87 rooms (27 on 5th fl oor, 30 on 12th fl oor, and 30 on 11th fl oor) that amounted up to €1 million in total, • improvement of systems infrastructure, and installation of new software programs, • new equipment, • improvement of fi re, life and safety system in all rooms. A capital expenditure plan suggests additional required capital investments in the area of €3-4 million within the next 3 to 5 years to cover renovation of the rest of the guestrooms, refurbishment of the health club, replacement of gym equipment, and substitution of the refrigeration towers.

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OWNERSHIP AND MANAGEMENT The hotel is owned FREEHOLD by Ionian Hotel Enterprises S.A. “Ionian Hotel Enterprises S.A.” was founded in 1957 and is a member of the Alpha Bank Group, which, according to recent data, participates in its share capital with an 90.28% stake. The company is listed on the Athens Stock Exchange. The “Hilton Rhodes Resort” operates as a branch of the Company, under a management agreement signed on 21 June 2000 with Hilton International. This management agreement will be terminated upon a sale of the hotel and, therefore, can be acquired by a purchaser unencumbered by the Hilton brand and management.

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Introduction Rhodes (or Rodos), one of the most beautiful islands in the North Eastern Mediterranean Sea, is the fourth largest of the Greek islands and the largest in the island complex that lies south east of mainland Greece. It is a scenic spot comprising unique beaches, unspoilt villages, varied landscapes and historical sites. Its landscape comprises mainly of hills and low mountains. Rhodes is the third most popular destination in Greece (based on annual tourist arrivals’ fi gures), following Athens and , Crete. It has become a leading leisure and business destination due to its ability to attract all types of tourist activity year round. Characteristically, monuments from its turbulent history can be found throughout Rhodes, intermingled with modern hotels, bars and restaurants.

HVS HODGES WARD ELLIOTT 37 A 1978 oos C h a Agia 2497 a s i Verdikoussa Larisa the hilton rhodesP resort Kalampaka 1054 Nikaia ixia, greece Farkadhon Stefa 2204 ios i ine oi is P 906 m Katsikas 2469 a THESSALIA Rigaio y h Pramanta T A r a c LOCATION AND ACCESSIBILITY h n t 2393 A Kerkyra () Paramythia 1974 h c

o h Kallifoni s e Igoumenitsa l 2184

o Neo Monastiri

o s Rhodes is located at the southeastern edge of the archipelagos of the Kerkyra IPEIROS Perdika d 1 (Corfu) Kanallaki 2042 Pelasg Dodecanese, facing the shores of Asia Minor, which are about 9-10 kilometers Petas V s Stylida o Arta a p o Makrakomi Lamia o r l v Molos I away. Paxoi a Sperche t T 2315 ios o Antipaxoi Krikellos 2152 Agio Kolpos u Karpenisi ( s Oiti Easy accessibility to the island via the airport and the sea port, facilitates Kifisos o Vonitsa 2510 Kato travelling to and from other regions of Greece and abroad: I Giona S IONIOI NISOI Palairos 1924 1589 Amfissa 2457 o n Kandila Parnassos • There are daily boats from Pireaus (Athens port) and frequent connections DYTIKI ELLAS Thermo Lefkada 1158 L. Trichonida Itea

ös

o l Panaitolio

n (Leucade) Astakos e Mataragka

to the rest of the Dodecanese islands (, , and h c Nafpaktos os

Akra Doukato A rn i Aitoliko o M Kamares K Kos) as well as to other islands in the Aegean sea, including the popular i orinthia Akra Dafnoudi Mesolongi Aigio ko s Xylok o o a Ithaki lp , , and Crete. There are also less frequent ferries to Patraïkos Ko Patra Ithaki Akra Araxos Vrachnaïka Sami Kato Achaïa Z n islands at the Northern side of the Aegean Sea (, Chios, Lesvos and i Argostoli 2341 2374 Lixouri 2221 Kyllin 1627 Varda Kleitoria Kefallonia Erymanthos N Limnos) as well as to , the second largest city in Greece. Akra Mounta I Lechaina Kand • Highspeed boats allow for daily excursions or overnight trips to nearby Akra Skinari s N Peloponni Katastari Amaliada Tropaia Levidi locations (such as the islands of Simi, Kastelorizo, Kos, Kalymnos, Patmos, Platanos 1981 l 756 Pyrgos A i Krestena lfeios T and Leros) and the Turkish sea shore. Daily cruises around the island a Zakynthos Akra Katakolo s (Zante) Megalopoli n Akra Marathia 1419 visiting isolated pristine beaches are also available. Kyparissiakos Kato Agios o Kolpos Figaleia d PELOPONNIS • There are several daily fl ights from Athens and three fl ights a week from T s i Meligalas a Arfara v ) g Santorini. Charters directly from major European cities are Filiatra 1224 Gargalianoi Chora arranged during the summer months. Proti 24 Petalidi

• British Airways has two direct fl ights per week, on Wednesday Longa Messiniakos Kolpos and Saturday, from London Gatwick. Methoni Akra Akritas

