Market and Feasibility Study of A Proposed Hotel

MARKET AND FEASIBILITY STUDY OF A
PROPOSED HOTEL
Chandler, Texas
Proposed Lodging Facility
Submitted to:
Mr. John Taylor
City of Chandler Texas
811 Highway 31 East, Post Office Box 425
Chandler, Texas 75758
2601 SAGEBRUSH DRIVE, SUITE 101 w FLOWER M OUND, TX w 75028 w (972) 899-5700 w (972) 899-1057 FAX
WWW .USHOTELAPPRAISALS.COM
2601 SAGEBRUSH DRIVE, SUITE 101 w FLOWER M OUND, TX w 75028 w (972) 899-5700 w (972) 899-1057 FAX
WWW .USHOTELAPPRAISALS.COM
June 24, 2011
Mr. John Taylor

City of Chandler Texas
811 Highway 31 East, Post Office Box 425
Chandler, Texas 75758
+1 903 805-4140
Re: Market and Feasibility Study of a Proposed Lodging Facility

Chandler, Texas
Job Reference #: 2011US0316
Dear Mr. Taylor:
Thank you for the opportunity to complete this market and feasibility study of a proposed hotel for the City of Candler.
We have studied the market area for the addition of a lodging facility, and the results of our fieldwork and analysis are
presented in this report. We have also made recommendations for the scope of the proposed project, including
general site location, size of hotel, and brand affiliation. Our report was prepared in accordance with the Uniform
Standards of Professional Appraisal Practice (USPAP), as provided by the Appraisal Foundation.
We hereby certify that we have no undisclosed interest in the property, and our employment and compensation are not
contingent upon our findings. This study is subject to the comments made throughout this report and to all assumptions
and limiting conditions set forth herein.
Sincerely, U.S. Hotel Appraisals, LLC
Kathleen Donahue, Managing Director

State Appraiser License (TX) 1337633G
kdonahue@ushcapp.com, +1 972 890-3548
U.S. HOTEL APPRAISALS
MARKET AND FEASIBILITY STUDY OF A PROPOSED HOTEL CHANDLER, TX
TABLE OF CONTENTS
Chapter Title
1 Executive Summary
2 Neighborhood and Market Area Analysis
3 Hotel Market Trends
4 Review of Proposed Facility
5 Projection of Occupancy and Average Rate
6 Forecast of Income and Expense
7 Cost Feasibility Analysis
8 Assumptions and Limiting Conditions
9 Certification
Addenda
Qualifications
Glossary of Terms
Copy of Engagement Letter
Copy of Smith Travel Research Report and Market Reporting List
TABLE OF CONTENTS
1. EXECUTIVE SUMMARY
Purpose of Market and Feasibility Study
The purpose of this report is to allow the City of Chandler to review the potential performance of a lodging property and
assist in the attraction of developers. Given the technical language used in this report, a Glossary of Terms has been
included in the Addenda section of this report to aid readers.
Scope of Work Performed

All information was collected and analyzed by the staff of U.S. Hotel Appraisals. At the time of this study, the developer
or specific site had yet to be determined. Given the preliminary stage of the potential development project, we have
devised certain recommendations and assumptions illustrated in this report pertaining to the location of the subject site,
as well as to the scope of the potential proposed hotel facility. The Chandler market has been reviewed for the future
operation of a hotel in regards to as access and other relevant location-related factors. The surrounding economic
environment has been reviewed to identify economic and demographic trends that may have an impact on future
demand for hotels. The market for hotel accommodations is investigated, including factors such as purpose of visit,
average length of stay, facilities and amenities, seasonality, daily demand fluctuations, and price sensitivity. An analysis
of existing and proposed competition provides an indication of the current accommodated demand, along with market
penetration, and the degree of competitiveness. Documentation for an occupancy and average rate projection is
derived utilizing a penetration analysis based on an analysis of lodging activity. A detailed projection of income and
expense made in accordance with the Uniform System of Accounts for the Lodging Industry sets forth the anticipated
economic benefits of the subject property. A feasibility analysis is performed which compares the net present value of
the forecast cash flows to an estimated development cost of the recommended hotel. Important dates and inspection
information are presented as follows:
Date of Report: June 24, 2011
Date of Inspection: June 6, 2011
Market Inspection By: Kathleen Donahue
Summary of Market and Hotel Supply

Located eight miles west of Tyler, Chandler benefits from this strategic location in East Texas. The area is well poised for
growth, evidenced new development and the stability of the Tyler economic climate. In addition to the recently
completed Armed Forces Reserve Training Center, the proposed Park of East Texas should bode well for the service
industry of the Chandler community. The proximity of Canton (within 30 miles), which hosts the worlds largest flea
market, is also a favorable attribute for the lodging climate in Chandler. Finally, the significant improvement
transportation routes in the area are expected to fuel growth in Chandler. Currently, there are no lodging properties in
Chandler. Given the lack of hotels in the far west portions of Tyler, there is opportunity for a lodging property in Chandler
to accommodate demand from the demand generators in this area. The market area is further detailed in the
Neighborhood and Market Area Analysis chapter of this report, and the competitive hotel market is detailed in the Hotel
Market Trends Chapter of this report.
Recommendation of Proposed Facility Scope

The specifics of the proposed subject propertys building and scope of facilities and amenities described throughout this
report are based on recommendations of U.S. Hotel Appraisals. Additionally, we have made a recommendation of the
general site area. We recommend that the proposed subject property be developed and operate as a limited-service
hotel, affiliated with a national franchise. Limited-service products generally encompass similar facility programs,
including limited food and beverage operations, a small amount of meeting space, and ancillary facilities. Given the
EXECUTIVE SUMMARY 1-1

limited-service operation and scope of the recommended hotel, we assume that the proposed subject hotel would be
owner-operated. Primary aspects of the recommended site and project analyzed are summarized as follows:
Recommended Property Type: Limited-service lodging facility operating with a national brand
Approximate Required Site Size: 65,000 square feet (1.5 acres)
Approximate Building Size: 28,000 square feet
Recommended Number of Rooms: 65
Recommended Food and Beverage Facilities: Breakfast area
Other Facilities Recommended: Pool, whirlpool, exercise room, guest laundry facility, business
center or lobby workstation, sundries counter or vending area,
ice machine areas
Parking Spaces Recommended: 70
The recommended facility is further detailed in the Review of Proposed Facility chapter of this report
Summary of Findings
This report finds the construction of the recommend lodging facility to be feasible. The following bullet points summarize
feasibility aspects of the proposed subject property within the market.
Economic Feasibility Economic feasibility is evidenced by information related to the project site location;
availability of trained or trainable labor; utilities; rail, air, and road service to the site; and the overall impact of
the project. Overall, the subject propertys construction is deemed feasible due to the hotels planned location
along State Highway 31 and in the eastern portion of Chandler, with easy access to the Tyler market and
regional roadways. The area has an emerging source of demand and the proposed hotel is expected to
capture a healthy share of this demand over the forecast period, noting occupancy levels near the market
average.
Market Feasibility Market feasibility is evidenced by information on the sales organization and management,
nature and extent of market area, marketing plans for sale of project output, extent of competition, and
commitments from customers or brokers. The proposed subject propertys ownership/management entity
would be expected to be well rehearsed in hotel operations. The City of Chandler lacks hotel properties, and
the lack of hotel properties in the fast west portion of Tyler contribute to the feasibility of a property in this
market. The addition of the subject property is considered favorable due to this void. The proposed subject
propertys new construction and favorable condition, as well as the anticipated popular brand affiliation, is
expected to appeal to users of demand generators in this market, particularly the Armed Forces Reserve
Training Center, the proposed The Park of East Texas, and highway travelers (including motorists on the future
extension of Toll Road 49.
Technical Feasibility The technical feasibility of the subject property addresses the suitability of the site for its
intended use, as well as the feasibility of achieving the levels of income projected and the estimated operating
costs. Overall, given the availability of land in the market, the technical feasibility of the subject property is
reasonable. The general location of the subject site and the physical plant has been described in the Review
of Proposed Facility chapter. The projected income and expense levels are illustrated in the Forecast of
Income and Expense chapter.
Financial Feasibility - Financial feasibility can be determined by an opinion on the reliability of the financial
projections and ability of the business to achieve the projected income and cash flow. An assessment of the
cost accounting system, the availability of short-term credit for seasonal business, and the adequacy of raw
materials and supplies are also considered. The subject propertys projection of income has been estimated in

the Forecast of Income and Expense chapter. Overall, the subject propertys construction is deemed feasible
as the estimated income and expense levels represent a profitable operation.
While the project described in this report represents a profitable operation, a potential developer would review the cost
to build the project against implied value. We note that our income and expense projections do not consider any
possible incentives from the City of Chandler; if incentives were offered, this benefit would increase the net present
value. The Cost Feasibility Analysis chapter of this report examines the derived net present value (NPV) against an
estimated cost to build. We note that the site cost and entrepreneurial incentive cannot be determined; however,
given the assumption of relatively low land cost and a motivated developer, we would expect these costs to fall below
the difference replacement cost of the building from the derived net present value.

2. NEIGHBORHOOD AND
MARKET AREA ANALYSIS
The suitability of the land for the operation of a lodging facility is an important consideration affecting the economic
viability of a property and its ultimate feasibility. Factors such as size, topography, access, visibility, and the availability of
utilities have a direct impact on the desirability of a particular site. While the specific site of the proposed subject
property had not been selected at the time of this study, the subject site is expected to be located in the eastern portion
of Chandler and in the county of Henderson, in the state of Texas. Given the lack of a specific site location, flood zone,
zoning, site-specific nuisances or hazards or toxic ground contaminants, and soil conditions were not analyzed. We
assume that all necessary certifications, permits, and approvals will be secured (including an appropriate liquor license if
applicable) and that the subject property will be constructed in accordance with local zoning ordinances, building
codes, and all other applicable regulations. An independent analysis of hazardous waste and soil conditions should also
be completed prior to construction.
It is important to analyze the market in regards to ease of access with respect to regional and local transportation routes
and demand generators. The subject area is readily accessible to a variety of local, county, state, and interstate
highways.
Map of Primary Access Routes
ECONOMIC AND DEMOGRAPHIC TRENDS 2-1

Accessibility and Visibility

Primary regional access to the area is provided by east/west Interstate 20, which extends to such cities as Dallas to the
west and Shreveport, Louisiana to the east. U.S. Highway 69 is another major thoroughfare, providing access to such
cities as Jacksonville to the south and Greenville to the northwest. The subject propertys market is served by a variety of
additional local routes, which are illustrated on the map.
The area enjoys a well-developed network of local roadways, highways, and interstates. While a specific site has not
been determined, the proposed subject property is expected to be located directly off State Highway 31 and is
expected to have adequate signage at the street; thus, the proposed hotel should benefit from very good visibility from
within its local neighborhood. Overall, the subject site is expected to benefit from very good accessibility, and the
proposed hotel is anticipated to enjoy very good visibility attributes.
The proposed subject property will be well served by the Tyler Pounds Regional Airport, which is located approximately
five miles to the northeast of Chandler. From the airport, motorists will follow signs to State Highway 64 and travel west on
this thoroughfare to Farm-to-Market Road (FM) 2661. Motorists will then proceed southbound on State Highway 2661 until
its intersection with State Highway 31. Motorists will then travel west into Chandler, and the site is expected to be
located directly off this roadway. The proposed subject property will also be served by the Dallas/Fort Worth
International Airport, located approximately 100 miles to the northwest of Chandler.
Neighborhood Analysis
The neighborhood surrounding a lodging facility often has an impact on a hotel's status, image, class, style of operation,
and sometimes its ability to attract and properly serve a particular market segment.
The subject neighborhood is generally defined by Chandler city limits. From the intersection of State Highways 31 and
Farm-to-Market Road 315, Chandler city limits generally span one mile to the north, east, south, and west. In general, this
neighborhood is in the stable stage of its life cycle, with pockets of growth occurring in the residential sector. Land use
fronting State Highway 31 is primarily commercial in nature, while residential and other community uses occupy land to
the north and south of this main thoroughfare. Primarily a bedroom community, Chandler is also characterized by
restaurants, a supermarket, gas stations, banks, medical offices, and small shopping centers that contain local stores.

Neighborhood Map
Some specific businesses in the area include Citizens National Bank, Citizens State Bank, Southside Bank, Brookshire's
Food & Pharmacy, and an East Texas Medical Center Regional Healthcare System clinic. Restaurants in the area include
SONIC, Taco Bell, and San Pedro's Mexican Restaurant. The expansion of a senior housing community, SilverLeaf at
Chandler, is under construction in the northwest portion of the city. In general, we would characterize the neighborhood
as 20% office/retail use, 50% residential use, 20% vacant, and 10% other. The proposed subject property's opening should
be a positive influence on the area; the hotel will be in character with and will complement surrounding land uses. In
conclusion, the neighborhood is appropriate for the operation of a lodging facility.

