1. Hotel Valuations and Development Feasibility ULI Fall Conference October 26, 2011 Steve Haggerty – Global Head R.E. & Development Hyatt Hotels & Resorts Michael Barnello – President & CEO LaSalle Hotel Properties Mathew Sparks – SVP Luxury Lodging Hilton Worldwide Karim Alibhai – Founder & Principal The Gencom Group Greg Hartmann, MAI, CHA – Moderator

2. Hotel 101 – The Basics Occupancy, ADR & RevPAR Source: Smith Travel Research

3. U.S. hotel transaction volume to increase to $16B in 2011 Source: Jones Lang LaSalle Hotels. Note: Transactions $10M and above. Excludes land site and casino deals Buy Sell Buy Sell

4. Significant Sales in 2011

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6. U.S. market RevPAR and supply RevPAR performs best during periods of low annual supply increases Source: Smith Travel Research, Jones Lang LaSalle Hotels

7. Lodging REIT Cap Rates – Reflect or Set the Market? Source: Thompson, EDGAR Online, Morningstar, RW Baird, Morgan Stanley, Jones Lang LaSalle Hotels

8. "REIT Cap Rates Likely to Decline in 2009" - April, 09 Hotel News Now (A) "...I believe cap rates based on TTM income are at their high points (in 3/09)" "So whether you are lowering your income on a TTM basis or forecasting 2009, you can safely anticipate most of those cap rates to trend downward through 2010" "Cap Rates Continue Trend Downward in Q-2" - June, 09 HVS Global Report (B) Annual EBITDA will have likely declined year over year by 25% to 30% on average. This would result in another 200-basis-point decline in cap rates from June to December (2009). "Bid/Ask Chasm Created by Buyers and Sellers" - November, 09 Hotel Business (C) “ private equity firms will have to either get comfortable with an 8% or lower cap rate in the short term if they want to buy now or we will likely see the public REITS starting to use their lower cost of capital to buy up those assets …. (long-term) we should see average cap rates remain in the 7 to 8% range. Recognizing Capital Trends - “On the Record ” Back in 2009

9. Capital trends: buyer and seller composition REITs dominate acquisitions of institutional grade assets Source: Jones Lang LaSalle Hotels

10. Capital trends Lodging stock issuance Source: Morgan Stanley

11. Capital trends U.S. hotel CMBS issuance Source: Commercial Mortgage Alert

12. U.S. hotel CMBS loans Source: Morningstar, Jones Lang LaSalle Hotels Hypothetical three-year loan extensions

13. Current market attitudes Flight to quality to primary markets and best-in-class, top tier branded hotels in major secondary markets High High Low Low Pricing Probability Primary market Full service Urban select service Best-in-class Top tier brand Secondary market Full service Select service Best-in-class Top tier brand Secondary market Full service Select service Non-strategic asset Secondary brand Tertiary market Full service Select service Non-strategic asset Top tier and secondary brands

14. Leveraged IRR requirements generally contract Source: Jones Lang LaSalle Hotels’ Hotel Investor Sentiment Survey (April 2011) U.S. average cap rate (initial yield) for new acquisition U.S. average leveraged IRR for new acquisition Cap rates remain lowest in international gateway markets U.S. average: 7.7% U.S. average: 18.4%

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16. Capital trends Hotel DPP sales Source: A. Stanger & Co., Inc., Jones Lang LaSalle Hotels