38 HVS HODGES WARD ELLIOTT a ) Akra Sigri 800 r s Eresos o e p d Polichnitos S ra i o Lesvos Akra { market overview } io Sp Maleas re rn (Lesbos) noviki 1551 o he V ort (N Pagasitikos VOREIO AIGAIO Nea Anchialos Argalasti 680 Akra Kartsino Akra Kolpos Skopelos Skyros Vamvakas Izmir 792 530 1726 Istiaia 1297 Volissos gia Loutra Akra Sarakiniko Akra Kymis Chios Mantoudi Aidipsou Kymi Chios V o r e i o s E 1343 1743 Oxylithos v v Akra Meston os Konstantinos o ï k Psachna Ochthonia Pyrgi o s Malesina K o l p o Akra Masticho Martino s Chalkida Aliveri Evvoia (Euboea) STEREA ELLAS Drosia Krieza Orchomenos Akraifnio Samos Samos Davlia Almyropotamos Akra Kafireas Neo Karlovasi Levadeia Schimatari AEGEAN SEA 1434 Aliartos Thiva Marathokampos 1413 Marathonas 1398 Akra Fanari Kapareli Erythres Akra Kampanos 1748 Parnitha Nea Platanistos 1409 Nea Liosia Kifisia Kolpos Karystos Makronisi Mandra Petalion Agios Gavrio Andros Christos os Zografos Petaliori 994 Kirykos Kopos Peristerio kastro Salamina Koropi 1033 Kiato ATHINA (Athens) Akra Livada Loutraki Agioi Theodoroi Keratea Akra Papas Voula 650 Patmos Zevgolatio Salamina Tinos Palaia Korinthos Lavrio Gyaros Mykonos D ni (Corinth) Peiraias Fokaia Leros Nemea Sofiko Mykonos Chiliomodi ( 678 Aigina Kea Loutra dila Agios Poseidonia Donoussa o Kalymnos Kos Argos 1199 D Kalymnos os Lygourio Georgios 846 Poros Kanala sos Poros d Pserim i Naxos o 1113 Paros e Kos Kefalos Tripoli ATTIKI 1001 d Argolikos Ydra 821 Rodos (Rhodes) Astros Kranidi Serifos 771 Trianta Kolpo k AkraVoudi Ydra e 698 P s Kamares Kamiros a Afantou s Petros a Spetses 690 c Alimia Archangelos r Leonidi Kyklades a n Tilos Emponas SOS n Ios Anydro 1215 735 Rodos (Rhodes) o Ios Ofidoussa n i Chalki v n Mirtoö Sikinos Lindos g s Sparti Velopoula e Vatio e Geraki NOTIO AIGAIO o t Evrota 751 s o s Pélagos Folegandros s s Milos e 404 Anafi Kattavia Skala Akra 566 ) Molaoi Thira Makra Arna Ierax Akra Emporeio Zafora Papadianika Akra Paraspori (Cyclades) Karavonisia Lakonikos Astakida Diafani Kolpos Neapoli Akra Maleas Chamili Divounia Karavas Vathia 1215 Potamos Karpathos Akra Tainaro HVS HODGES WARD ELLIOTT 39 507 Avlemonas Akra Kastellou Kythira Akra Kapello 600 the hilton rhodes resort ixia, greece

SIZE AND POPULATION The island covers an area of 1,398 square kilometers, and its population exceeds 110,000 people. WEATHER Rhodes has around nine months of sunlight annually, which sets it as the sunniest place in Greece and one of the sunniest in Europe. Its climate is subtropical and healthy. Refreshing westerly winds moderate the summer heat, while the winter is nearly always mild, with long periods of sunshine. Temperatures range from 19°C to 35°C between April and October and from 10°C to 22°C between November and March. RHODES Rhodes’ rich history dates back to before 3000BC, when the fi rst inhabitants arrived. It was not, however, until around 1550BC when the Minoans arrived followed by the Myceaneans and the in 1100BC, that Rhodes began to fl ourish. Since then, numerous peoples and countries ruled the island before it fi nally became part of Greece in 1948 along with all of the other Dodecanese islands.

40 HVS HODGES WARD ELLIOTT { market overview }

RHODES KEY ATTRACTIONS The island is split into 10 Municipalities, each off ering distinctive attractions and catering to a variety of tourist interests: Municipality of Rhodes - Home to the historic old town of Rhodes, this is a region rich in history. The City of Rhodes was founded in 408BC. Designed by architect Hippodamous, Rhodes became one of the most beautiful cities of its period. The city was transformed into the medieval city we still see today, when the Knights of St. John conquered the island and built strong fortifi cations, magnifi cent buildings, wide roads and numerous squares. Modern Rhodes Town is currently inhabited by well over 60,000 residents. It is also the fi rst port of call for many visitors due to its commercial harbour. The city’s infrastructure is well equipped for and off ers a wide variety of entertainment from nightlife, shopping and beaches to historical sights, family facilities and numerous parks and squares for relaxing.

HVS HODGES WARD ELLIOTT 41 the hilton rhodes resort ixia, greece

The major attractions of the municipality of Rhodes include the following: • Old Town of Rhodes - the World Heritage listed that the “old town of Rhodes is the largest inhabited medieval town in Europe”. • Hellenistic Stadium - built in the 3rd century BC and used for the Alioi Games. • Roman Odeon - still used for events today. • Temple of Pythion - the patron deity of the city.

• Aquarium- the most important marine Rhodes Aquarium research centre in Greece. • National Theatre - plays and concerts are held here throughout the year. • The temple of Aphrodite - dating back to the 3rd century BC. • Rodini Park - home of the famous Rhodian Deer. Also contains the remains of an ancient necropolis and the Tomb of . • Grand Master's Palace - once the headquarters of the leader of the Order of the Knights of St. John. Now a museum containing important archaeological fi nds from ancient and medieval Rhodes. • City Art Gallery - containing works of art by Greek painters. • Archaeological Museum of Rhodes - numerous exhibits including the statue of Venus.

42 HVS HODGES WARD ELLIOTT { market overview }

Municipality of Lalyssos - This is a thriving and popular tourist resort region, with modern hotels suitable for holidaymakers, business travellers and conferences alike. Its location on the north westernly part of the island protects it from the strong southerly winds, making it a haven for watersports. Inland, the region has an abundance of archaeological sites, with picturesque countryside and excellent sea views. Municipality of Kallithea. Stretching the length of beach, the region has numerous churches which are well worth visiting, but what really attracts the crowds are the beaches, the hotels, entertainment and Italianate spas. Kallithea Bay is home of the Italian spa complex and exotic vegetation, while Traganou beach exhibits impressive rock caves. Municipality of - The region comprises numerous villages, communities and valleys. Although very much a rural area, tourism to the municipality is starting to grow. There are many attractions here from Byzantine monasteries and churches to unique fl ora and fauna. The villages are also very welcoming, and locals and tourists mix in the traditional village tavernas. Key attraction is the Petaloudes (“Butterfl ies”) Valley, an area of natural beauty famous for its panaxia quadripunctaria butterfl ies. Municipality of Afandou - Combining the villages of Afandou, Kolymbia and Archipoli, this is a very traditional region where locals still retain their customs and simple manners. It has plenty to off er to visitors, especially outdoor pursuits. Main attraction is a 18-hole golf course, close to Afandou beach, that is open year round. Little Afandou train, great for families, makes the circuit round all the interesting sights in the region, including the beach at Afandou Bay. Municipality of Kamiros - This is one of the most important regions of Rhodes, with numerous historical sites and areas of natural beauty. The ruins of the ancient city of Kamiros were discovered in the 19th century and are still open today for visitors to see. There are many monasteries throughout the region. , a traditional village at the foot of Profi tis Ilias, is known for its picturesque countryside and natural springs and is ideal for walkers. The Church of is one of the most beautiful and esteemed Byzantine churches in the Mediterranean region. Municipality of Archagelos- Probably one of the most traditional regions of Rhodes, the municipality of Archangelos still retains its particular character. While the region has hotels for visitors, they are family run aff airs, rather than the larger hotels found on the rest of the island. Natural beauty is unmatched combining a beautiful valley