Market Area Analysis

The economic vitality of the market area is an important consideration in forecasting lodging demand. The purpose of
this section is to review available economic and demographic data to determine whether the local market will undergo
economic growth, stabilize, or decline. These trends are then correlated based on their propensity to reflect variations in
lodging demand. Chandler is located in the northeast portion of Henderson County; however, Smith County borders
Henderson County to the east and is considered an important economic indicator for Chandler and the greater East
Texas Market.
Market Area Map and Demand Generators

Demographic Statistics
The following map and table reflects radial demographic trends for the market area measured by three points of
distance (1.0-, 3.0-, and 5.0-mile radius) from a point in the eastern portion of Chandler. The address used for the trend is
500 State Highway 31, Chandler, Texas, 75758.
Map of Demographic Radius

0.00 - 3.00
0.00 - 1.00 miles miles 0.00 - 5.00 miles
Population
2016 Projection 2,463 4,670 9,605
2011 Estimate 2,278 4,347 9,062
2000 Census 1,774 3,483 7,680
1990 Census 1,273 2,587 6,100
Growth 2011-2016 8.12% 7.43% 5.99%

Growth 2000-2011 28.41% 24.81% 17.99%
Growth 1990-2000 39.36% 34.63% 25.90%
Households
2016 Projection 963 1,830 3,739
2011 Estimate 892 1,704 3,516
2000 Census 676 1,335 2,955
1990 Census 439 914 2,219
Growth 2011-2016 7.96% 7.39% 6.34%

Growth 2000-2011 31.95% 27.64% 18.98%
Demographics by Radius (1-, 3-, 5-mile radius)
Growth 1990-2000 53.99% 46.06% 33.17%
Income
2011 Est. Average Household Income $62,665 $60,188 $56,851
2011 Est. Median Household Income 53,360 49,347 45,086
2011 Est. Per Capita Income 24,818 23,810 22,228
2011 Est. Civ Employed Pop 16+ by Occupation 968 1,851 3,943
Architect/Engineer 30 53 80
Arts/Entertain/Sports 3 14 42
Building Grounds Maint 25 59 170
Business/Financial Ops 47 83 129
Community/Soc Svcs 12 25 63
Computer/Mathematical 8 20 60
Construction/Extraction 43 94 246
Edu/Training/Library 75 132 245
Farm/Fish/Forestry 5 8 20
Food Prep/Serving 29 59 144
Health Practitioner/Tec 41 90 226
Healthcare Support 40 72 112
Maintenance Repair 31 64 148
Legal 6 10 17
Life/Phys/Soc Science 2 6 17
Management 101 186 359
Office/Admin Support 154 291 590
Production 63 120 295
Protective Svcs 25 41 65
Sales/Related 137 241 481
Personal Care/Svc 33 56 107
Transportation/Moving 57 129 327
Source: The Nielsen Company

This source reports a population of 2,278 within a one-mile radius of the selected point, and 892 households within this
same radius. Within a three-mile radius, population totals 4,347 with 1,704 households, while total population measures
9,062 and 3,516 households within a five-mile radius. Average household income within a three-mile radius of the subject
property is currently reported at $60,188, while the median is $49,347.
The following map and table reflects demographic trends for the city of Chandler from this same source.
Map of Demographic Area

Total
Population
2015 Projection 2,910
2010 Estimate 2,670
2000 Census 2,099
1990 Census 1,630
Growth 2010-2015 8.99%

Growth 2000-2010 27.20%
Growth 1990-2000 28.77%
Households
2015 Projection 1,136
2010 Estimate 1,033
2000 Census 817
1990 Census 554
Growth 2010-2015 9.97%

Growth 2000-2010 26.44%
Growth 1990-2000 47.47%
Income
2010 Est. Average Household Income $64,683
2010 Est. Median Household Income 54,965
2010 Est. Per Capita Income 25,361
2010 Est. Civ Employed Pop 16+ by Occupation 1,121

Architect/Engineer 16
Arts/Entertain/Sports 3
Building Grounds Maint 28
Demographics City of Chandler
Business/Financial Ops 64
Community/Soc Svcs 14
Computer/Mathematical 9
Construction/Extraction 54
Edu/Training/Library 80
Farm/Fish/Forestry 2
Food Prep/Serving 51
Health Practitioner/Tec 62
Healthcare Support 49
Maintenance Repair 39
Legal 6
Life/Phys/Soc Science 4
Management 109
Office/Admin Support 151
Production 82
Protective Svcs 23
Sales/Related 178
Personal Care/Svc 33
Transportation/Moving 64
Source: The Nielsen Company

This source reports a population of 2,670 within the city. Average household income is currently reported at $64,683,
while the median is $54,965.
According to the City of Chandler, total population within the city measured 2,734 in 2010, reflecting a 38.7% increase
from 2000. The growth of the population for the City of Chandler is illustrated below.
3,000
Chandler 2,734
2,500
Population
Growth 2,000 1,971
1,630
1,500
1,308
1,000
675 715 765
624
500
0
1940 1950 1960 1970 1980 1990 2000 2010
Major Employers and Other Pertinent Economic Indicators

Chandler was originally occupied by Native Americans and other settlers after the entrance of the railroad; the city's
modern-day government was established in 1960. Since 2004, the City has been operated by a council/administrator
form of government. According to the 2010 Census, Chandler has a population of 2,734. Chandler is located directly
north of Lake Palestine, which spans 25,560 acres and is very popular for bass fishing tournaments. Chandler is
strategically located to benefit from its own economic drivers, as well as commerce and tourism from surrounding
communities.
The subject areas economic base is supported by a myriad of industries, including a predominance of the service
sector. Major employers for this market are illustrated in the following table.
Number of
Major Firm/Institution Employees
Employers Chandler Nursing Center 95
Brookshire's Food & Pharmacy 77
Chandler Elementary School 47
Kidd Jones Oil Company 44
Chandler Intermediate School 39
City of Chandler 18
Citizens National bank 14
Source: Chandler Area Economic Development, 2010

The following bullet points highlight major demand generator factors for this market:
Neighboring Chandler to the east, Tyler is the county seat of Smith County and the principal city of the Tyler
Metropolitan Statistical Area. Tyler earns the moniker "Rose Capital of America" because of its large role in the
rose-growing industry; the city also boasts the nation's largest municipal rose garden and hosts the Texas Rose
Festival each October, which draws more than 100,000 spectators. The economic diversity of Tyler is anchored
by the healthcare sector, the headquarters of the Brookshire Grocery Company, and a variety of
manufacturing industries. In early 2010, East Texas Medical Center Tyler completed a $28-million expansion
project. At University of Texas Health Science Center at Tyler (UTHSCT), a $67-million Academic Center is under
construction. In addition to the expansion at UTHSCT, Tyler is home to an Armed Forces Reserve Training Center.
The 123,000-square-foot facility was completed in June of 2011 and is expected to begin accommodating
soldiers in September of 2011. The facility is expected to draw 300 trainees to Tyler three weekends each
month. It is important to note that the proposed subject property would be the closest lodging facility to the
Armed Forces Reserve Training Center in terms of driving distance.
Armed Forces
Reserve Training
Center
The East Texas State Fair Association has purchased 240 acres for the development of The Park of East Texas less
than eight miles to the east of Chandler. The first phase of this development is an equestrian facility that adjoins
a 4,500-seat multi-use events center with exhibit space, an outdoor arena, a parking facility, RV hookups, and a
ten-acre promenade for the annual East Texas State Fair; later phases include an amphitheater and other
facilities. The development may also include a hotel and a boardwalk in future phases. As the future new
home of the East Texas State Fair, this development will create commerce for the market area and will attract
national and regional equestrian shows, national tours, and conventions and trade shows.
Master Plan
The Park of
East Texas

Fewer than 30 miles to the northwest, Canton is a popular flea market location with the famous First Monday
Trade Days, an event that takes place during the four days before the first Monday of each month. This event,
boasted to be one of the largest flea markets in the world, regularly sells out Canton hotels, bed and breakfasts,
RV sites, and campsites. Additionally, hotel demand often spills into surrounding cities during peak months.
Aerial View of
First Monday
Trade Days in
Canton
Highway and interstate travel helps support the communities in this region. Interstate 20 is located roughly 15
miles north of Chandler and is a major east-west interstate in the nation. Passing through Chandler, State
Highway 31 is 153 miles long and extends from U.S. Highway 84 northeast of Waco to U.S. Highway 80 in
Longview. To the north of Chandler, State Highway 64 traverses through Rusk, Smith, and Van Zandt Counties.
Farm-to-Market 315 intersects State Highway 31 in Chandler, extends across Lake Palestine, and connects the
southern portion of Van Zandt County to Anderson County, near the city of Palestine. The Loop 49 toll road is
part of the Texas Department of Transportation's (TxDOT) state-of-the art highway plan to reduce traffic
congestion and improve the local transportation system. To the south of Tyler, the first and second segments of
Toll Road 49 are open. The third and fourth sections, anticipated to be opened in the fall of 2012 and the spring
of 2014, respectively, will eventually connect to Interstate 20 to the north. This future roadway will help expose
Chandler to an increased number of motorists.
Toll Road 49
Current
and Future
Phases

The market benefits from a modest number of tourist and leisure attractions in the area. Winchester Park
features baseball fields, exercise stations, walking paths, and recreation areas for local residents. Spanning
over 25,000 acres, Lake Palestine is very popular for largemouth bass tournaments. In addition, other leisure
demand generators in the greater area include the Tyler Municipal Rose Garden and the Caldwell Zoo. Tyler
hosts several annual events that draw visitors from the surrounding areas. These events include the Texas Rose
Festival, the Rose Parade, Santa Land, and the Penny Nichols-Sanders Annual Spring Art Show. In addition, First
Monday Trade Days in Canton, an event that takes place once a month, sells out all area hotels. There are no
major changes related to these attributes of the market expected in the foreseeable future.
Lake Palestine
While Chandler lacks a significant economic base of its own, the growing city benefits from its location neighboring Tyler.
The location of the new Armed Forces Reserve Training Center in the western portion of Tyler is beneficial to Chandler
because training personnel will seek lodging, food, and other goods. It is evident economic growth slowed because of
the struggling national economy during the most recent recession; however, Tyler benefits from a stable demand base
from healthcare institutions and several deep-rooted corporations. The stability of Canton as a weekend destination,
and the resulting regular sell-outs of hotels in the area, also bodes well for Chandler. It is expected that the greater
market will bounce back along with the national economic recovery.
Total Percent Unemployment Rate

Airport Year Passengers Change Year County State Country
Traffic
2006 152,625 --- 2006 5.2 % 4.9 % 4.6 %
And
2007 152,070 -0.4 % 2007 4.5 4.4 4.6
Unemployment
2008 149,614 -1.6 2008 5.4 4.9 5.8
Statistics
2009 145,270 -2.9 2009 8.2 7.6 9.3
2010 146,091 0.6 2010 8.6(E) 8.2(D) 9.6
Year-to-date through May Recent Month - April

2010 28,397 --- 2010 8.3 % 7.9 % 9.9 %
2011 29,192 2.8 % 2011 8.0 7.7 9.0
*Letters, if shown next to data points, reflect

revised population controls and/or model re-
estimation implemented by the BLS.
Source: Tyler Pounds Municipal Airport Source: U.S. Bureau of Labor Statistics
In 2006, air traffic registered 152,625 passengers; by 2010, this level had changed to 146,091. The change in passenger
traffic between 2009 and 2010 was 0.6%; moreover, a rate of change of 2.8% was registered in the year-to-date period
for 2011, versus the same period in 2010. Tyler Pounds Regional Airport is located approximately five miles outside of
Chandler. The airport offers daily flights to Dallas/Fort Worth and Houston via American Eagle and Continental
Connection, respectively. In 2007, airport officials completed an exhaustive master-planning process to analyze usage
trends and address expansion needs of the facility over the next 20 years. In June of 2009, the City of Tyler announced
that the airport was awarded $5.9 million for extensive rehabilitation as part of the American Recovery and Reinvestment
Act.
The national unemployment rate was 9.6% in 2010, reflecting a 0.3point higher level than 2009. Locally, unemployment
was 8.6(E)% in 2010; for this same area in 2011, the most recent months unemployment rate was registered at 8.0%,
versus 8.3% for the same month in 2010. Unemployment rates in this area increased moderately in 2008, followed by a
more notable increase in 2009, primarily due to the weakening national economy. The most recent comparative period
illustrates that unemployment remains elevated, yet an improving trend is noted. Local employment has remained
stable at entities such as Chandler Nursing Center and Brookshire's Food & Pharmacy. Our interviews with economic
development officials and our research reflect an optimistic outlook as the greater economy is anticipated to emerge
from recessionary conditions noted in 2009.
Governmental and Environmental Factors

The Chandler area is subject to a normal form of local government and is also subject to the laws and regulations of
Henderson County and the state of Texas. None of these laws or government entities was noted to have a particularly
abnormal influence on the operation of the property, its marketability, or property values in the market area. The
environment of the subject propertys city appears normal to its surrounding areas; we observed no adverse conditions
and no such conditions were reported by market representatives. No noted environmental factors have particularly
positive or negative influences on property values in the subjects market area.
Conclusion
We have reviewed and studied various social, economic, government, and environment data and observations
pertaining to Henderson County and the state of Texas. After a period of economic expansion, the greater market area
entered into a period of contraction as the local economy began to experience the challenges felt across the nation
associated with the recession. Our market interviews and research revealed that although the area has been impacted
by slowing business levels, a depressed housing market, and reduced levels of discretionary spending, the greater
market benefits from a well-established, diversified economy. The expanding network of highways, the opening of the
Armed Forces Reserve Training Center, and the continued stability of the healthcare sector and tourism industry should
positively impact the local economy. No adverse governmental or environmental factors were noted. We will relate
these historical and expected growth trends based on their propensity to reflect changes in lodging demand.

