Rachel J. Roginsky, ISHCDaniel C. Hanrahan II, MAI, CRE

Gregory T. Bohan

76 Canal Street, Boston, MA 02114 ~ 617/722-9916 238 South State Street, Newtown, PA 18940 ~ 215/579-1804

3418 Norfolk Street, Pompano Beach, FL. ~ 954/786-2019

www.pinnacle-advisory.com

National Trends – Occupancy and ADR

50

55

60

65

70

75

80

85

90

1996 1997 1998 1999 2000 2001 2002 2003

Occupancy (%)

ADR ($)

Peak $86.64July 2001

$83.33December 2003

Peak 65.2%June 1996 59.3%

December 2003

Top and Bottom 5 Markets – Percent RevPAR Change 2003

-19.6

-14.7-11.9

-9.5-7.5

0.4

4.4 4.46.4 7.4 8.1

-25

-20

-15

-10

-5

0

5

10

Salt Lake City

, UT

San Jose, CA

Oakland, CA

Boston, MA

Houston, TX

Total U.S.

Norfolk-VA Beach, V

A

Anaheim-Santa Ana, C

A

Fort Lauderdale, F

L

Oahu Island, HI

Miami-Hialeah, F

L

Top 5

Bottom 5

Historical Trends

•Occupancy

•ADR

•RevPAR

Historical Trends by Area

Historical Trends

•Occupancy

•ADR

•RevPAR

Historical Trends by Area

Boston / Cambridge

Boston / Cambridge Occupancy 1990 – 2003

Boston / Cambridge ADR 1990 – 2003

Boston / Cambridge RevPAR 1990 – 2003

Boston/Cambridge 2003 by Area

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

Back Bay Downtown Other Cambridge

Occupancy

Avg Rate

RevPAR

•Commercial Demand

•Leisure Demand

•Group Demand

•New Supply

•Projections

•Commercial Demand

•Leisure Demand

•Group Demand

•New Supply

•Projections

Boston / Cambridge Outlook 2004

•Improving Economy•Growth in High Tech Industries•Financial Services

Improving Stock MarketConsolidation

•Pharmaceutical and Biotech

•Improving Economy•Growth in High Tech Industries•Financial Services

Improving Stock MarketConsolidation

•Pharmaceutical and Biotech

Commercial Demand

•Improving Economy•Weak Dollar•More Stable Geopolitical Situation•New Low-Cost Air Carriers

•Improving Economy•Weak Dollar•More Stable Geopolitical Situation•New Low-Cost Air Carriers

Leisure Demand

•Strong Citywide Demand18 vs 15 in 2003

•Strong Short Term Pick-upAdded 2 Large Groups (1,500+ on Peak)

•Group Definites at the “Big 6” are 14% above last year

•Strong Citywide Demand18 vs 15 in 2003

•Strong Short Term Pick-upAdded 2 Large Groups (1,500+ on Peak)

•Group Definites at the “Big 6” are 14% above last year

Group Demand

• Courtyard at 88 Exeter – Back Bay – 81 Rooms - April

•Hotel Onyx – N. Station – 112 Rooms – May

•Jurys Doyle – Back Bay – 220 Rooms – June

•Clarion – N. Station – 88 Rooms – June

•Hampton Inn and Suites – Crosstown

– 175 Rooms – June

• Courtyard at 88 Exeter – Back Bay – 81 Rooms - April

•Hotel Onyx – N. Station – 112 Rooms – May

•Jurys Doyle – Back Bay – 220 Rooms – June

•Clarion – N. Station – 88 Rooms – June

•Hampton Inn and Suites – Crosstown

– 175 Rooms – June

Boston/Cambridge New Supply 2004

New Supply 2005-2007

Hotels Rooms2005 1 164

2006 5 1,841

2007 & Beyond

13 4,953

PAG Projections 2004

2003 2004 Change

Occupancy 70.3% 72.3% 2.8%

Average Rate

$152.71 $155.76 2.0%

RevPAR $107.36 $112.61 4.9%

1.6 million square feetThird largest in the Mid Atlantic and Northeast

Grand Opening June 24, 2004Westin Headquarters Hotel Open June 2006

Boston Convention and Exhibition Center

•Closure of the HynesCould be sold July 1, 2006

•Room BlocksBCEC Groups will be required to use Back Bay Hotels

•Marketing Leadership•Facility•Location

The Future Of the Boston Convention Market

Boston is no longer a “Backwater”Completion of the Big Dig is already having a positive effect

World-Class Convention CenterExcellent Transportation Infrastructure

$14.6 Billion on Big Dig$1.2 Billion on Logan Modernization

The Changing Face of Boston

Nationally: the floodgates are wide open

Boston: the gates are still closed

Capital Markets

76 Canal Street Boston, MA 02114 ~ 617/722-9916238 South State Street, Newtown, PA 18940 ~ 215/579-1804

3418 Norfolk Street, Pompano Beach, FL 33062 ~ 954/786-2019

www.pinnacle-advisory.com

PINNACLE ADVISORY GROUP