HVS HODGES WARD ELLIOTT 43 the hilton rhodes resort ixia, greece

with clear springs and enormous plane and pine trees, and small picturesque harbours. There is also much evidence of arts and crafts since pottery and hand-made tapestries are still practised. Municipality of Ataviros - Mt. Ataviros is the highest mountain on Rhodes, overlooking the other nine villages that make up this region. The area is a combination of mountainsides covered with vineyards and villages, rugged coastline and isolated beaches. The stunning ruins of the Medieval castle of , and the castle of Monolithos are a few remnants of past glory. Municipality of Lindos - Combining several picturesque villages, this region is steeped in history with the main point of interest being the huge Acropolis. Built on a steep rock 116 metres high, the Acropolis overlooks the town of Lindos, which it has protected since the 4th century. Lindos is an attractive town with unique architectural style of pretty houses, magnifi cent fl ower fi lled courtyards and narrow streets with tavernas, shops and restaurants. Municipality of Southern Rhodes - Rhodes’ largest region, Southern Rhodes is made up of 12 villages and is very diff erent from the rest of the island. Most of the villages date back to medieval times and have retained their unique character. Apolakia Dam, an important development on this part of the island, has been built to create a natural reserve and is home to a variety of unusual plant and bird life.

44 HVS HODGES WARD ELLIOTT { market overview }

Tourism Infrastructure Rhodes is one of the most popular tourist destinations in Greece, as arrivals’ distribution statistics show. Rhodes ranks third, based on arrivals by planes that comprise 81.82% of total arrivals in Greece. In addition, the Islands of the Aegean Sea (Dodecanese and Cyclades) account for 32.6% of total annual tourists staying in Greece, compared to Creta (27.3%), Ionian Islands (13.7%) and Attica (9.1%). (ICAP survey data). SEA Rhodes port is one of the busiest ones in Greece, as Rhodes is featured on the itinerary of many cruises originating in Greece and some from other countries as well. Port Annual Activity 2001 - 2004

Boats Cruiseships Volume Growth (%) Volume Growth (%)

2001 248,698 416,584 2002 293,975 18.2 % 347,768 -16.5 % 2003 315,037 7.2 374,445 7.7 2004 321,898 2.2 350,448 -6.4

Compound Annual Growth Rate 6.7 % -4.2 %

Source: Hellenic Chamber of Hotels, 2004 HVS HODGES WARD ELLIOTT 45 the hilton rhodes resort ixia, greece

AIRPORT The third busiest airport in Greece, represented in recent years total arrivals fi gures: Airport Annual Arrival Volume 1997 - 2005 Total Arrivals Growth (%)

1997 1,028,500 1998 1,111,672 8.1 % 1999 1,335,875 20.2 2000 1,340,830 0.4 2001 1,361,951 1.6 2002 1,288,132 -5.4 2003 1,228,120 -4.7 2004 1,162,169 -5.4 2005 1,193,547 2.7

Compound Annual Growth Rate 1.7 %

Source: Hellenic Chamber of Hotels, 2004

CASINO Casino Rodos located at the Grande Albergo delle Rose boutique hotel complex is situated in Rhodes town, found on the northern tip of Rhodes. It is only a fi fteen-minute drive from Diagoras International airport and a fi ve- minute drive from the hotel. HOTELS The supply of hotels in the island is abundant with a large percentage of luxury hotels, a data point that speaks to the level of overall tourist development of the island and the number and type of tourists it can attract. 46 HVS HODGES WARD ELLIOTT { market overview }

HVS HODGES WARD ELLIOTT 47 the hilton rhodes resort ixia, greece

The Hellenic Chamber of Hotels conducts annually a rating of all hotels, based on both the property evaluation (public space and individual rooms) and the overall service off ering. Hotels are classifi ed in fi ve distinct categories, of which the “fi ve-star” is the highest one. The island off ers the largest capacity (hotel beds) in Greece, as portrayed in the following table of the top four (in capacity) Greek tourist destinations: Capacity

Rhodes 68,738 Heraklio 60,680 Corfu 43,529 41,745

The largest luxury (fi ve-star) hotel complexes in Greece reside in Rhodes, and the island off ers in total the largest capacity of fi ve star hotel rooms & beds in Greece. Locations that off er the majority of the luxury (fi ve-star) hotels in Greece are: Hotels Rooms Beds

Athens 13 3,834 7,182 Heraklio 12 3,570 7,214 12 2,247 4,307 Rhodes 12 4,622 8,860

The distribution of lodging facilities in Rhodes is as follows: Hotels Rooms

5-star 2.5 % 12.8 % 4-star 21.3 46.6 3-star 24.9 19.0 2-star 36.8 18.4 1-star 14.5 3.3

48 HVS HODGES WARD ELLIOTT { competition }

The cumulative 2004 hotel rankings of the top four destinations in Greece (Athens, Heraklis and Rhodes), as well as totals for Greece and Dodecanes are presented in the following table. Detailed Supply per Category

Five-star Four-star Three-star Hotels Rooms Beds Hotels Rooms Beds Hotels Rooms Beds

Dodecanes 14 5,215 10,096 144 24,854 47,591 216 11,483 21,851 Athens 13 3,834 7,182 29 3,743 6,848 44 3,316 6,055 Heraklio 12 3,570 7,214 114 13,085 24,770 96 5,875 11,269 Rhodes 12 4,622 8,860 104 16,855 32,101 122 6,857 13,049 Greece 139 26,756 51,967 896 88,837 168,940 1,66 82,627 157,495

Two-star One-star Total Hotels Rooms Beds Hotels Rooms Beds Hotels Rooms Beds Dodecanes 513 16,233 30,340 101 1,630 3,112 988 59,415 112,990 Athens 102 3,944 7,248 64 1,459 2,816 252 16,296 30,149 Heraklio 198 6,392 11,971 91 2,922 5,456 511 31,844 60,680 Rhodes 180 6,658 12,450 71 1,185 2,278 489 36,177 68,738 Greece 4,473 122,615 230,281 1,731 31,056 59,588 8,899 351,891 668,271

HVS HODGES WARD ELLIOTT 49 the hilton rhodes resort ixia, greece

50 HVS HODGES WARD ELLIOTT { competition }

COMPETITION IN LALYSSOS The primary competition of Hilton Rhodes resort is as follows:

SOFITEL CAPSIS www.capsis.gr Owner: Private ownership and management by Capsis family, Sofi tel brand name Key facts: 5-star hotel, 691 rooms, 11 food and beverage venues, Conference Center with congress hall for up to 4,000 people and 18 meeting rooms. Description: Large conference – oriental hotel, possessing one of the two largest Conference Centres on the island.