3. HOTEL MARKET TRENDS

This chapter will begin with an overview of national lodging demand trends to determine what macro changes have
occurred in this real estate sector. Next, we will provide a definition of the subjects pertinent hotel market and review
each competitive hotel (future competitors). We then provide an analysis and discussion pertaining to the occupancy
and average rate trends of this competitive set.
National Trends Overview

The onset of the recession in December of 2007 first became evident in lodging trends in the spring of 2008 as demand
levels decreased from the peak recorded in the previous year. The pace of decline sped up in the fall of 2008, as both
corporate and consumer spending fell dramatically in the wake of the financial crisis and in response to intensifying
recessionary pressures. Continued increases in lodging supply, which grew by 2.7% in 2008 and 3.2% in 2009, combined
with demand decreases, resulted in a national average occupancy of 55.1% in 2009, an historic low. Aggressive price
cuts and discounting that were implemented in the face of falling occupancy levels caused average rate to decrease
by 8.8% in that same year. The resulting $53.71 RevPAR (Revenue Per Available Room) recorded in 2009 was on par with
the level recorded in 2004.
Demand growth resumed in 2010, led by select markets that had recorded positive growth trends in the fourth quarter of
2009. The pace of demand growth accelerated through the year, and lodging demand in the U.S. increased by 7.7% in
2010 when compared with 2009. A return of business travel and some group activity contributed to these positive trends.
The resurgence in demand was partly fueled by the significant price discounts that were widely available in the first half
of 2010. These discounting policies were largely phased out in the latter half of the year, balancing much of the early
rate loss. Average rate decreased by only 0.1% in 2010 when compared with 2009. Moderate demand growth is fore-
cast for 2011 and thereafter, and the commercial and meeting/group demand segments are expected to continue to
strengthen. These trends, combined with the low levels of supply growth anticipated through 2012, should boost occu-
pancy to above the 60% mark by 2012. Strengthening occupancy levels should permit hotels to further reduce and
eventually eliminate the deep discounts implemented in response to the recession. The net result will be accelerated
rate growth as occupancy nears stabilization.
70 $110
National
68 $100
Occupancy 66
and 64
$90
Average Occupancy 62 $80 Average

Percentage
Rate Trends 60 $70
Rate
58 $60
56
$50
54
52 $40
50 $30
Occupancy Average Rate
Source: STR
HOTEL M ARKET TRENDS 3-1

Occupancy - Thru April Average Rate - Thru April RevPAR - Thru April
2010 2011 % Change 2010 2011 % Change 2010 2011 % Change

U nited States 53.6 % 56.5 % 5.4 % $96.76 $99.72 3.1 % $51.83 $56.31 8.7 %
Region
New England 48.9 % 51.0 % 4.4 % $103.73 $106.74 2.9 % $50.70 $54.44 7.4 %
Middle Atlantic 55.7 57.0 2.4 125.72 131.21 4.4 70.02 74.82 6.9
South Atlantic 56.7 59.8 5.3 101.87 103.62 1.7 57.80 61.93 7.1
East North Central 46.1 49.0 6.1 79.96 81.83 2.3 36.88 40.06 8.6
East South Central 50.2 51.8 3.2 74.03 75.33 1.8 37.14 39.01 5.0
West North Central 46.9 48.7 3.7 75.14 77.38 3.0 35.24 37.65 6.8
Lodging Sector Performance Statistics
West South Central 54.0 57.5 6.5 83.91 86.75 3.4 45.35 49.92 10.1
Mountain 53.5 57.6 7.6 94.95 97.01 2.2 50.81 55.88 10.0
Pacific 58.3 61.9 6.1 109.26 115.14 5.4 63.75 71.24 11.8
Price
Upscale 54.2 % 57.0 % 5.1 % $103.36 $106.09 2.6 % $56.06 $60.48 7.9 %
Midprice 49.4 52.1 5.5 76.34 78.25 2.5 37.72 40.79 8.1
Economy 47.0 49.7 5.6 55.94 56.65 1.3 26.32 28.15 7.0
Budget 49.9 52.7 5.6 45.02 45.90 2.0 22.48 24.21 7.7
Location
Urban 61.5 % 63.7 % 3.6 % $131.09 $136.77 4.3 % $80.62 $87.14 8.1 %
Suburban 53.7 57.1 6.2 82.80 84.68 2.3 44.47 48.31 8.6
Airport 62.4 65.2 4.5 89.46 91.21 2.0 55.80 59.44 6.5
Interstate 45.6 47.9 4.9 67.29 68.60 1.9 30.70 32.84 7.0
Small Metro/Town 44.7
0.0 % 47.2 % 5.5
0.0 % 75.36
$0.00 76.85
$0.00 2.0
0.0 % 33.71
$0.00 36.29
$0.00 7.6
0.0
Chain Scale
Upscale 63.7 % 66.8 % 4.9 % $107.44 $110.87 3.2 % $68.43 $74.10 8.3 %
Mid-scale w/ Food & Beverage 53.8 57.0 6.0 88.88 91.11 2.5 47.84 51.96 8.6
Mid-scale w/o Food & Beverage 47.0 49.5 5.3 71.03 70.70 (0.5) 33.38 34.98 4.8
Economy 47.3 49.8 5.5 46.96 47.43 1.0 22.19 23.64 6.6
Independents 50.0 53.0 6.0 92.91 95.55 2.8 46.42 50.61 9.0
Source: STR - April 2011 Lodging Review
The recommended facility described in this report represents a limited-service lodging facility in a small metro area in the
West South Central Region (other states in this region include Arkansas, Oklahoma, and Louisiana) as categorized by STR.
Additionally, it can be characterized as mid-price property operating under a mid-scale chain affiliation that typically
does not include food and beverage facilities beyond a breakfast area.

Definition of Subject Market

The proposed subject property will be located in Chandler, Texas. In order to review hotels in the greater market
surrounding the proposed subject property, we obtained a list of hotels within a 50-mile radius of the city of Athens from
Smith Travel Research. This list of hotels is included in the Addenda section of this report, along with the specific
competitive trend analyzed for this report. This greater market offers 128 hotels and motels, spanning 7,702 rooms. The
two largest hotels are the 182-room Holiday Inn Tyler South Broadway and the 160-room Ramada Tyler Conference
Center.
Of this larger supply set, the proposed subject property will compete with a smaller set of hotels based on various factors.
These factors may include location, price point, product quality, length of stay (such as an extended-stay focus vs. non-
extended-stay focus), room type (all-suite vs. standard), hotel age, or brand, among other factors. We have reviewed
these pertinent attributes and established a competitive set based upon this review.
In addition to the primary and secondary competitive sets established, we note the presence of other lodging properties
in Canton and Athens. While we expect the subject property to accommodate spillover demand from the Canton
market during peak attendance of flea market events, the distance of Canton nearly 30 miles to the northwest will
prevent these properties from competing for business on a daily basis. Athens is located roughly 25 miles to the west of
Chandler, and it offers a mix of independent and chain-affiliated properties that serve its market.
Within Tyler, our study focused on lodging properties in the south and west portions of this city (generally west of
Broadway Avenue), given the proximity of Chandler to the west and the presence of demand generators in this area
that these hotels and the proposed subject property would be expected to draw demand from. We have selected a
competitive set from these two areas. We note other lodging properties in these areas were not included in our selected
competitive set for varying factors, including extended-stay orientation, lack of brand affiliation, and general poor
condition. Nonetheless, given the proximity, these properties are expected to compete with the proposed subject
property to some degree and have been considered qualitatively in our analysis.
We also note the presence of small motel properties and RV and campground properties around Lake Palestine. These
include JB's RV Resort in Chandler; Lake Palestine Motor Inn, Lake Palestine Resort, SKYTRAQs Resort, and Big Steve's RV
Park and Marina in Frankston; Palestine Pines RV Campground & Marina Park Resort in Tyler; and Trails End RV Camp in
Flint. While the entrance of the subject property may attract some of the visitors to these facilities, these properties are
not considered to be future competitors of the proposed subject property. .
Estimated Segmentation Estimated 2010

Selected
Competitive
p
G ro u
Set of
and
ia l
Hotels
m e rc
Average
ti n g
re
Room Occupancy Average Rate RevPAR

Estimated
L e is u
C om
M ee
Property Count Occupancy Penetration Rate Penetration RevPAR Penetration

Map Key
Operating La Quinta Inn 50 15 35 130 52.0 % 102.6 % $65.00 94.7 % $33.80 97.2 %
Performance Baymont Inn & Suites

Fairfield Inn by Marriott
50
60
10
10
40
30
44
64
50.0
54.0
98.7
106.6
55.00
85.00
80.1
123.8
27.50
45.90
79.1
132.0
Holiday Inn Express 55 5 40 67 53.0 104.6 99.0 144.2 52.47 150.8
Quality Inn Conference Center 45 15 40 140 47.0 92.8 52.0 75.7 24.44 70.3
Totals/Averages 51 % 12 % 37 % 445 50.7 % $68.65 $34.78

Map of Competition
Each competitor was inspected and evaluated; these hotels are described as follows.

La Quinta Inn
The La Quinta Inn is located at 1601 West Southwest Loop 323 in Tyler, Texas, approximately nine miles east of Chandler.
When compared to the planned highway location of the proposed subject property, this competitors accessibility is
considered similar, while its visibility is considered similar. Built in 1983, this property features 130 rooms and appeared to
be in fair condition. The following table illustrates this propertys 2010 operating performance.
Estimated
p
ou
Operating
Gr
d
ial
Performance
an
erc
ng
Occupancy Average Average Rate RevPAR

e
mm
su r
e ti
Penetration
Me
Occupancy Rate Penetration RevPAR Penetration

Co
Lei
50 % 15 % 35 % 52.0 % 102.6 % $65.00 94.7 % $33.80 97.2 %
The La Quinta Inn Tyler is corporately owned and operated. Facilities include a breakfast dining area (a complimentary
breakfast is served), an outdoor pool, and approximately 440 square feet of meeting space. Renovation history of the
hotel, which was built in 1983, was not reported. This hotel benefits from a popular franchise affiliation; however, this
older, exterior-corridor property appears dated and in need of renovations.
Baymont Inn & Suites
The Baymont Inn & Suites is located at 3913 Frankston Highway in Tyler, Texas, approximately nine miles east of Chandler.
When compared to the planned highway location of the proposed subject property, this competitors accessibility is
considered similar, while its visibility is considered similar. Built in 2008, this property features 44 rooms and appeared to
be in very good condition. The following table illustrates this propertys 2010 operating performance.
up
Estimated
Gro
Operating
nd
ial
Performance
e rc
ga
e
e tin
mm

su r
Penetration
Me
Occupancy Rate Penetration RevPAR Penetration

Co
Le i
50 % 10 % 40 % 50.0 % 98.7 % $55.00 80.1 % $27.50 79.1 %
The Baymont Inn & Suites is owned and operated by OM Shri JJB LLC. The hotel offers a breakfast dining area (a
complimentary breakfast is served), an outdoor pool, an exercise room, and a lobby business workstation. The hotel,
which was built in 2008, has not undergone any significant renovations since its opening. This hotel benefits from its
recent construction and affiliation with a national franchise.

Fairfield Inn by Marriott
The Fairfield Inn by Marriott is located at 1945 West Southwest Loop 323 in Tyler, Texas, approximately nine miles east of
Chandler. When compared to the planned highway location of the proposed subject property, this competitors
accessibility is considered similar, while its visibility is considered similar. Built in 1995, this property features 64 rooms and
appeared to be in good condition. The following table illustrates this propertys 2010 operating performance.
Estimated
p
ro u
Operating
dG
ia l
Performance
an
e rc
ng
mm

e ti
sur
Occupancy Penetration Rate Penetration RevPAR Penetration

Me
Co
L ei
60 % 10 % 30 % 54.0 % 106.6 % $85.00 123.8 % $45.90 132.0 %
The Fairfield Inn by Marriott is owned and operated by Tharaldson Lodging. The hotel offers a breakfast dining area (a
complimentary breakfast is served), an indoor pool and whirlpool, an exercise room, and a lobby business workstation.
Renovation history of the hotel, which was built in 1995, was not disclosed. This hotel benefits from its popular Marriott
franchise affiliation.

Secondary Competitors
We have reviewed the proposed subject property's market area and defined a primary competitive set. In our review of
the competitive lodging market, we have identified two hotels that are expected to compete with the proposed subject
property on a secondary level. The Holiday Inn Express & Suites and Quality Inn Conference Center will compete on the
basis of similar guestroom products; however, these hotels are located in the northwest portion of Tyler, near the
intersection of U.S. Highway 69 and Texas 323 Loop. In terms of distance, these hotels are located nearly equidistant
from Chandler as the primary competitors identified; however, the submarket where these hotels are located often
accommodates lower rated demand and is populated with numerous older hotel properties. Given the growth pattern
in the south portion of Tyler, we have deemed the hotels in this area more competitive. Thus, the Holiday Inn Express &
Suites and Quality Inn Conference Center have been considered secondarily competitive.
New Supply
It is important to consider any new hotels that may have an impact on the proposed subject property's operating
performance. According to the City of Chandler Planning Office, no new hotels are expected within the proposed
subject property's neighborhood at this time (aside from the proposed subject property).
Historical Market Performance

Smith Travel Research (STR) is an independent research firm that compiles data on the lodging industry; these figures are
routinely used by typical hotel buyers. STR compiles historical supply and demand data for hotels in the subject
propertys market. The hotels included in the trend report are those described on the previous pages of this report..
Hotels
Open
Included Name of Establishment City & State Zip Code Aff Date Date Rooms
in STR Baymont Tyler Frankston Highway Tyler, TX 75701 Oct 2008 Oct 2008 44
Trend La Quinta Inn Tyler Tyler, TX 75701 Sep 1983 Sep 1983 130
Fairfield Inn Tyler Tyler, TX 75701 Jun 1995 Jun 1995 64
Report Quality Inn Conference Center Tyler Tyler, TX 75702 Apr 2004 Apr 1978 140
Holiday Inn Express & Suites Tyler Tyler, TX 75702 Apr 2000 Apr 2000 67
Total Properties: 5 445
The following table illustrates historical supply and demand data as well as revenue per available room (RevPAR) for the
hotels included in the trend report. RevPAR is calculated by multiplying occupancy by average rate.