MIRAMARE WONDERLAND www.mamhotel.gr Owner: Member of Mamidakis Hotels Key facts: 5-star hotel, 70,000 m2, 175 rooms, 2 food and beverage locations. Description: Conceived and built as a small community, nested along its private 1,5 km long sea-front. Distinct landscape design, translates into extensive areas of gardens, a pool, an artifi cial lagoon and several covered walkways. Each villa or cluster of bungalows is designed in individual unique architectural style.

RODOS PALACE www.rodos-place.gr Owner: Member of Cambourakis Group of Hotels Key facts: 5-star hotel, 3,000 m2, 785 rooms, 11 food and beverage venues, Convention Center accommodating up to 4,000 guests, 21 meeting rooms. Complex comprises of a 20-storey tower with luxurious rooms and suites, 7-storey Executive VIP Wing for conference delegates and 14 units with studios, apartments and bungalows. Description: The International Convention is recognised as one of the most complete and largest purpose-built Conference Centers in the Mediterranean region, and is the second largest on the island. It is the offi cial venue for the Summit and Western European Union Council of ministers. HVS HODGES WARD ELLIOTT 51 the hilton rhodes resort ixia, greece

RODIAN AMATHUS BEACH HOTEL www.rodian-beach.gr Owner: Member of Cypriot Company Amathus Key facts: 5-star hotel, 333 rooms, 6 food and beverage venues, banqueting facilities in main ballroom with capacity of up to 200 people. Description: Spacious public space with medieval architecture. The hotel has undergone partial refurbishment over the past two years.

HOTELS LOCATED IN OTHER PARTS OF THE ISLAND The following hotels, in other parts of Rhodes Island, compete to some extent with Hilton Rhodes Resort: PARADISE ALDEMARE Owner: Member of the Aldemare Group. Key Facts: 5-star hotel, 787 rooms, 12 food and beverage venues, banqueting facilities in main ballroom up to 600 people, 14 meeting rooms Description: Located at Kallithea beach. sandy beach front.

52 HVS HODGES WARD ELLIOTT { competition }

GRECOTEL RODOS ROYAL www.grecotel.gr Owner: Member of the Grecotel Group. Key Facts: 4-star hotel, 308 rooms and 61 bungalows, 4 outdoor swimming pools Description: Located at Faliraki beach. The well-kept gardens, the marble lobby, the stylish lounges with wall and ceiling frescos are key characteristics of the resort.

PALLADIUM www.rodospalladium.gr Owner: Private ownership by George Katris, Rhodian Company of Hotel Enterprises Katri A.E. Key Facts: 5-star hotel, 377 rooms, conferencing capabilities of up to 750 delegates total, 5 food and beverage venues Description: Located at Faliraki beach.

HVS HODGES WARD ELLIOTT 53 the hilton rhodes resort ixia, greece

SERVICE OFFERING AND BUSINESS MIX The hotel is largely aimed at the leisure package and convention markets. HOTEL PACKAGES TOURISM The most prevalent tourism type worldwide and in particular in Rhodes, hotel packages address the annual vacation needs of families, couples and friends’/relatives’ companies. The size of the hotel, as well as its off erings across lodging, dining and entertaining can make it suitable for the variety of ages and interests of this group. CONVENTION TOURISM The Island of Rhodes is a top-of-mind conference destination in the wider Mediterranean and South Eastern European region, due to the overall proposition of the Island, its mild weather conditions, location, natural beauty, as well as the recent investments in large-scale convention facilities. Attracting convention tourism is a key marketing strategy for the hotel that can allow for extension of the regular “annual season” before April and beyond October. Proximity to the two largest conference centers of the island (and most fully equipped in the Mediterranean sea) of total capacity around 8,000 people makes the universe of National or International Conference-related partnerships endless. Tour Operators consistently make up the largest proportion of business, with Groups/Incentives (corporate events) second. Under Grecotel Management, the focus was primarily on tour operator business. Hilton have increased the emphasis on the group and incentive segment. Marketing Mix

1994-2000 2001 2002 2003 2004 2005 Average

Tour Operators 85.5 % 76.0 % 78.0 % 77.1 % 79.0 % 76.5 % 82.1 % F.I.T./Individuals 3.9 7.1 6.0 3.7 3.3 5.6 4.4 Groups/Incentives 6.1 12.6 11.0 14.0 12.2 14.4 8.9 Travel Agents 3.5 1.3 0.8 0.5 0.5 0.2 2.3 Other 1.0 3.1 4.3 4.8 5.0 3.3 2.3

Note: Between 1994 and 2000, the hotel was managed by Grecotel

54 HVS HODGES WARD ELLIOTT { financial information }

The Hotel has traditionally worked with and has established strong long-term relationships with mainstream tour operators, which include TUI, Jet Air, Pegase, and Thomson among others. The following table breaks down the business generated by Tour Operators between 2000 and 2005, presenting actual production numbers. Tour Operators Production

Production Roomnights Tour Operator Country 2001 2002 2003 2004 2005

Jet Air 4,542 3,831 31,345 2,997 4,241 Unital Tourism Ltd Israel 2,707 548 2,440 3,443 TUI 10,851 7,140 3,451 4,690 2,947 Thomson 4,58 4,505 3,475 1,294 2,590 Aviation Links Israel 43 1,739 732 1,093 1,889 Pegase Belgium 5,138 4,309 1,722 2,416 1,870 Holland Int’l The Netherlands 1,058 1,563 1,791 Luxair Luxembourg 1,789 1,668 1,393 1,020 1,286 Costa Croisiere Italy 2,978 2,833 1,001 Jmc Holidays United Kingdom 508 704 1,273 985 Libra Holidays Grp United Kingdom 308 366 1,596 1,245 958 Flying Carpet LTD Israel 849 1,169 851 Kras Star Vakanties The Netherlands 2,739 2,303 - Alpitour SPA Italy 1,196 581 753 720 -

HVS HODGES WARD ELLIOTT 55 the hilton rhodes resort ixia, greece

GEOGRAPHIC ORIGIN OF BUSINESS In general, the hotel’s business distribution by guests’ nationality is in line with that of the Island. Rhodes is cited as one of UK’s favourite summer destinations, while the Benelux countries provide a steady (and one of the highest) tourist streams to the island and the hotel in specifi c. Germans have traditionally enjoyed a strong representation in the hotel’s clientele mix, and fi nally, the property is becoming increasingly popular over the last few years with Israeli crowd. The percentages in the table below portray the Hotel‘s total business broken down by the nationality of the guests:

BEDNIGHT BY NATIONALITY

1997 1998 1999 2000 2001 2002 2003 2004 2005 CAGR

Greece ( inland ) 5,041 9,772 12,016 7,651 11,654 12,313 12,855 14,379 18,731 15.7 % United Kingdom 11,799 17,302 21,496 18,654 20,297 24,442 26,297 19,054 21,498 6.9 Austria 1,583 781 1,583 2,354 1,169 1,329 511 1,305 612- 10.0 Benelux 21,168 36,395 38,003 33,624 21,986 20,189 21,906 22,585 22,506 0.7 1,137 1,924 1,460 1,039 1,299 1,873 1,802 1,577 2,970 11.3 Germany 52,792 39,169 39,399 49,990 18,147 15,604 10,346 11,038 9,084- 17.8 Switzerland 2,852 2,275 2,806 2,604 1,653 1,230 903 1,021 715- 14.2 Italy 6,904 12,843 7,944 4,332 2,615 2,267 8,288 10,357 10,186 4.4 USA 1,297 2,039 1,362 2,444 2,511 3,362 2,487 3,294 5,650 17.8 Israel 1,096 2,713 8,733 1,104 16,067 16,909 7,600 11,684 15,346 34.1 Turkey 56 2,351 1,572 298 528 906 2,441 2,862 3,475 Other 3,786 8,877 8,291 1,048 21,005 17,302 15,706 9,759 12,752 14.4

TOTAL 109,511 136,441 144,665 125,142 118,931 117,726 111,142 108,915 123,525 1.3 %

Recent trends based on 2004 and 2005 experience imply an increase on the Belgian and German markets, and a strengthening relationship with the Israeli market.

56 HVS HODGES WARD ELLIOTT { financial information }

LABOUR FORCE The hotel has historically operated for an average of 214 days per year, between the months of April and October (“season”), while for the rest of the year it remains closed. During the “season”, the Hotel employs about 220 people on average, while the rest of the year, the hotel staff amounts up to about 20 people in total. Total number of full-time and seasonal employees could vary signifi cantly based on hotel management choices and operations standards. All employees currently working at the hotel are directly employed by the Ionian hotel Enterprises with the exception of the General Manager who is a Hilton International executive. All personnel related data described in the following paragraphs are based on historical hotel operations data. “Full time” employees (that support the hotel operations throughout the year), include the general manager, accountant, human resources offi cer, director of operations, sales offi cer, information systems manager, conferences organizer, fi nancial director, chief engineer and technical building/equipment maintenance & support.

“Seasonal” employees are employed under fi xed term employment contracts and are subject to the local “Collective Hotel Employees Employment Agreement”, that defi nes monthly salaries per employee expertise (with the exception of some posts at the kitchen). Personnel hiring is executed in stages at the beginning of the “season” based on occupancy forecasts. “Collective Hotel Employees Employment Agreement” in Rhodes necessitates employee reimbursement in case of non-renewal of seasonal employees’ contracts. Total reimbursement cost for the Hotel is estimated at €972,000, in case of non-renewal of all seasonal staff contracts.

HVS HODGES WARD ELLIOTT 57 the hilton rhodes resort ixia, greece

Typical personnel roles’ distribution at “season”, based on past hotel operations, is the following:

Management Division (20) Room Service Division (63) Food & Beverage Outlets (113) Maintenance Division (18) General Manager Division Director Director Head Division Head Secretary Reception (11) Head of outlets (2) Technicians (9) Director of Finance Grooms (5) F&B control (2) Gardners (3) Accountants (5) Head of Floors & Assistants (3) Cooks (29) Pool & Beach (5) Driver Chambermaids (31) Buff et (3) Storage room personnel (3) Cleaners (4) Pastry cooks (3) Recreational Division (8) HR Offi cer Laundry room personnel (7) Butcher (2) Head PR Offi cer (2) Linen room employee Kitchen cleaning (11) Gym Instructor (2) Sales/ Reservations (3) Waiters (53) Musician Lifeguard Barmen (7) Animation (6) Information Systems

Based on 2004 data, personnel costs per division are as follows: Total Annual Employee Costs Management Division € 747,935 Room Service Division € 1,056,106 F&B Outlets € 1,211,636 Maintenance Division € 384,691 Recreational Division € 100,373 TOTAL € 3,500,741

58 HVS HODGES WARD ELLIOTT { financial information }

SEASONALITY OCCUPANCY SEASONALITY 2002 - 2005

Occupancy Seasonality 2002-2005

January February March April May June July August September October November December Total

2005 Available Rooms 4,010 12,431 12,030 12,431 12,431 12,030 10,426 2,406 78,195 Occupied Rooms 1,196 6,110 8,504 10,420 11,794 11,075 7,006 625 56,730

Occupancy (%) 29.8% 49.2% 70.7% 83.8% 94.9% 92.1% 67.2% 26.0% 72.5% Average Room Rate () 45.4 56.0 59.2 72.7 78.8 61.6 62.2 59.2 65.9

2004 Available Rooms 11,629 12,431 12,030 12,431 12,431 12,030 9,624 82,606 Occupied Rooms 3,331 7,540 7,834 9,071 10,712 9,762 6,218 54,468

Occupancy (%) 28.6% 60.7% 65.1% 73.0% 86.2% 81.1% 64.6% 65.9% Average Room Rate () 46.3 71.3 76.2 70.4 78.8 67.8 57.0 69.5

2003 Available Rooms 12,030 12,431 12,030 12,431 12,431 12,030 12,431 85,814 Occupied Rooms 4,186 5,650 8,405 9,056 11,749 10,640 5,926 55,612

Occupancy (%) 34.8% 45.5% 69.9% 72.9% 94.5% 88.4% 47.7% 64.8% Average Room Rate () 50.5 53.6 67.2 80.3 77.0 69.4 69.7 69.5

2002 Available Rooms 1,604 12,030 12,431 12,030 12,431 12,431 12,030 12,431 1,203 88,621 Occupied Rooms 1,120 4,970 7,598 8,901 9,829 11,380 9,750 5,657 27 59,232

Occupancy (%) 69.8% 41.3% 61.1% 74.0% 79.1% 91.5% 81.0% 45.5% 2.2% 66.8% Average Room Rate () 36.57 43.5 56.4 67.8 70.6 77.6 70.9 65.8 57.3 66.4

HVS HODGES WARD ELLIOTT 59 the hilton rhodes resort ixia, greece

HISTORICAL PERFORMANCE The Hilton Rhodes Hotel has been operating fully since 1994. During the period 1994 – 2004 the hotel has been managed by two specialised operators, namely Grecotel S.A. (1994-2000) and Hilton International (2001-2004). The fi nancial performance of the hotel has been following a mixed trend, steadily improving in the fi rst half of the period, – peaking in 1999 – and presenting moderate results henceforth. Factors contributing, among others, to recent results can be attributed to the 11 September 2001 terrorist attack in the U.S., which severely aff ected global tourism, the war in Iraq, the tardy implementation of a strategic plan from the Greek Ministry of Tourism, the economic slowdown on both sides of the Atlantic and the European Tour Operators status. The table below summarily presents the key fi nancial indicators of the Hilton Rhodes Hotel for the period 1994-2004

Key Financial Indicators 1994 - 2005

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Number of Rooms: Days in Operation: 243 242 226 227 218 214 209 216 221 214 206 195 Occupied Rooms: 83,975 68,384 70,144 76,136 67,697 71,093 66,419 59,448 59,232 55,612 54,468 56,730 Occupancy: 86.0 % 70.3 % 77.2 % 83.4 % 77.3 % 82.6 % 79.1 % 68.6 % 66.8 % 64.8 % 65.9 % 72.5 % Average Rate: 32.8 41.4 43.1 44.1 48.0 51.1 55.3 67.5 66.1 69.4 71.0 66.4 RevPAR: 28.2 29.1 33.3 36.8 37.1 42.2 43.7 46.3 44.1 45.0 46.8 48.1

REVENUE (000s) Rooms 2,757 2,832 3,025 3,360 3,252 3,633 3,673 4,011 3,912 3,862 3,865 3,765 Food & Beverage 3,115 3,002 3,292 3,559 3,574 3,952 3,918 3,414 3,395 3,342 3,129 3,251 Other Revenue 381 416 308 407 367 383 388 344 281 293 268 357 Total 6,253 6,250 6,625 7,326 7,193 7,968 7,979 7,769 7,589 7,497 7,262 7,373

GROSS OPERATING PROFIT (000s) 1,741 1,748 1,894 2,364 2,409 2,836 2,183 747 660 1,333 848 999 27.8 % 28.0 % 28.6 % 32.3 % 33.5 % 35.6 % 27.4 % 9.6 % 8.7 % 17.8 % 11.7 % 13.6 %

60 HVS HODGES WARD ELLIOTT { financial information }

OPERATING HISTORY 2002 - 2005

2002 2003 2004 2005

Number of Keys: 401 401 401 401 Occupied Rooms: 59,232 55,612 54,468 56,730 Days Open: 221 214 206 195 Occupancy: 66.8 % 64.8 % 65.9 % 72.5 % Average Rate: 66.1 69.4 71.0 66.4 (000s) RevPAR: 44.1 45.0 46.8 48.1 REVENUE Rooms 3,912 51.6 % 3,862 51.5 % 3,865 53.2 % 3,765 51.1 % Food & Beverage 3,395 44.7 3,342 44.6 3,129 43.1 3,251 44.1 Telephone 52 0.7 31 0.4 25 0.3 33 0.4 Other Income 229 3.0 262 3.5 243 3.3 324 4.4 Total 7,589 100 7,497 100 7,262 100 7,373 100 DEPARTMENTAL EXPENSES Rooms 1,306 33.4 1,187 30.7 1,221 31.6 1,206 32.0 Food & Beverage 3,011 88.7 2,695 80.6 2,584 82.6 2,521 77.5 Telephone 0 0.0 0.0 0 0.0 22 65.7 Other Income 97 34.6 87 29.7 86 32.2 217 60.9 Total 4,414 58.2 3,969 52.9 3,892 53.6 3,965 53.8 DEPARTMENTAL INCOME 3,175 41.8 3,528 47.1 3,370 46.4 3,408 46.2 UNDISTRIBUTED OPERATINH EXPENSES Administrative & General 1 1,043 13.7 862 11.5 957 13.2 920 12.5 Marketing 238 3.1 163 2.2 252 3.5 207 2.8 Property Operations & Maintenance 622 8.2 600 8.0 706 9.7 631 8.6 Energy 612 8.1 570 7.6 607 8.4 650 8.8 Total 2,515 33.1 2,195 29.3 2,522 34.7 2,408 32.7 GROSS OPERATING PROFIT (GOP) 660 8.7 1,333 17.8 848 11.7 999 13.6 FIXED EXPENSES Property Taxes 85 1.1 94 1.3 93 1.3 89 1.2 Total 85 1.1 94 1.3 93 1.3 89 1.2 NET INCOME 576 7.6 % 1,239 16.5 % 755 10 % 910 12.3 %

1 Includes Property Insurance

Source: Hotel Management

HVS HODGES WARD ELLIOTT 61 the hilton rhodes resort ixia, greece

PERFORMANCE POTENTIAL The management of Ionian Hotel Enterprises S.A. has identifi ed numerous factors which should contribute to a substantial improvement of the hotel’s fi nancial performance: • Increase cost effi ciency and achieve improved cost/income ratios, in alignment with those of comparable hotels, and particularly with regard to personnel costs. • Establish relationships with local operators and improve relationships with current partners. • Develop new partners in the local market in order to increase exposure internally, and enhance domestic tourism. • Target other distribution channels’ untapped potential, in order to shift the business mix toward more lucrative customers. • Place emphasis on recurring business. • Extend the operating period through the off ering of specialty tourism and selective targeting of customers. • Refurbish rooms, the health club and upgrade restaurants, so as to maintain a market leading position in terms of facilities as a premium hotel of 5-star status.