Market Year-to-Date Through Average Annual

April
Supply, Compounded
Demand, 2006 2007 2008 2009 2010 2010 2011 Change: '06 - '10
Occupancy, Average # of Rooms 401 401 412 445 445 445 445
and Room Nights Available 146,365 146,365 150,413 162,425 162,425 53,400 53,400
Average
Change 0.0 % 2.8 % 8.0 % 0.0 % 0.0 % 2.6 %
Rate
Trends Occupied Room Nights 99,895 86,392 94,952 92,965 81,606 26,749 27,943
Change (13.5) % 9.9 % (2.1) % (12.2) % 4.5 % (4.9) %
Occupancy 68.3 % 59.0 % 63.1 % 57.2 % 50.2 % 50.1 % 52.3 %

Change (13.5) % 7.0 % (9.3) % (12.2) % 4.5 % (7.4) %
Average Rate $63.23 $74.29 $75.91 $70.76 $68.56 $68.77 $63.69

Change 17.5 % 2.2 % (6.8) % (3.1) % (7.4) % 2.0 %
RevPAR $43.16 $43.85 $47.92 $40.50 $34.45 $34.45 $33.33

Change 1.6 % 9.3 % (15.5) % (14.9) % (3.3) % (5.5) %
Source: Smith Travel Research
We note that hotels are occasionally added to or removed from the STR sample; moreover, not every property reports
data in a consistent and timely manner. Nonetheless, STR data provide the best basis for changes in market trends and
have thus been relied upon in our analysis.
Year-to-Date Through
Historical April
Monthly Month 2006 2007 2008 2009 2010 2010 2011
Occupancy
January 57.7 % 44.4 % 50.3 % 50.6 % 39.9 % 39.9 % 39.3 %
Trends February 66.9 53.6 61.6 62.4 50.0 50.0 53.5
March 75.0 63.4 65.9 65.4 57.0 57.0 60.5
April 70.6 57.6 74.0 69.8 53.6 53.6 56.3
May 68.1 62.0 69.9 61.3 55.9
June 82.5 64.2 67.1 58.7 58.3
July 82.3 65.0 74.1 61.1 53.5
August 77.8 64.3 68.7 60.3 52.9
September 65.0 62.2 74.3 54.7 43.2
October 62.0 62.5 66.0 57.3 51.7
November 59.8 62.1 48.9 46.9 48.2
December 51.3 46.8 40.7 38.8 38.9
Annual Occupancy 68.3 % 59.0 % 63.1 % 57.2 % 50.2 % 50.1 % 52.3 %

Year-to-Date Through
Historical April
Monthly Month 2006 2007 2008 2009 2010 2010 2011

Average January $59.49 $69.79 $73.40 $72.38 $65.55 $65.55 $63.72
Rate February 60.79 70.91 73.34 72.12 70.09 70.09 62.13
Trends March 63.05 73.15 73.34 70.76 68.24 68.24 62.13
April 63.91 75.36 77.51 74.37 70.68 70.68 66.79
May 61.37 75.65 77.58 77.28 69.27
June 59.75 77.70 74.91 72.86 69.81
July 59.63 76.05 76.15 70.75 68.75
August 58.95 74.42 75.14 60.82 67.80
September 67.41 73.73 80.27 69.02 69.53
October 68.18 74.73 77.42 72.06 70.02
November 72.10 75.98 76.08 68.39 67.89
December 68.80 71.31 73.04 65.61 63.28
Annual Average Rate $63.23 $74.29 $75.91 $70.76 $68.56 $68.77 $63.69
Local employers and leisure travelers serve as the primary sources of lodging demand in this area. Following a slight dip
in 2006, lodging demand in the market contracted sharply in 2007 before improving in 2008. Overall, the market
dropped from roughly 101,000 room nights in 2005 to nearly 95,000 room nights by 2008. In 2008 and 2009, demand levels
were supported by travelers seeking lower-rated accommodations during an unfavorable economic climate. When
demand continued to weaken in 2010, occupancy dropped to the low 50s. Demand has rebounded in the year-to-
date period; however, average rate trends have continued to fall. While some local employers slowed production, new
development projects in the area, such as the Academic Center of the UT Health Science Center at Tyler and the
Armed Forces Reserve Training Center, are positive factors for the market. Overall, the outlook for the market is
optimistic.

Forecast of Future Demand Change

Based upon a review of the market dynamics in the subjects competitive environment, we have forecast demand
growth rates. The following table details our projections of market demand growth and available room nights;
occupancy levels for the market are also forecast.
Occupied Room Room Available

Forecast of Year Nights Change Supply Room Nights Change Occupancy Change
Demand
2006 99,895 401 146,365 68.3 %
Growth and
2007 86,392 -13.5 % 401 146,365 0.0 % 59.0 (13.5) %
Market
2008 94,952 9.9 412 150,413 2.8 63.1 7.0
Occupancy
2009 92,965 -2.1 445 162,425 8.0 57.2 (9.3)
2010 81,606 -12.2 445 162,425 0.0 50.2 (12.2)
Year-to-Date Through April
2010 26,749 445 53,400 50.1 %
2011 27,943 4.5 % 445 53,400 0.0 % 52.3 4.5 %
Fiscal Year Ending April

2009/10 82,800 445 162,425 51.0 %
Forecast Fiscal Year Beginning July

2011/12 89,424 8.0 % 445 162,425 0.0 % 55.1 % 8.0 %
2012/13 98,366 10.0 510 186,150 14.6 52.8 (4.0)
2013/14 104,268 6.0 510 186,150 0.0 56.0 6.0
2014/15 108,439 4.0 510 186,150 0.0 58.3 4.0
2015/16 111,692 3.0 510 186,150 0.0 60.0 3.0
2016/17 115,043 3.0 510 186,150 0.0 61.8 3.0
Demand is forecast to change by 8.0% between the trailing twelve-month base year and 2011/12. We expect this
Chandler competitive market to stabilize in 2016/17 with 115,000 accommodated room nights (rounded).
Our occupancy forecast reflects an increase in this market in the first projection year because of recent demand trends
in the year-to-date period, the area's diverse economic base, and the anticipated recovery of the national and local
economies. While the market noted a sizable decrease in occupied room nights during 2010, the data for recent
months suggest that demand has bottomed out and will see growth through the remainder of 2011. Furthermore, our
interviews with market participants indicated that the market area is well poised for growth, in large part because of the
opening of the Armed Forces Reserve Training Center and new roadway projects.
Conclusion
After achieving an occupancy level of 50.2% in the base year, we have forecast the local occupancy level to reach
61.8% by the projection year. Our forecast is supported by this historical hotel market data, primary market data
collected while in the field, trends in the local economy presented in the previous chapter, and our hotel market
evaluation expertise.

4. REVIEW OF PROPOSED FACILITY
The subject property is expected to be a limited-service lodging facility containing the facilities outlined in the following
table as well as the requisite back of the house ancillary facilities.
Expected Opening Year: 2012 Dining Facilities: Breakfast area

Recommended Number of Buildings: One
Improvements Number of Stories: Three Meeting Space: 500 square feet
Characteristics Building Square Feet: 28,000

Parking Spaces: 70 Amenities: Pool, whirlpool, exercise room,
guest laundry facility, business
center or lobby workstation,
Guestroom Type Breakdown: sundries counter or vending
area, ice machine areas
King Rooms: 20
Double/Double Rooms: 40
Suites: 5
Total: 65
Franchise and Management Recommendations

We recommend that the proposed subject property be developed and operate as a limited-service hotel. We note
that the potential brand would be subject to location and impact analysis of the franchisor if the brand is already
represented in the greater market. From a review of the lodging market, brands within the limited-service category not
already represented in the west portion of Tyler include Comfort Inn, Econo Lodge, Red Roof Inn, Rodeway Inn, Sleep
Inn, and Travelodge. Limited-service products generally encompass similar facility programs, including limited food and
beverage operations, a small amount of meeting space, and ancillary facilities. As such, it is our opinion the designation
of a specific brand is pertinent to this study. Given the limited-service operation and scope of the recommended hotel,
we assume that the proposed subject hotel would be owner-operated.
Site Improvements, Entry, Lobby, Structure, & Vertical Access

Once guests enter the site, ample parking should be available on the surface lot around the perimeter of the hotel. Site
improvements should include free-standing signage, which should be located on the sides of the site with roadway
frontage (additional signage should be placed on the exterior of the building). We assume that all signage will
adequately identify the property and meet the to-be-determined brand standards. Planned landscaping should allow
for a positive guest impression and competitive exterior appearance. Sidewalks should be present along the front
entrance and around the perimeter of the hotel. Overall, the site improvements for the property should reflect an
appropriate look and feel for a hotel in a suburban location.
The hotel structure should comprise one single building, which is likely to be constructed of a timber frame. The exterior
of the hotel should be finished with an attractive building material, such as stucco, brick, or stone. Stairways and an
elevator will provide internal vertical transportation within the main structure as needed. The hotel's roof should be
constructed consistent with the concept of the building construction. The installation of double-paned windows will
reduce noise transmission into the rooms. Heating and cooling should be provided by individual in-room systems and
several large units for the public areas. Overall, the building components should meet prototype development
specifications set forth by the chosen brand. We assume that this type of limited-service hotel will meet the standards for
this market and should complement existing nearby improvements. We assume that all structural components will meet
local building codes and that no significant defaults will occur during construction that may impact the future operating
potential of the hotel or delay its assumed opening date.
DESCRIPTION OF THE PROPOSED PROJECT 4-1

Other Public Areas

We have assumed the future development of a limited-service hotel facility. Although facility programs and
development specifications may differ among brands and facilities being considered, the limited-service programming
development specifications are generally consistent. Guests should enter the hotel through a single set of automatic
doors, which will open to a small vestibule, and then through a second set of automatic doors. The lobby dcor should
be attractively finished and in line with brand standards. The front desk should feature a stone countertop and should
be installed with appropriate property management and telephone systems. The furnishings and finishes in this space
should offer an appropriate first impression, and the design of the space should lend itself to adequate efficiency. We
assume that all property management and guestroom technology will be appropriately installed for the effective
management of hotel operations.
The hotels breakfast dining area should be located within or adjacent to the lobby, which is appropriate for this type of
hotel. The furnishings of the space are expected to be of a similar style and finish as lobby and guestroom furnishings.
Windows and a mounted television should further enhance the look and functionality of the room.
The hotel should offer one meeting room located near the lobby on the first floor. The meeting space should be
appropriate for a hotel of this type and is expected to meet brand standards. Public restrooms near the entrance to the
meeting space should enhance the overall functionality of the area.
The hotel should offer a pool, a whirlpool, and an exercise room as recreational facilities. Other amenities should include
a small business center or lobby workstation, a guest laundry room, a small sundries counter or a vending area, and ice
machines on each floor. Overall, the supporting facilities should be appropriate for a hotel of this type, and we assume
that they will meet brand standards.
Guestrooms
The hotel is expected to feature standard and suite-style configurations, and guestrooms should be present on all levels
of the property within the single building. The guestrooms should offer typical amenities for this product tier. In addition
to the standard furnishings, rooms should feature an iron and ironing board and a coffeemaker. All guestrooms should
provide high-speed, wireless Internet access. Suites, which will be available for a premium rate, should feature a larger
living area, as well as a microwave and small refrigerator. Overall, the guestrooms should offer a competitive product
for this neighborhood.
Guestroom bathrooms should be of a standard size, with a shower-in-tub, commode, and single sink with vanity area,
featuring a stone countertop. The floors are anticipated to be finished with tile, and the walls should be finished with
knockdown texture or vinyl wall-covering. Bathrooms should feature a hairdryer and complimentary toiletries. Overall,
the bathroom design is expected to be appropriate for a product of this type.
The interior guestroom corridors should be wide and functional, permitting the easy passage of housekeeping carts.
Corridor carpet, wall covering, signage, and lighting are expected to be in keeping with the overall look and design of
the rest of the property.
Support Areas and Engineering Systems

The hotel is expected to be served by the necessary back-of-the-house space, including an in-house laundry facility,
administrative offices, and a small kitchen to serve the needs of the proposed property's complimentary breakfast
operation. These spaces should be adequate for a hotel of this type and should allow for the efficient operation of the
property under competent management.
We assume that the property will be built according to all pertinent codes and brand standards. Moreover, we assume
its construction will not create any environmental hazards (such as mold) and that the property will fully comply with the
Americans with Disabilities Act.

Capital Expenditures
Our analysis assumes that, after its opening, the hotel will require ongoing upgrades and periodic renovations in order to
maintain its competitive level in this market. These costs should be adequately funded by the forecasted reserve for
replacement, as long as a successful, ongoing preventive-maintenance program is employed by hotel staff.
Conclusion
Overall, the subject property should offer a well-designed, functional layout of support areas and guestrooms. All typical
and market-appropriate features and amenities should be included in the hotel's design. We assume that the building
will be fully open and operational on the assumed opening date and will meet all local building codes and brand
standards. Furthermore, we assume that the hotel staff will be adequately trained to allow for a successful opening and
that pre-marketing efforts will have introduced the product to major local accounts at least six months in advance of the
opening date.

5. PROJECTION OF OCCUPANCY
AND AVERAGE RATE
Along with average rate results, the occupancy levels achieved by a hotel are the foundation of the property's financial
performance and market value. Most of a lodging facility's other revenue sources (such as food, beverages, and
telephone income) are driven by the number of guests, and many expense levels also vary with occupancy.
Consequently, a well-documented forecast of occupancy is essential. To a certain degree, occupancy attainment can
be manipulated by management. For example, hotel operators may choose to lower rates in an effort to maximize
occupancy. Our forecasts reflect an operating strategy that we believe would be implemented by a competent hotel
management team to achieve an optimal mix of occupancy and average rate.
Projection of Occupancy
The subjects occupancy has been projected using a penetration analysis. The next table illustrates the historical and
projected change in market-wide occupancy (see Hotel Market Trends chapter for discussion), as well as the proposed
subjects projected penetration levels and resulting occupancy forecast.
Marketwide Est. Subject Subject Subject

Occupancy Hotel Occupied Available Property
Projection Year Occupancy Room Nights Room Nights Occupancy Penetration
2008 63.1 %
2009 57.2
2010 50.2

2009/10 51.0 %

2011/12 55.1 %
2012/13 52.8 11,283 23,725 48 % 90.0 %
2013/14 56.0 12,359 23,725 52 93.0
2014/15 58.3 13,268 23,725 56 96.0
2015/16 60.0 14,093 23,725 59 99.0
2016/17 61.8 14,516 23,725 61 99.0
Our occupancy forecast for the proposed subject property reflects the strengthening of the hotel to a market-
appropriate penetration level. Chandler neighbors Tyler to the west and is near major demand generators, such as the
Armed Forces Reserve Training Center, and the proposed subject hotel's product should be popular with users
associated with these entities. We note that the penetration level is expected to remain below the market average
through the projection period given the competitive set's superior proximity to retail and restaurant uses. Overall, our
forecast position reflects the proposed hotel's expected quality and facility scope, its locational attributes, and an
anticipated brand affiliation. Therefore, we expect the hotel to achieve a penetration level of 90.0% in 2012/13 and
93.0% in 2013/14, before stabilizing at a penetration level of 99.0% in 2016/17 and beyond. This correlates to a rounded
occupancy level of 61% by the stabilized year.
OCCUPANCY AND AVERAGE RATE PROJECTION 5-1

Projection of Average Rate

The subject's average rate has also been projected using a penetration analysis. The following table illustrates the
historical and projected market-wide average rate, as well as the subject's average rate forecast.
Marketwide Est. Subject Subject Est. Subject

Average
Hotel Occupied Rooms Property
Rate
Year Average Rate Change Room Nights Revenue Average Rate Penetration
Projection
2008 $75.91
2009 70.76 -6.8 %
2010 68.56 -3.1

2009/10 $66.85

2011/12 $65.51 -2.0 %
2012/13 68.13 4.0 11,283 $730,305 $64.72 95.0 %
2013/14 71.54 5.0 12,359 848,765 68.68 96.0
2014/15 74.40 4.0 13,268 957,509 72.17 97.0
2015/16 76.63 3.0 14,093 1,069,165 75.87 99.0
2016/17 78.93 3.0 14,516 1,134,277 78.14 99.0
After experiencing rate growth from 2006 through 2008, market rates deteriorated in 2009 and 2010. Rates have
continued to contract in the 2011 year-to-date period, indicating a bottom point has not been reached. We expect
market rate to note an overall contraction in the first projection year, with rate trends noting a positive performance by
the end of this period. The recovery in demand trends, the improved economic climate, and the entrance of new
supply should help fuel expansions in average rate through the remainder of the period.
We have forecast average rate for the market to change by -2.0% in 2011/12, 4.0% in 2012/13, before increasing by 5.0%
in the third projection year. Beyond the fourth year, we anticipate that average rate will increase by 3.0% annually (the
underlying rate of inflationary growth).
Given the hotel's new construction, we would expect the hotel to open in this location with a strong room rate. Because
of the need to introduce the hotel to local users, we have ramped up its average rate penetration level over five years
to an appropriate stabilized point. At this time, the hotel should be able to maintain a rate that appropriately reflects its
expected quality and product type.