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HOTEL PERFORMANCE - STATISTIC DETAILS

Actuals Forecast Operating Statistics () 2003 2004 2005 Year One Year Two Year Three Year Four Year Five Occupancy 64.8 % 65.9 % 72.5 % 72.0 % 74.0 % 78.0 % 80.0 % 80.0 % Average Daily Rate 69 71 66 72 79 91 105 110 RevPAR 4547485259718488 RevPAR Percentage Growth 4.0 % 2.9 % 7.7 % 13.1 % 21.2 % 17.9 % 5.0 % Number of Rooms 401 401 401 402 402 402 402 402 Occupied Rooms 55,612 54,468 56,730 60,782 62,471 67,415 69,144 69,144 Revenue () Rooms (000s) 3,862 3,865 3,765 4,376 4,948 6,140 7,242 7,604 Food & Beverage Per Occupied Room 60.1 57.5 57.3 57.1 58.4 59.4 60.7 62.2 Telephone Per Occupied Room 0.6 0.5 0.6 0.6 0.6 0.7 0.7 0.7 Other Income Per Occupied Room 4.7 4.5 5.7 6.2 6.2 6.2 6.3 6.4

Actuals Forecast Departmental Expenses 2003 2004 2005 Year One Year Two Year Three Year Four Year Five Rooms Percentage 30.7 % 31.6 % 32.0 % 28.0 % 25.8 % 22.5 % 19.9 % 19.4 % Per Occupied Room 21.3 22.4 21.3 20.2 20.4 20.5 20.8 21.3 Food & Beverage Percentage 80.6 % 82.6 % 77.5 % 75.6 % 74.9 % 73.5 % 72.9 % 72.9 % Per Occupied Room 48.5 47.4 44.4 43.2 43.7 43.7 44.2 45.4 Telephone Percentage - % - % 65.7 % 53.0 % 52.4 % 51.3 % 50.8 % 50.8 % Other Income Percentage 33.2 % 35.5 % 67.1 % 49.8 % 49.4 % 48.6 % 48.3 % 48.3 % Undistributed Oper. Expenses Admin. & General Percentage 11.5 % 13.2 % 12.5 % 10.9 % 10.1 % 8.8 % 8.4 % 8.3 % Per Month 71,820 79,769 76,687 75,027 75,648 72,186 71,251 68,293 Marketing Percentage 2.2 % 3.5 % 2.8 % 3.2 % 3.1 % 2.9 % 2.7 % 2.7 % Prop. Operations & Maint. Percentage 8.0 % 9.7 % 8.6 % 5.8 % 5.6 % 5.2 % 4.9 % 4.9 % Per Month 50,023 58,821 52,583 40,193 42,055 42,538 41,987 40,244 Energy Per Occupied Room 10.3 11.1 11.5 10.8 10.9 11.0 11.4 11.6 Percentage 7.6 % 8.4 % 8.8 % 7.9 % 7.6 % 7.0 % 6.6 % 6.5 % Management Fee Percentage - % - % - % 3.0% 3.0% 3.0% 3.0% 3.0% Fixed Charges Property Taxes Expense per Month 7,824 7,734 7,417 7,372 7,556 7,319 6,966 6,664 Reserve for Replacement Percentage - - - 4.0 % 4.0 % 4.0 % 4.0 % 4.0 %

NOTE: The financial projections and investment analyses represented herein contain estimates and assumptions based on our study of the current market conditions. HVS Hodges Ward Elliott neither warrants nor guarantees the results of these projections and analysis.

HVS HODGES WARD ELLIOTT 63 the hilton rhodes resort ixia, greece

HOTEL PERFORMANCE - FORECAST Actuals Forecast 2005 Year One Year Two Year Three Year Four Year Five Number of Keys: 401 402 402 402 402 402 Occupied Rooms: 56,730 60,782 62,471 67,415 69,144 69,144 Occupancy: 72.5 % 72.0 % 74.0 % 78.0 % 80.0 % 80.0 % Average Rate: 66 72 79 91 105 110 (000s) RevPAR: 48.1 51.8 58.6 71.0 83.8 88.0 REVENUE Rooms 3,765 51.1 % 4,376 53.0 % 4,948 54.8 % 6,140 57.9 % 7,242 60.8 % 7,604 61.3 % Food & Beverage 3,251 44.1 3,473 42.0 3,645 40.4 4,004 37.8 4,196 35.2 4,301 34.7 Telephone 33 0.4 38 0.5 40 0.4 45 0.4 47 0.4 48 0.4 Other Income 324 4.4 374 4.5 389 4.3 418 3.9 434 3.6 445 3.6 Total 7,373 100.0 8,262 100.0 9,022 100.0 10,607 100.0 11,919 100.0 12,398 100.0 DEPARTMENTAL EXPENSES Rooms 1,206 32.0 1,226 28.0 1,277 25.8 1,383 22.5 1,439 19.9 1,475 19.4 Food & Beverage 2,521 77.5 2,625 75.6 2,729 74.9 2,945 73.5 3,059 72.9 3,136 72.9 Telephone 22 65.7 20 53.0 21 52.4 23 51.3 24 50.8 24 50.8 Other Income 217 67.1 187 49.8 192 49.4 203 48.6 210 48.3 215 48.3 Total 3,965 53.8 4,059 49.1 4,220 46.8 4,554 42.9 4,732 39.7 4,850 39.1 DEPARTMENTAL INCOME 3,408 46.2 4,203 50.9 4,803 53.2 6,053 57.1 7,187 60.3 7,548 60.9 UNDISTRIBUTED OPERATINH EXPENSES Administrative & General  920 12.5 900 10.9 908 10.1 938 8.8 998 8.4 1,024 8.3 Marketing 207 2.8 264 3.2 278 3.1 306 2.9 327 2.7 337 2.7 Property Operations & Maintenance 631 8.6 482 5.8 505 5.6 553 5.2 588 4.9 604 4.9 Energy 650 8.8 654 7.9 681 7.6 743 7.0 786 6.6 803 6.5 Total 2,408 32.7 2,301 27.8 2,372 26.4 2,541 23.9 2,698 22.6 2,769 22.4 GROSS OPERATING PROFIT (GOP) 999 13.5 1,902 23.1 2,431 26.8 3,513 33.2 4,489 37.7 4,779 38.5 Management Fee 0 0.0 248 3.0 271 3.0 318 3.0 358 3.0 372 3.0 GOP AFTER MANAGEMENT FEES 999 13.5 1,654 20.1 2,160 23.8 3,195 30.2 4,131 34.7 4,407 35.5 FIXED EXPENSES Property Taxes 89 1.2 88 1.1 91 1.0 95 0.9 98 0.8 100 0.8 Reserve for Replacement 0 0.0 330 4.0 361 4.0 424 4.0 477 4.0 496 4.0 Total 89 1.2 419 5.1 452 5.0 519 4.9 574 4.8 596 4.8 NET INCOME 910 12.3 % 1,235 15.0 % 1,708 18.8 % 2,675 25.3 % 3,557 29.9 % 3,811 30.7 %

 Includes Property Insurance

NOTE: The financial projections and investment analyses represented herein contain estimates and assumptions based on our study of the current market conditions. HVS Hodges Ward Elliott neither warrants nor guarantees the results of these projections and analysis.