Projection of RevPAR
We calculated both the markets and the subject propertys RevPAR using the projected occupancy and average room
rates presented previously. These RevPAR levels are illustrated in the following table.
Marketwide Subject
RevPAR Hotel Property RevPAR
Projection Year RevPAR Change RevPAR Change Penetration
2008 $47.92
2009 40.50 (15.5) %
2010 34.45 (14.9)
2009/10 $34.08

2011/12 $36.07 5.8 %
2012/13 36.00 (0.2) $30.78 85.5 %
2013/14 40.07 11.3 35.78 16.2 % 89.3
2014/15 43.34 8.2 40.36 12.8 93.1
2015/16 45.98 6.1 45.06 11.7 98.0
2016/17 48.78 6.1 47.81 6.1 98.0
Our forecast data illustrates a 98.0% stabilized RevPAR penetration level for the subject property. This level is supported
by the illustrated occupancy and average forecasts presented and the supporting assumptions discussed for each
respective forecast.

6. FORECAST OF INCOME AND EXPENSE
In this chapter of our report, we have compiled a forecast of income and expense for the proposed subject property.
This forecast is based on the facilities program set forth previously, as well as the occupancy and average rate forecast
discussed previously.
The Projection of Occupancy and Average Rate chapter presented a full forecast of the proposed hotels expected
occupancy and average rate level. For the purpose of forecasting the hotels remaining revenue sources and expense
categories, we have reviewed actual operating statements from other similar hotels, as well as national averages as
provided by the HOST Report.
Comparable Operating Data

Because of the lack of proposed nature of the subject property, we have positioned expenses based on our industry
knowledge and a review of comparable operating statements. The following comparable operating statements from
similar scope of service properties are from our database of hotel statistics and were also used in our formulation of the
subject property's projections. While these statements are not from the established competitive set, they represent
properties of a similar scope as the recommended subject property, including brand representation from national
brands such as Comfort Inn, Super 8, and Sleep Inn.
This data is presented in four tables:
1. Percent of revenue
2. Amounts per occupied room
3. Amounts per available room
4. Composite statement
Following this data, we have presented additional, nationwide operating statistics as provided by STRs most recent HOST
Report.
FORECAST OF I NCOME AND EXPENSE 6-1

Comp 1 Comp 2 Comp 3 Comp 4 Comp 5 Comp 6
Year: 2010 2009 2008 2008 2010 2010

Number of Rooms: 50 to 70 60 to 90 60 to 80 80 to 110 50 to 70 60 to 80
Days Open: 365 365 366 366 365 365
Occupancy: 62% 63% 65% 67% 63% 64%
Average Rate: $73 $61 $63 $66 $74 $69
RevPAR: $45 $38 $41 $44 $47 $44
REVENUE
Rooms 98.5 % 100.0 % 100.0 % 98.2 % 99.2 % 99.1 %
Other Operated Departments 1.5 0.0 0.0 1.8 0.8 0.9
Total 100.0 100.0 100.0 100.0 100.0 100.0
DEPARTMENTAL EXPENSES*
Rooms 24.7 12.7 15.7 26.7 26.9 26.6
Total 25.3 17.9 15.7 27.8 27.7 27.0
DEPARTMENTAL INCOME 74.7 82.1 84.3 72.2 72.3 73.0
OPERATING EXPENSES
Administrative & General 10.6 11.1 11.8 6.7 13.2 11.3
Marketing 2.6 1.2 3.4 3.4 2.5 3.3
Franchise Fee 7.6 11.3 6.6 5.9 7.3 7.3
Property Operations & Maintenance 5.6 4.2 3.0 4.2 3.8 4.6
Percent of Revenue
Utilities 5.6 8.1 7.3 6.0 4.2 4.4

Total 32.0 35.9 32.2 26.3 31.0 30.9
HOUSE PROFIT 42.7 46.2 52.1 45.9 41.3 42.1
Management Fee 3.2 0.2 0.0 2.8 3.3 3.3
INCOME BEFORE FIXED CHARGES 39.5 46.0 52.1 43.2 38.0 38.8
FIXED EXPENSES
Property Taxes 3.0 0.2 3.2 4.2 8.6 5.3
Insurance 1.0 2.8 0.8 1.1 0.8 0.9
Miscellaneous Fixed Expenses (0.2) 0.7 0.0 0.0 (0.1) (0.1)
Reserve for Replacement 4.0 0.0 0.0 0.0 4.0 4.0
Total 7.8 3.7 4.0 5.3 13.3 10.1
NET INCOME 31.7 % 42.3 % 48.1 % 37.9 % 24.7 % 28.7 %
* Departmental expense ratios are expressed as a percentage of departmental revenues

Year: 2010 2009 2008 2008 2010 2010

Days Open: 365 365 366 366 365 365
Occupancy: 62% 63% 65% 67% 63% 64%
Average Rate: $73 $61 $63 $66 $74 $69
RevPAR: $45 $38 $41 $44 $47 $44
REVENUE
Rooms $16,426 $13,960 $14,881 $16,182 $17,036 $16,130
Other Operated Departments 246 0 0 303 143 145
Total 16,672 13,960 14,881 16,485 17,179 16,275
DEPARTMENTAL EXPENSES
Rooms 4,049 1,773 2,343 4,323 4,589 4,290
Other Operated Departments 164 453 0 253 161 101
Amounts per Available Room
Total 4,213 2,493 2,343 4,576 4,750 4,391

DEPARTMENTAL INCOME 12,459 11,467 12,537 11,909 12,429 11,884
OPERATING EXPENSES
Administrative & General 1,770 1,547 1,761 1,111 2,268 1,841
Marketing 426 173 507 566 429 536
Franchise Fee 1,262 1,573 985 970 1,250 1,188
Property Operations & Maintenance 934 587 448 697 661 754
Utilities 934 1,133 1,090 990 714 710
Total 5,328 5,013 4,791 4,333 5,321 5,029
HOUSE PROFIT 7,131 6,454 7,746 7,576 7,108 6,855
Management Fee 541 27 0 455 571 536
INCOME BEFORE FIXED CHARGES 6,590 6,427 7,746 7,121 6,536 6,319
FIXED EXPENSES
Property Taxes 508 27 478 697 1,482 870
Insurance 164 387 119 182 143 145
Miscellaneous Fixed Expenses (33) 93 0 0 (18) (14)
Reserve for Replacement 672 0 0 0 679 652
Total 1,311 507 597 879 2,286 1,652
NET INCOME $5,279 $5,920 $7,149 $6,242 $4,250 $4,667

Year: 2010 2009 2008 2008 2010 2010

Days Open: 365 365 366 366 365 365
Occupancy: 62% 63% 65% 67% 63% 64%
Average Rate: $73 $61 $63 $66 $74 $69
RevPAR: $45 $38 $41 $44 $47 $44
REVENUE
Rooms $73.06 $61.10 $62.51 $66.45 $73.50 $69.01
Total 74.15 61.10 62.51 67.69 74.12 69.63
Rooms 18.01 7.76 9.84 17.75 19.80 18.35
Amounts per Occupied Room

Total 18.74 10.91 9.84 18.79 20.49 18.79
DEPARTMENTAL INCOME 55.41 50.18 52.67 48.90 53.63 50.85
OPERATING EXPENSES
Administrative & General 7.87 6.77 7.40 4.56 9.79 7.87
Marketing 1.90 0.76 2.13 2.32 1.85 2.29
Franchise Fee 5.61 6.89 4.14 3.98 5.39 5.08
Property Operations & Maintenance 4.16 2.57 1.88 2.86 2.85 3.22
Utilities 4.16 4.96 4.58 4.06 3.08 3.04
Total 23.70 21.94 20.13 17.79 22.96 21.52
HOUSE PROFIT 31.72 28.24 32.54 31.11 30.67 29.33
Management Fee 2.41 0.12 0.00 1.87 2.47 2.29
INCOME BEFORE FIXED CHARGES 29.31 28.13 32.54 29.24 28.20 27.04
FIXED EXPENSES
Property Taxes 2.26 0.12 2.01 2.86 6.39 3.72
Insurance 0.73 1.69 0.50 0.75 0.62 0.62
Miscellaneous Fixed Expenses (0.15) 0.41 0.00 0.00 (0.08) (0.06)
Reserve for Replacement 2.99 0.00 0.00 0.00 2.93 2.79
Total 5.83 2.22 2.51 3.61 9.86 7.07
NET INCOME $23.48 $25.91 $30.03 $25.63 $18.34 $19.97

Number of Rooms: 427

Days Open: 365
Occupancy: 64.2% Amount per Amount per
Average Rate: $67.14 Percentage Available Occupied
RevPAR: $43.08 of Revenue Room Room
REVENUE
Rooms $6,715 99.1 % $15,726 $67.14
Other Operated Departments 63 0.9 148 0.63
Total 6,778 100.0 15,874 67.77
Rooms 1,518 22.6 3,555 15.18
Other Operated Departments 85 134.9 199 0.85
Total 1,623 23.9 3,801 16.23
DEPARTMENTAL INCOME 5,155 76.1 12,073 51.54
OPERATING EXPENSES
Administrative & General 706 10.4 1,653 7.06
Marketing 190 2.8 445 1.90
Composite Statement
Franchise Fee 509 7.5 1,192 5.09

Property Operations & Maintenance 289 4.3 677 2.89
Utilities 402 5.9 941 4.02
Total 2,096 30.9 4,909 20.96
HOUSE PROFIT 3,059 45.1 7,164 30.58
Management Fee 149 2.2 349 1.49
INCOME BEFORE FIXED CHARGES 2,910 42.9 6,815 29.10
FIXED EXPENSES
Property Taxes 277 4.1 649 2.77
Insurance 83 1.2 194 0.83
Miscellaneous Fixed Expenses 3 0.0 7 0.03
Reserve for Replacement 124 1.8 290 1.24
Total 487 7.2 1,141 4.87
NET INCOME $2,423 35.7 % $5,674 $24.23
We have also reviewed composite income and expense statements from the Smith Travel Research HOST Report. These
statements were considered in our forecast of income and expense.

Total U.S. Chain-Affiliated

Occupancy 67.2% 67.2%
Rooms 118 118
Average Rate $101.10 $98.83
RevPAR $67.94 $66.41
REVENUE % PAR POR % PAR POR %

Rooms 96.5% $24,199 $101.10 96.8% $23,781 $98.84 98.5%
Telephone 0.3% 68 0.28 0.3% 64 0.26 0.2%
Minor Operated Departments 1.6% 398 1.66 1.6% 381 1.58 0.4%
Rentals & Other Income 1.7% 416 1.74 1.4% 352 1.46 0.9%
Cancellation 0.0% 7 0.03 0.0% 7 0.03 0.0%
Total Revenue 100.0% $25,088 $104.81 100.0% $24,585 $102.17 100.0%
Rooms 22.9% 5,544 23.16 22.5% 5,342 22.20 24.2%
Telephone 266.4% 181 0.76 277.9% 177 0.74 556.8%
Other Departmental Expenses 1.6% 393 1.64 1.5% 379 1.57 0.7%
Total Departmental Expenses 24.4% $6,118 $25.56 24.0% $5,898 $24.51 25.4%
Total Departmental Profit 75.6% $18,970 $79.25 76.0% $18,687 $77.66 74.6%
UNDISTRIBUTED OPERATING EXPENSES

Administrativ e & General 9.0% 2,254 9.42 8.9% 2,183 9.07 9.5%
Marketing 5.3% 1,329 5.55 5.2% 1,286 5.34 4.7%
Franchise Fees 2.5% 629 2.63 2.7% 656 2.73 3.9%
Energy 5.0% 1,252 5.23 5.0% 1,235 5.13 5.5%
STR 2009 Host Report
Property Operations & Maintenance 5.2% 1,293 5.40 5.1% 1,260 5.24 5.7%
Total Undistributed Operating Expenses 27.0% $6,757 $28.23 26.9% $6,620 $27.51 29.3%
GROSS OPERATING PROFIT 48.6% 12,213 $51.02 49.1% 12,067 $50.15 45.3%
Management Fees 3.2% 807 $3.37 3.2% $788 $3.27 2.9%

INCOME BEFORE FIXED CHARGES 45.4% $11,406 $47.65 45.9% $11,279 $46.88 42.4%
Property Taxes 4.3% 1,073 4.48 4.3% 1,046 4.35 4.0%

Insurance 1.2% 300 1.25 1.2% 286 1.19 1.3%
Reserv e for Replacement 1.5% 381 1.59 1.5% 377 1.57 1.4%
Total Fixed Charges 7.0% $1,754 $7.32 7.0% $1,709 $7.11 6.7%
AMOUNT AVAILABLE FOR DEBT SERVICE

& OTHER FIXED CHARGES 38.4% $9,652 $40.33 38.9% $9,570 $39.77 35.7%
Inflation Assumption
A general rate of inflation must be established that will be applied to most revenue and expense categories. A Wall
Street Journal survey found on average financial analysts who were surveyed in early-2011 anticipated inflation rates
ranging from 0.7% to 3.1% (on an annualized basis) for the six-month period ending June of 2011. The average estimate
was 1.9%; the same group forecast 1.3% inflation for the six-month period ending December of 2010, and the actual
inflation rate during this period was 1.6%.
As a further check on these inflation projections, we have reviewed historical increases in the Consumer Price Index (CPI-
U). Between 2000 and 2010, the national CPI increased at an average annual compounded rate of 2.4%, and from 2005
to 2010, the CPI rose by a modestly lower average annual compounded rate of 2.2%. In 2010, the CPI increased by
1.6%, in comparison to the -0.4% and 2.8% recorded in 2008 and 2009, respectively. In consideration of the most recent

trends, the projections set forth above, and our assessment of probable property appreciation levels, we have applied
an underlying inflation rate of 3.0% throughout our projection period.
Adjusted Historical Year Statement and Forecast of Income and Expense

The adjusted historical year statement and the forecast of income and expense are intended to reflect our opinion of
how a typical buyer would analyze the subject property's historical operating results and project its future activity. Based
on the market for hotel accommodations in the subjects market area and the anticipated position of the subject
property in its identified competitive market, we have developed an adjusted historical year statement and a forecast
of income and expense. Important points are as follows:
The forecast begins on July 1, 2012, in current value dollars for each year. The rooms revenue forecast is based on
the occupancy and average rate projection presented in the Projection of Occupancy and Average Rate
chapter.
The proposed subject property is not expected to offer a significant food and beverage operation.
Other operated departments and rentals and other income are expected to be muted sources of income for this
proposed property. According to the comparable operating statements, comparables in the other operated
departments category show revenue collections ranging from $0.62 to $1.24 on a per-occupied-room basis with
$0.63 as an average.
Rooms expense is positioned at $14.00 per occupied room in the base year and is forecast to increase moderately
throughout the projection period. The hotel stabilizes with a 21.0% expense ratio in this department; telephone
expense remains relatively stable. The selected comparable operating data supports this level of expense.
The comparables illustrated other operated departments expense ranging between 66.7% and 112.5 % of other
income.
Undistributed operating expenses are positioned in the base year based upon comparable operating statements
and the expected facility offering and revenue level of this proposed property.
The composite result for administrative & general expenses of the comparable operations equated to
$1,653 per available room (or 10.4% of total revenue) for this expense, with a range from 6.7% to 13.2 % of
total revenue.
Franchise expense is positioned at 8.5% of rooms revenue which reflects a typical franchise fee for both
royalty and marketing assessments for a limited-service brand. Beyond the cost of the franchise, other on-
site marketing efforts reflected in the marketing expense line item are forecast to be $20,000 by the
stabilized year.
The composite result for marketing expense of the comparable operations equated to $445 per available
room (or 2.8% of total revenue) for this expense, with a range from 1.2% to 3.4 % of total revenue.
The comparable operations indicated an average utilities expense of $941 per available room, ranging
from $710 to $1,133
The comparable operations indicated an average property operations and maintenance expense of $677
per available room, ranging from $448 to $934 .
Given the relatively limited scope of the proposed subject property's operations, we have assumed that it would
typically be managed by an owner/operator. Therefore, we have not included a third-party management fee in
our projections.
The subject propertys future assessment has been based on a review of comparable assessments in the area. This
comparable data, assessment history, and property tax burden forecast is illustrated in the following table.

Property Tax Forecast

Real Real Property Total
Year Property Tax Rate Taxes
Positioned $2,600,000 2.1035 $54,691
2012/13 $2,600,000 0.0 % 2.1035 0.0 % $54,691 0.0 %

2013/14 2,600,000 0.0 2.1035 0.0 54,691 0.0
2014/15 2,600,000 0.0 2.1035 0.0 54,691 0.0
Real Real Per

Tax Comps
Property Rooms Room

Positioned Subject $2,600,000 65 $40,000
Holiday Inn Express Athens 3,141,900 66 47,605
Quality Inn & Suites Athens 1,459,030 113 12,912
Insurance expense is positioned at an appropriate level based on our review of comparable data and experience
in this industry. The comparable properties we identified indicated a range of $119 to $387 per available room.
Reserve is positioned at 4.0% of total revenues considered appropriate for a hotel of this age, brand name, and
average rate level. If applicable, this is ramped-up during the first several projection years.
The following table illustrates our five-year forecast of income and expense.

Positioned Base Yr. (As If Stabilized) 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22
Number of Rooms: 65 65 65 65 65 65 65 65 65 65 65
Occupied Rooms: 14,472 11,283 12,359 13,268 14,093 14,516 14,516 14,516 14,516 14,516 14,516
Positioned Base Year and Forecast
Days Open: 365 365 365 365 365 365 365 365 365 365 365
Occupancy: 61.0% 48.0% 52.0% 56.0% 59.0% 61.0% 61.0% 61.0% 61.0% 61.0% 61.0%
Average Rate: $67.41 % of Per Occ. Per. Avail. $64.72 % of $68.68 % of $72.17 % of $75.87 % of $78.14 % of $80.49 % of $82.90 % of $85.39 % of $87.95 % of $90.59 % of
RevPAR: $41.12 Rev. Room Room $30.78 Rev. $35.78 Rev. $40.36 Rev. $44.76 Rev. $47.67 Rev. $49.10 Rev. $50.57 Rev. $52.09 Rev. $53.65 Rev. $55.26 Rev.
REVENUE
Rooms $976 99.7 % 67.41 15,008 $730 99.6 % $849 99.7 % $958 99.7 % $1,069 99.7 % $1,134 99.7 % $1,168 99.7 % $1,203 99.7 % $1,239 99.7 % $1,277 99.7 % $1,315 99.7 %
Other Operated Departments 2 0.2 0.14 31 2 0.2 2 0.2 2 0.2 2 0.2 2 0.2 2 0.2 2 0.2 2 0.2 2 0.2 2 0.2
Rentals & Other Income 1 0.1 0.07 15 1 0.1 1 0.1 1 0.1 1 0.1 1 0.1 1 0.1 1 0.1 1 0.1 1 0.1 1 0.1
Total 979 100.0 67.61 15,054 733 100.0 851 100.0 960 100.0 1,072 100.0 1,137 100.0 1,171 100.0 1,206 100.0 1,243 100.0 1,280 100.0 1,318 100.0
Rooms 203 20.8 14.00 3,117 177 24.3 183 21.5 201 21.0 225 21.0 238 21.0 246 21.0 253 21.0 260 21.0 268 21.0 276 21.0
Other Operated Departments 7 350.0 0.48 108 6 350.0 6 350.0 6 350.0 7 350.0 7 350.0 7 350.0 7 350.0 8 350.0 8 350.0 8 350.0
Total 210 21.4 14.48 3,225 183 25.0 189 22.2 208 21.6 231 21.6 245 21.6 253 21.6 260 21.6 268 21.6 276 21.6 284 21.6
DEPT. INCOME 769 78.6 53.13 11,829 550 75.0 663 77.8 753 78.4 841 78.4 892 78.4 919 78.4 946 78.4 975 78.4 1,004 78.4 1,034 78.4
OPERATING EXPENSES
Administrative & General 105 10.7 7.26 1,615 92 12.5 95 11.1 97 10.2 100 9.4 103 9.1 107 9.1 110 9.1 113 9.1 116 9.1 120 9.1
Marketing 20 2.0 1.38 308 18 2.4 18 2.1 19 1.9 19 1.8 20 1.7 20 1.7 21 1.7 22 1.7 22 1.7 23 1.7
Franchise Fee 83 8.5 5.73 1,276 62 8.5 72 8.5 81 8.5 91 8.5 96 8.5 99 8.5 102 8.5 105 8.5 109 8.5 112 8.5
Prop. Operations & Maint. 45 4.6 3.11 692 39 5.4 41 4.8 42 4.4 43 4.0 44 3.9 46 3.9 47 3.9 48 3.9 50 3.9 51 3.9
Utilities 75 7.7 5.18 1,154 66 9.0 68 7.9 70 7.3 72 6.7 74 6.5 76 6.5 78 6.5 81 6.5 83 6.5 86 6.5
Total 328 33.5 22.66 5,045 276 37.7 293 34.4 309 32.2 325 30.3 338 29.7 348 29.7 358 29.7 369 29.7 380 29.7 391 29.7
HOUSE PROFIT 441 45.1 30.47 6,784 273 37.3 370 43.4 444 46.2 516 48.1 554 48.7 571 48.7 588 48.7 606 48.7 624 48.7 643 48.7
Management Fee 0 0.0 0.00 0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0
INCOME BEFORE FIXED CHARGES 441 45.1 30.47 6,784 273 37.3 370 43.4 444 46.2 516 48.1 554 48.7 571 48.7 588 48.7 606 48.7 624 48.7 643 48.7
FIXED EXPENSES
Property Taxes 50 5.1 3.45 769 55 7.5 55 6.4 55 5.7 56 5.3 58 5.1 60 5.1 62 5.1 63 5.1 65 5.1 67 5.1
Insurance 12 1.2 0.83 185 11 1.4 11 1.3 11 1.2 11 1.1 12 1.0 12 1.0 13 1.0 13 1.0 13 1.0 14 1.0
Reserve 39 4.0 2.70 602 29 4.0 34 4.0 38 4.0 43 4.0 45 4.0 47 4.0 48 4.0 50 4.0 51 4.0 53 4.0
Total 101 10.3 6.99 1,556 95 12.9 100 11.7 104 10.9 111 10.3 115 10.1 119 10.1 122 10.1 126 10.1 130 10.1 134 10.1
NET INCOME $340 34.7 % 23.48 5,228 $179 24.4 % $270 31.7 % $340 35.4 % $405 37.8 % $439 38.6 % $452 38.6 % $466 38.6 % $480 38.6 % $494 38.6 % $509 38.6 %

7. COST FEASIBILITY ANALYSIS

The cost feasibility of the subject project hinges upon the net value added by the planned improvements. If the value
added by the project results in a return which is in excess of the projects all-in cost, that project is deemed feasible.
Therefore, the following steps are taken.
1. A net present value indication is developed for the property in its when complete state, assuming the planned
improvements were to be made to the site. This is performed by taking the cash flow projections developed in the
previous chapter and using discounted cash flow techniques to comprise a net present value estimate.
2. The all-in cost for the project is stated and reviewed to serve as the benchmark for feasibility.
3. The cost is then deducted from the net present value added by the improvements. If the net result is a positive
number, the project is feasible and there is an adequate return on investment. If the net result is a negative number,
the project is not feasible at the market return rates used in the analysis.
We note that given the preliminary stages of the proposed subject property, no specific project cost estimates have
been prepared. The indication of the net present value of the subject property in its completed state, assuming all
previously discussed future improvements were made to the site, is provided for a benchmark of feasibility. This
benchmark is best achieved by a utilizing a discounted cash flow approach, which appropriately considers all changes
in income over the first ten years of operation.
The discounted cash flow analysis applies a discount factor to forecast revenues over a ten year period, inclusive of a
reversion of the hotel at the end of the holding period. To assist in positioning the discount rate and terminal
capitalization rate, we have reviewed several recent investor surveys: HVS, PWC Real Estate Investor Survey, and
CRE/RERC Real Estate Report. The following table summarizes the range of overall capitalization rates indicated by the
hotel sales and the investor surveys for hotels similar in class to the proposed subject property. The averages for each
survey are listed directly underneath the ranges.
Discount Rate Terminal Rate Overall Rate

Source
Surveys of Average Average Average
Investment PWC Real Estate Investor Survey 10.0% - 14.0% 8.5% - 12.0% 8.0% - 12.0%
Parameters Limited-Service Hotels - 11.94% 10.00% 9.80%
1st Quarter 2011
CRE/RERC Real Estate Report 7.5% - 16.0% 7.0% - 14.0% 6.5% - 15.0%
2nd Tier Hotels - 12.00% 10.50% 9.90%
Spring 2011
CRE/RERC Real Estate Report 8.0% - 18.0% 8.5% - 18.0% 8.0% - 16.0%
3rd Tier Hotels - 13.05% 11.75% 11.03%
Spring 2011
The surveys presented previously illustrated average discount rates and terminal capitalization rates and individual data
points; we reviewed this data for our discount and terminal capitalization rate selections. As a check, we also calculated
the discount rate by applying the band-of-investment model, which is illustrated in the following table.
COST FEASIBILITY ANALYSIS 7-1

Averages of Surveys (Proximate): 12% - 13%

Selection of Data Points of Surveys (Proximate): 8% - 18%
Discount Rate
Selected Discount Rate: 12.0%
and Terminal
Capitalization Terminal Capitalization Rates:
Rate Averages of Surveys (Proximate): 10% - 12%
Data Points of Surveys (Proximate): 7% - 18%
Selected Terminal Capitalization Rate: 11.0%
These selected rates were utilized in our discounted cash flow analysis, which is presented in the following table.
Forecast Discount Discounted
Discounted Year Net Income Factor Revenue
Cash Flow
2012/13 $179,000 0.892857 $159,821
Analysis
2013/14 270,000 0.797194 215,242
2014/15 340,000 0.711780 242,005
2015/16 405,000 0.635518 257,385
2016/17 439,000 0.567427 249,100
2017/18 452,000 0.506631 228,997
2018/19 466,000 0.452349 210,795
2019/20 480,000 0.403883 193,864
2020/21 494,000 0.360610 178,141
2021/22 & Reversion 5,109,000 0.321973 1,644,961
Reversion Analysis Total: $3,580,313

2022/23 $524,000 Less Capital: $0
Terminal Cap Rate 11.0 % After Deduction: $3,580,313
Estimated Sale Price $4,763,636 Rounded to: $3,600,000
Less 3% Sales Expense $4,600,000
The proposed subject represents a limited-service hotel with 65 guestrooms and the appropriate public areas and back-
of-the-house spaces for a hotel of this type. The proposed facility is further detailed in chapter five; please refer to this
chapter for a full discussion of the proposed building.
Feasibility Conclusion and Estimate of Replacement Cost

As shown, the indicated net present value of the subject property when complete is $3,600,000. Feasibility is determined
by deducting the cost of the project from the net present value of the cash flows of $3,600,000. As stated previously, a
specific cost estimate or budget for the proposed project did not exist at the time of this report. Therefore, feasibility as a
check against an actual cost cannot be determined. However, we have reviewed development cost estimates for
proposed hotel construction, as well as estimated the replacement cost of the proposed project.