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HVS HODGES WARD ELLIOTT 65 the hilton rhodes resort ixia, greece

RETURN ANALYSIS

SOURCE AND USE OF FUNDS (000s)

Property Acquisition 40,000 First Mortgage 27,300 65% Renovation & Closing Costs 2,000 Equity 14,700 35% Total Use of Funds 42,000 Total Source of Funds 42,000 100%

Number of Rooms 402 Total Cost per Room 104

FIRST MORTGAGE (000s)

Mortgage Amount 27,300 Monthly Payment 156 Cumulative Mortgage Amount 26,650 Annual Payment 1,873 Interest Rate 5.00% Amortisation Period 25 years Year One Year Two Year Three Year Four Year Five Beginning Balance 26,650 26,650 26,097 25,516 24,906 Annual Payment 1,333 1,873 1,873 1,873 1,873 Portion to Interest 1,333 1,320 1,292 1,262 1,231 Portion to Principal — 553 581 611 642 Increase in Debt ————— Ending Balance 26,650 26,097 25,516 24,906 24,264

YEARLY CASH FLOW SUMMARY (000s)

Year One Year Two Year Three Year Four Year Five Net Operating Income 1,235 1,708 2,675 3,557 3,811 First Mortgage Annual Payment 1,333 1,873 1,873 1,873 1,873 Cash Flow after Debt Service (97) (164) 802 1,684 1,938 Debt Service Coverage Ratio 0.93 0.91 1.43 1.90 2.04

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RETURN ANALYSIS

CAPITAL GAIN CALCULATION (000s)

Sixth Year Net Operating Income 3,955 Terminal Cap Rate 7.5% Gross Sales Price 52,730 Selling Costs 1.5% Net Sales Price 51,939 Remaining First Mortgage Balance 24,264 Return of Equity 14,700 Capital Gain 12,975 Sales Price per Room 131

LEVERAGED IRR ANALYSIS (000s)

Year Zero Year One Year Two Year Three Year Four Year Five Equity(14,700) Cash Flow after Debt Service (97)(164) 802 1,684 1,938 Net Sales Price 51,939 Remaining First Mortgage Balance (24,264) Net Cash Flow (14,700) (97) (164) 802 1,684 29,614

Cash-on-Cash Return -0.7% -1.1% 5.5% 11.5%

Five-Year Leveraged IRR 17.0%

NOTE: The financial projections and investment analyses represented herein contain estimates and assumptions based on our study of the current market conditions. HVS Hodges Ward Elliott neither warrants nor guarantees the results of these projections and analyses.

HVS HODGES WARD ELLIOTT 67 the hilton rhodes resort ixia, greece

BASIS OF SALE The hotel is off ered for sale by Ionian Hotel Enterprises. The contemplated sale can be eff ected via the two alternative structures presented below: 1. Asset Sale: the most straightforward route*. 2. Company Sale: more complicated and potentially time consuming structure where: Either, a. Ionian Hotel Enterprises spins off the business unit of Hilton Rhodes Hotel to a 100% subsidiary of the company (no taxes incurred). Subsequently, it sells the shares of the non-listed subsidiary company to the Selected Investor and incur a tax on the transfer of non-listed shares (approx. 5%) calculated on the value of the transaction. Or, b. Ionian Hotel Enterprises spins off the business unit of Hilton Rhodes Hotel to a company indicated by the selected investor. Subsequently, it will receive shares equal to the book value of the transferred assets, and can transfer sell these to the Selected Investor, incurring a tax on the transfer of non-listed shares (approx. 5%) calculated on the value of the transaction. * the purchaser will incur an asset transfer tax of 11%

68 HVS HODGES WARD ELLIOTT HVS HODGES WARD ELLIOTT 69 the hilton rhodes resort ixia, greece

CONTACTS For further information, or to organise an inspection of the property, please contact:

Charles Human – Managing Director [email protected]

Pascal Bichon – Senior Associate [email protected]

HVS HODGES WARD ELLIOTT 1 Lancaster Place London WC2E 7ED UNITED KINGDOM Tel: +44(0) 20 7257 2000 Fax: +44(0) 20 7257 2009

www.hvshwe.com

70 HVS HODGES WARD ELLIOTT DISCLAIMER HVS Hodges Ward Elliott (‘the Advisers’) have been appointed on an exclusive basis by the Owners to advise on the sale of the hotel. This memorandum was prepared by HVS Hodges Ward Elliott and has been reviewed by representatives of the owners. It contains selected information pertaining to the owners and does not purport to be all-inclusive or to contain all of the information which prospective lenders may desire. The material in this memorandum is based in part upon information supplied by existing management and in part upon information obtained by HVS Hodges Ward Elliott from sources they deem to be reliable. The Owners’ existing management has provided HVS Hodges Ward Elliott with certain data contained in this memorandum; this information has not been independently verifi ed by the Advisers. It should be noted that all projections are provided for general reference purposes only in that they are based on assumptions relating to the general economy, competition, and other factors beyond the control of the Owners and the Advisers, and therefore are subject to variation. Neither the Owners, nor HVS Hodges Ward Elliott, nor any of their respective subsidiaries or affi liates, directors, offi cers, employees or agents, nor any of the sources referred to above, have made, or are making, any representation or warranty as to the completeness of this memorandum or any of its contents, and no legal or other commitments or obligations shall arise by reason of this memorandum or its contents. Prospective investors must make their own investigations, projections and conclusions entirely without reliance upon the material contained in this memorandum. The Owners and the Advisers expressly reserve the right, at their sole discretion, to reject any or all expressions of interest or off ers to lend and/or to terminate discussions with any entity at any time with or without notice. The Owners shall have no legal commitment or obligation to any entity reviewing this memorandum or making a proposal unless and until a written agreement for such investment has been fully approved by the Owners. By receipt of this memorandum, you agree that this memorandum and its contents are of a confi dential nature, that you hold and treat it in the strictest confi dence, and that you will not disclose this memorandum or any of its contents to any other entity without the prior written authorisation of the Owners or the Advisers; nor will you use this memorandum or any of its contents in any fashion or manner detrimental to the interest of the Owners or the Advisers or any of their respective subsidiaries or affi liates. In this memorandum, certain documents are described in summary form. The summaries do not purport, and are not warranted, to be complete, nor necessarily accurate, descriptions of the full agreements involved, nor do they purport to constitute a legal analysis of the provisions of the documents. The terms and conditions stated in this section will relate to all sections of the memorandum as if stated independently therein. This document does not constitute a prospectus, or listing particulars or an investment advertisement pursuant to Section 21 of the Financial Services and Markets Act 2000 and is exempt from any legal requirement that its contents be approved by an authorised person.

HVS HODGES WARD ELLIOTT 71 the hilton rhodes resort ixia, greece

72 HVS HODGES WARD ELLIOTT