Replacement Cost
Replacement cost is the current construction cost of a building with the same utility as the subject property, but built with
modern materials and according to current construction and design standards. As a basis for estimating the
developmental costs, we have used a hotel development cost survey conducted by HVS International. This survey is
published annually in a newsletter entitled The HVS Hotel Valuation Journal.
The survey presents the range of per-room costs associated with various components of hotel development, including
improvements, furniture and equipment, pre-opening expenses, and operating capital. Statistics are compiled for
budget/economy hotels, mid-scale hotels with and without food and beverage, extended-stay hotels, and full-service
hotels. The results of this survey are presented in the following table.
Cost Survey
(per room)
The proposed subject represents a limited-service hotel with 65 guestrooms and the appropriate public areas and back-
of-the-house spaces for a hotel of this type. The proposed facility is further detailed in the Review of Proposed Facility
chapter; please refer to this chapter for a full discussion of the proposed building.
We have further positioned per-room costs per category for the subject property as follows.
Subject Room Count: 65 U nits

Building Total Replacement Costs Per Room Total
Replacement Building $36,000 $2,340,000
Cost Summary FF&E 8,000 520,000
Pre-Opening Costs and Working Capital 1,000 65,000
Soft Costs 1,500 97,500
Total $46,500 $3,022,500

Rounded To: $3,000,000
As a check, we have relied on information from Marshall & Swift, a nationally recognized authority, to estimate the
replacement cost of the proposed subject propertys building. Using the Marshall & Swift Commercial Estimator computer
software program, the estimated replacement cost derived from this method includes all direct costs plus a portion of indirect
costs, such as construction financing, temporary utilities, and general conditions.
The proposed subject property would most likely be classified as a Class D, Rank 3 limited-service hotel building based on
parameters in the Marshall & Swift Commercial Estimator. The total building area of the proposed subject property is
estimated to be 28,000 square feet. Given these considerations, the replacement cost of the proposed subject property
as if new has been estimated to be $2,400,000.

Date of Query: June 6, 2011
Occupancy: limited-service hotel
Class: Class D
Height (Feet): 10
Rank: 3
Marshall & Swift Estimate Total Area (Square Feet): 28,000
Number of Stories (Section): 3
Number of Elevators: 1
Shape: 2
Number of Rooms: 65
Basic Structure Unit Cost Per SF Total
Base Cost 28,000 $59.08 $1,654,240

Exterior Walls 28,000 13.97 391,160
Heating & Cooling 28,000 7.50 210,000
Elevator (s) 28,000 2.31 64,629
Sprinklers 28,000 2.55 71,400
Total Cost (Building Only) $2,400,000
Per Room: $36,923
Site Value Estimate

Site value may be estimated in a variety of ways including the sales comparison approach and the allocation,
extraction, or ground lease capitalization methods. For the majority of hostelry properties, the two primary methods used
are the sales comparison approach and the ground lease capitalization approach.
We note that the time of this study, no specific site has been determined. We have identified the site by a general
location only, and the site size is an estimate based on a review of site size of comparable hotel operations. Therefore,
we have not estimated the site value.
Entrepreneurial Incentive
Entrepreneurial incentive represents the profit hotel developers expect to earn prior to commencing a new project. As a
result of economic conditions in the hotel industry, actual earned developer's profit after the completion of the hotel has
not always been in evidence. If the economic value of a new hotel does not exceed development cost, indicating that
developers will not earn any profit from their effort, the project would most likely not be completed since the financial
incentive is not present. An incentive would be considered given the proposed nature of the hotel and current market
dynamics.
Conclusion
The indicated replacement cost totaled roughly $3,000,000. The net present value of the proposed subject property
totaled $3,600,000. The site value has not been determined, and entrepreneurial incentive is dependent on the total of
the land and development cost. The feasibility result would be dependent on the total project cost, including land and
entrepreneurial incentive. If the land and entrepreneurial incentive costs combined total less the difference of the
replacement cost from the net present value, the project would prove feasible. While the feasibility should be tested
against an actual development budget with a more specific scope of improvements and a specific site identified, it is
our opinion the project is considered feasible given the assumption of low land cost in the market and a motivated
developer. We also note that the forecast income and expense levels would be positively impacted by possible
incentives from the City of Chandler.

8. ASSUMPTIONS AND LIMITING CONDITIONS
1. This report is set forth as a feasibility study of the proposed subject property; this is not an appraisal report.
2. This report is to be used in whole and not in part.
3. No responsibility is assumed for matters of a legal nature, nor do we render any opinion as to title, which is
assumed to be marketable and free of any deed restrictions and easements. The property is evaluated as
though free and clear unless otherwise stated.
4. We assume that there are no hidden or unapparent conditions of the sub-soil or structures, such as
underground storage tanks, that would impact the propertys development potential. No responsibility is
assumed for these conditions or for any engineering that may be required to discover them.
5. We have not considered the presence of potentially hazardous materials or any form of toxic waste on the
project site. The consultants are not qualified to detect hazardous substances, and we urge the client to retain
an expert in this field if desired.
6. The Americans with Disabilities Act (ADA) became effective on January 26, 1992. We have assumed the
proposed hotel would be designed and constructed to be in full compliance with the ADA.
7. We have made no survey of the site, and we assume no responsibility in connection with such matters.
Sketches, photographs, maps, and other exhibits are included to assist the reader in visualizing the property. It is
assumed that the use of the described real estate will be within the boundaries of the property described, and
that no encroachment will exist.
8. All information, financial operating statements, estimates, and opinions obtained from parties not employed by
U.S. Hotel Appraisals, LLC are assumed to be true and correct. We can assume no liability resulting from
misinformation.
9. Unless noted, we assume that there are no encroachments, zoning violations, or building violations
encumbering the subject property.
10. The property is assumed to be in full compliance with all applicable federal, state, local, and private codes,
laws, consents, licenses, and regulations (including a liquor license where appropriate), and that all licenses,
permits, certificates, franchises, and so forth can be freely renewed or transferred to a purchaser.
11. All mortgages, liens, encumbrances, leases, and servitudes have been disregarded unless specified otherwise.
12. None of this material may be reproduced in any form without our written permission, and the report cannot be
disseminated to the public through advertising, public relations, news, sales, or other media.
13. We are not required to give testimony or attendance in court by reason of this analysis without previous
arrangements, and only when our standard per diem fees and travel costs are paid prior to the appearance.
14. If the reader is making a fiduciary or individual investment decision and has any questions concerning the
material presented in this report, it is recommended that the reader contact us.
15. We take no responsibility for any events or circumstances that take place subsequent to the date of our field
inspection.
16. The quality of a lodging facility's on-site management has a direct effect on a property's economic viability. The
financial forecasts presented in this analysis assume responsible ownership and competent management. Any
departure from this assumption may have a significant impact on the projected operating results.
17. The estimated operating results presented in this report are based on an evaluation of the overall economy,
and neither take into account nor make provision for the effect of any sharp rise or decline in local or national
economic conditions. To the extent that wages and other operating expenses may advance during the
ASSUMPTIONS AND LIMITING CONDITIONS 8-1

economic life of the property, we expect that the prices of rooms, food, beverages, and services will be
adjusted to at least offset those advances. We do not warrant that the estimates will be attained, but they
have been prepared on the basis of information obtained during the course of this study and are intended to
reflect the expectations of a typical hotel investor.
18. This analysis assumes continuation of all Internal Revenue Service tax code provisions as stated or interpreted on
either the date of value or the date of our field inspection, whichever occurs first.
19. Many of the figures presented in this report were generated using sophisticated computer models that make
calculations based on numbers carried out to three or more decimal places. In the interest of simplicity, most
numbers have been rounded to the nearest tenth of a percent. Thus, these figures may be subject to small
rounding errors.
20. It is agreed that our liability to the client is limited to the amount of the fee paid as liquidated damages. Our
responsibility is limited to the client, and use of this report by third parties shall be solely at the risk of the client
and/or third parties. The use of this report is also subject to the terms and conditions set forth in our engagement
letter with the client.
21. Evaluating and comprising financial forecasts for hotels is both a science and an art. Although this analysis
employs various mathematical calculations to provide value indications, the final forecasts are subjective and
may be influenced by our experience and other factors not specifically set forth in this report.
22. This study was prepared by U.S. Hotel Appraisals, LLC. All opinions, recommendations, and conclusions
expressed during the course of this assignment are rendered by the staff of U.S. Hotel Appraisals, LLC as
employees, rather than as individuals.
ASSUMPTIONS AND LIMITING CONDITIONS 8-2

9. CERTIFICATION
The undersigned hereby certify that, to the best of our knowledge and belief:
1. the statements of fact presented in this report are true and correct;
2. the reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting
conditions, and are our personal, impartial, and unbiased professional analyses, opinions, and conclusions;
3. we have no (or the specified) present or prospective interest in the property that is the subject of this report and
no (or the specified) personal interest with respect to the parties involved;
4. we have no bias with respect to the property that is the subject of this report or to the parties involved with this
assignment;
5. our engagement in this assignment was not contingent upon developing or reporting predetermined results;
6. our compensation for completing this assignment is not contingent upon the development or reporting of a
predetermined result or direction in performance that favors the cause of the client, the attainment of a
stipulated result, or the occurrence of a subsequent event directly related of the intended use of this study;
7. our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with
the Uniform Standards of Professional Appraisal Practice;
8. Kathleen Donahue personally inspected the property described in this report; Kasia Russell participated in the
analysis and reviewed the findings, but did not personally inspect the property;
9. Kasia Russell provided significant assistance to Kathleen Donahue, and that no one other than those listed
above and the undersigned prepared the analyses, conclusions, and opinions concerning the real estate that
are set forth in this study; Kathleen Donahue has not performed appraisal/consulting work on this property
within the past three years;
10. the reported analyses, opinions, and conclusions were developed, and this report has been prepared, in
conformity with the requirements of the Code of Professional Ethics and the Standards of Professional Appraisal
Practice of the Appraisal Institute;
11. the use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly
authorized representatives; and
12. as of the date of this report, Kathleen Donahue has completed the Standards and Ethics Education
Requirement of the Appraisal Institute for Associate Members.
Kathleen Donahue, Managing Director

State Appraiser License (TX) 1337633G
U.S. Hotel Appraisals, LLC
CERTIFICATION 9-1
ADDENDA .
Item Title
1 Qualifications
2 Glossary of Terms
3 Copy of Engagement Letter
4 Copy of Smith Travel Research Trend Report and Market Reporting List
ADDENDA TABLE OF CONTENTS

QUALIFICATIONS
Kathleen Donahue
Kathleen is a Senior Project Manager and oversees many of the projects for U.S. Hotel Appraisals. Clients praise Kathleen
for her attentive service and unwavering commitment to quality.
Kathleen joined the firm from Radisson operations in Austin, where she also graduated from the University of Texas.
Kathleen's operations experience in a variety of full-service hotels allows her to provide a level of expertise and insight
valued by hotel investors and lenders. A state-certified appraiser, Kathleen has completed over 200 hours of specialized
appraisal classes and has consulted on hundreds of hotels.
Employment:
2003 - Present U.S. Hotel Appraisals, Flower Mound, TX

1999 - 2003 Radisson Hotel and Suites, Austin, TX
1997 - 1999 Radisson Suites Hotel, Arlington, TX
Professional Affiliations:
American Hotel & Lodging Association, Flower Mound Chamber of Commerce
State Certification:
California, Iowa, Kansas, Kentucky, Nevada, Tennessee, Texas, Utah, Washington
Education:
University of Texas at Austin, Bachelor of Arts
Appraisal Classes Completed:

Highest and Best Use and Market Analysis (30 Hours, April 2008)
Basic Appraisal Procedures (30 Hours, October 2007)
National USPAP Course (15 Hours, October 2006)
Advanced Income Capitalization (40 Hours, February 2006)
Income Property Analysis (15 Hours, October 2005)
Appraisal Methods (15 Hours, October 2005)
Uniform Residential Appraisal (15 Hours, January 2005)
National USPAP Course (15 Hours, March 2004)
Real Estate Appraisal (60 Hours, November 2003)
QUALIFICATIONS
GLOSSARY OF TERMS
Assessed Value: 1.) A value set on real estate and personal property by a government as a basis for levying taxes. 2.) The monetary
amount for a property as officially entered on the assessment roll for purposes of computing the tax levy. Assessed values differ from the
assessors estimate of actual (market) value for three major reasons: fractional assessment ratios, partial exemptions, and decisions by
assessing officials to override market value. The process of gathering and interpreting economic data to provide information that can be
used by policymakers to formulate tax policy.
Average Daily Rate (ADR): A statistical unit that represents the total guest room revenue divided by the total number of occupied rooms.
Base Year: This is the historical year from which future projections are based. This could be a calendar year or a fiscal year.
Business Enterprise Value (BEV): A term applied to the concept of the value contribution of the total intangible assets of a continuing
business enterprise, such as marketing and management skill, an assembled work force, working capital, trade names, franchises, patents,
trademarks, contracts, leases, and operating agreements.
Capital Expenditure: Investments of cash or the creation of liability to acquire or improve an asset (e.g. land, buildings, building additions,
site improvements, machinery, equipment), as distinguished from cash outflows for expense items that are normally considered part of the
current periods operations.
Capital Deduction: A deduction made from the value opinion in order to account for future capital expenditures. These expenditures,
and hence the deduction, are assumed to be required in order to achieve the forecast results. The deduction is also considered in the
positioning of the capitalization rate and other investment parameters.
Chain Scales: According to Smith Travel Research, hotel brands are categorized under the following chain scale segments: Luxury,
Upper-Upscale, Upscale, Mid-Scale with Food and Beverage, Mid-Scale without Food and Beverage, and Economy. Chain scales are
based primarily on the average rate achieved across a particular hotel brand.
Chronological Age: The number of years elapsed since an original structure was built; also known as actual age or historical age.
Departmental Expenses: The costs associated with the following departments: Rooms Includes labor costs such as salaries, wages, and
benefits for front desk, housekeeping, reservations, bell staff, and laundry employees. Other operating expenses in the rooms department
include costs associated with the procurement and maintenance of linens, cleaning supplies, guest supplies, and employee uniforms;
payment of central or franchise reservation fees, equipment leases, and travel agent commissions; and cost of providing a continental
breakfast. Food and Beverage A combination of food and beverage departmental expenses, which include the cost of goods, labor
and related benefits, and other operating expenses. Labor costs include the employment of departmental management; cooks and
kitchen personnel; and service, banquet, and bartending staff. Other food and beverage operating expenses include the procurement
and maintenance of china, silverware, linens, restaurant and kitchen supplies, menus and printing, and special promotions.
Telecommunications Consists of all costs associated with the operation of a hotel's telephone department, including the cost of calls,
the labor cost of the hotel's telephone operators, and other related expenses. It is important to note that the telecommunications
expense excludes capital lease payments. Other Expenses - Comprises those expenses that offset the revenue generated by other hotel-
operated (as opposed to leased) departments such as garage and parking, athletic facilities, gift shop, and equipment rental facilities.
Depreciation: 1.) In appraising, a loss in property value from any cause; the difference between the cost of an improvement on the
effective date of the appraisal and the market value of the improvement on the same date. 2.) In accounting, an allowance made
against the loss in value of an asset for a defined purpose and computed using a specified method.
Developers Incentive: A market-derived figure that represents the amount a developer expects to receive for his or her contribution to a
project and risk.
Direct Construction Costs: 1.) Expenditures for the labor and materials used in the construction of improvements. Also called hard costs.
2.) The labor, material, subcontractor, and heavy equipment costs directly incorporated into the construction of physical improvements.
Economic Life: The period over which improvements to real property contribute to property value.
Effective Age: Age attributed to a property on the basis of the amount of observed deterioration and obsolescence it has sustained; a
propertys effective age may be different from its chronological age.
Entrepreneurial Incentive: See developers incentive.
GLOSSARY OF TERMS
Equity Yield Rate: A rate of return on equity capital as distinguished from the rate of return on debt capital; the equity investors internal
rate of return. The equity yield rate considers the effect of debt financing on the cash flow to the equity investor.
Excess Land: With regard to an improved site, the land not needed to serve or support the existing improvement. With regard to a vacant
site or a site considered as though vacant, the land not needed to accommodate the sites highest and best use. Such land may be
separated from the larger site to have its own highest and best use, or it may allow for future expansion of the existing or anticipated
improvement. See also: surplus land.
Exposure Time: 1.) The period during which a property remains on the market. 2.) The estimated length of time the property interest being
appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective
date of the appraisal; a retrospective estimate based on an analysis of past events assuming a competitive and open market. Exposure
time is always presumed to occur prior to the effective date of the appraisal. See also: marketing period.
Extraordinary Assumption: An assumption, directly related to a specific assignment, which if found to be false could alter the appraisers
opinions or conclusions. Extraordinary assumptions presume as fact otherwise uncertain information about physical, legal, or economic
characteristics of the subject property; or about conditions external to the property such as market conditions or trends; or about the
integrity of data used in an analysis. An extraordinary assumption may be used in an assignment only if: 1.) It is required to properly
develop credible opinions and conclusions; 2.) The appraiser has a reasonable basis for the extraordinary assumption; 3.) Use of the
extraordinary assumption results in a credible analysis; and 4.) The appraiser complies with the disclosure requirements set forth in USPAP
for extraordinary assumptions.
Fair Share: That portion of total supply accounted for by the same property.
Fixed Charges/Expenses: Operating expenses that generally do not vary with occupancy and that prudent management will pay
whether the property is occupied or vacant. Fixed charges include the following: Property Taxes Typically include taxes on real estate,
business and occupation, personal property, utilities, and other municipal taxes. Insurance Cost of insuring the hotel building and its
contents against fire and weather damage, as well as damage associated with equipment malfunction, such as sprinkler leakage. This
expense includes all insurance except that for workers compensation.
Full-Service Operation: A hotel operation that provides a more complete set of services than those offered at an extended-stay, select-
service, or limited-service property. The services of a full-service operation may include room service, valet, concierge, transportation and
tour services, entertainment facilities, barber shop, bellhop service, laundry service, free continental breakfast, restaurant and lounge,
turn-down service, morning newspapers, fitness centers, and more extensive banquet and meeting space.
Going-Concern Value: 1.) The market value of all the tangible and intangible assets of an established and operating business with an
indefinite life, as if sold in aggregate. 2.) Tangible and intangible elements of value in a business enterprise resulting from factors such as
having a trained work force, an operational plant, and the necessary licenses, systems, and procedures in place. 3.) The value of an
operating business enterprise. Goodwill (an intangible asset category usually composed of elements such as franchise reputation,
customer patronage, location, products, and similar factors) may be separately measured but is an integral component of going-
concern value.
Hard Costs: See direct costs.
Hypothetical Condition: Hypothetical conditions assume conditions contrary to known facts about physical, legal, or economic
characteristics of the subject property, such as market conditions or trends, or about the integrity of data used in an analysis. A
hypothetical condition may be used in an assignment only if: 1.) Use of the hypothetical condition is required for legal purposes, purposes
of meaning, or purposes of comparison; 2.) Use of the hypothetical condition results in a credible analysis; and 3.) The appraiser complies
with the disclosure requirements set for in USPAP for hypothetical conditions.
Indirect Construction Costs: Expenditures or allowances for items other than labor and materials that are necessary for construction, but
are not typically part of the construction contract. Indirect costs may include administrative costs; professional fees; financing costs and
the interest paid on construction loans; taxes and the builders or developers all-risk insurance during construction; and marketing, sales,
and lease-up costs incurred to achieve occupancy or sale. Also called soft costs.
Insurable Value: 1.) The value of an asset or asset group that is covered by an insurance policy. Insurable value can be estimated by
deducting costs of non-insurable items (e.g., land value) from market value. 2.) Value used by insurance companies as the basis for
insurance, which is often considered to be the replacement or reproduction cost plus allowances for debris removal or demolition less
deterioration and non-insurable items; sometimes cash value or market value, but often entirely a cost concept.
Investment Value: The specific value of an investment to a particular investor or class of investors based on individual investment
requirements; distinguished from market value, which is impersonal and detached. See also: market value.
GLOSSARY OF TERMS
Limited-Service Operation: A hotel operation without a food and beverage department, which provides basic amenities at a reasonable
price to guests.
Loan-to-Value Ratio (LTV): The ratio between a mortgage loan and the value of the property pledged as security, usually expressed as a
percentage.
Market Share: That portion of a markets total demand accommodated by a given property.
Market Value: The concept of market value varies slightly between jurisdictions and is being continually refined. The following definition
incorporates the most widely accepted components of market value: The most probable price, as of a specified date, in cash, in terms
equivalent to cash, or in other precisely revealed terms, for which the specified property rights should sell after reasonable exposure in a
competitive market under all conditions requisite to a fair sale. A fair determination of market value assumes that the buyer and seller are
acting prudently, knowledgably, and for self-interest, and that neither is under undue duress.
Marketing Period: The time it takes an interest in real property to sell on the market subsequent to the effective date of an appraisal. This
includes the anticipated time required to expose the property to a pool of prospective purchasers and to allow appropriate time for
negotiation, the exercise of due diligence, and the consummation of a sale at a price supportable by concurrent market conditions.
Marketing time differs from exposure time, which is always assumed to precede the effective date of an appraisal. See also: exposure
time.
Net Operating Income (NOI) (EBITDA): The actual or anticipated net income that remains after all operating expenses are deducted from
effective gross income, but before mortgage debt service and book depreciation are deducted; may be calculated before or after
deducting replacement reserves. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is a term sometimes substituted
for net operating income, especially as a measure of the performance of Real Estate Investment Trusts (REITs).
Penetration Factor (By Segment): A rating factor that shows how well each property in the market area competes for a particular market
segment, calculated by dividing a given hotels market share by its fair share.
Per Available Room (PAR): A basis of comparison that is calculated by dividing a revenue or expense categorys total dollar amount by
the hotels room count. This point of comparison is most useful when reviewing operating and fixed expense categories.
Per Occupied Room (POR): A basis of comparison that is calculated by dividing a revenue or expense categorys total dollar amount by
the number of occupied rooms in a given year. This point of comparison is most useful when reviewing revenue and departmental
expense categories.
Property Improvement Plan (PIP): A brand-mandated plan of required renovations that enable a hotel to meet competitive standards
and also contribute to the owners ability to attain a new or renewed franchise agreement.
Replacement Cost: The estimated cost to construct a building with utility equivalent to the building being appraised. Replacement cost
assumes current prices as of the effective appraisal date and the use of modern materials and current standards, design, and layout.
RevPAR (Revenue Per Available Room): A unit of comparison applied in the appraisal of lodging facilities, RevPAR is calculated by
multiplying a propertys percentage of occupancy by its average room rate. RevPAR is used throughout the lodging industry to compare
the revenue of competing facilities.
Renegotiable Rate Mortgage (RRM): An alternative mortgage loan in which the interest rate is renegotiated periodically. The loan may be
either a long-term loan with periodic interest rate adjustments, or a short-term loan that is renewed periodically at new interest rates, but
based on a long-term mortgage.
Select-Service Operation: A hotel operation designed to answer the market demand for a level of service and amenities beyond the
limited-service segment, but less than the full-service hotel segment; select-service properties offer a limited degree of food and beverage
options and typically fall within middle to upper-middle tiers within their respective markets.
Site Improvements: Improvements to a site that make it suitable for its intended use or development. Site improvements include, but are
not limited to, sidewalks, parking lots, free-standing signage, and landscaping.
Soft Costs: See: indirect costs.
Stability: A stage in a market areas life cycle in which the market area experiences equilibrium without marked gains or losses.
Stabilized Expense: A projected expense that is subject to change, but has been adjusted to reflect an equivalent, stable annual
expense.
GLOSSARY OF TERMS
Stabilized Income: Income at that point in time when abnormalities in supply and demand or any additional transitory conditions cease
to exist, and the existing conditions are those expected to continue over the economic life of the property; projected income that is
subject to change, but has been adjusted to reflect an equivalent, stable annual income.
Stabilized Occupancy: Occupancy at that point in time when abnormalities in supply and demand or any additional transitory conditions
cease to exist, and the existing conditions are those expected to continue over the economic life of the property; the optimum range of
long-term occupancy that an income-producing real estate project is expected to achieve under competent management after
exposure for leasing in the open market for a reasonable period of time at terms and conditions comparable to competitive offerings.
Stabilized Value: 1.) A value opinion that excludes from consideration any abnormal relationship between supply and demand such as is
experienced in boom periods, when cost and sale price may exceed the long-term value, or during periods of depression, when cost and
sale price may fall short of long-term value. 2.) A value opinion that excludes from consideration any transitory condition that may cause
excessive construction costs (e.g., a bonus or premium for material), the abnormal inefficiency of labor, the cost of delay, or an excessive
sale price.
Surplus Land: Land not necessary to support the highest and best use of the existing improvement but, because of physical limitations,
building placement, or neighborhood norms, cannot be sold off separately. Such land may or may not contribute positively to value and
may or may not accommodate future expansion of an existing or anticipated improvement. See also: excess land.
Undistributed Operating Expenses: The costs associated with the following categories: Administrative and General (A&G) Expense
Includes all managerial and operational expenses that cannot be attributed to a particular department, including payroll and related
expenses for the general manager, the human resources and training department, and security, clerical, and accounting operations.
Other A&G expenses include office supplies, computer services, accounting and legal fees, cash overages and shortages, bad debt
expenses, travel insurance, credit card commissions, transportation (non-guest), and travel and entertainment. Marketing Expense
Includes payroll and related expenses for the sales and marketing staff, direct sales expenses, advertising and promotion, travel expenses
for the sales staff, and civic and community projects. Marketing expenses also include national advertising fees paid to a branded
property's franchise company and the costs associated with frequent-stay programs. This expense category does not include royalty fees
charged by the franchise company. Utility Expense Utility expenses typically include electricity, fuel (oil, gas, and coal), purchased
steam, and water. The utility costs include central plant and energy management systems. This category does not, however, include
waste removal, which is included in Property Operation and Maintenance Expense. Property Operations and Maintenance Expense This
category includes payroll and related expenses for maintenance personnel; maintenance supplies; repairs to and maintenance of the
building and grounds; furniture and equipment; and the removal of waste. Franchise Fee Includes only the royalty fees charged by
franchise companies. Other fees or assessments are categorized under Marketing Expense or Rooms-Other Expenses. Management Fees
Fees charged by management organizations for management services or supervision. This expense includes both base and incentive
fees.
Use Value: In real estate appraisal, the value a specific property has for a specific use. This may be the highest and best use of the
property or some other use specified as a condition of the appraisal, and may be used where legislation has been enacted to preserve
farmland, timberland, or other open-space land on urban fringes.
GLOSSARY OF TERMS
United Kingdom United States
Blue Fin Building 735 East Main Street
110 Southwark Street Hendersonville
London SE1 0TA TN 37075
Phone: +44 (0)20 7922 1930 Phone: +1 (615) 824 8664
Fax: +44 (0)20 7922 1931 Fax: +1 (615) 824 3848
www.strglobal.com www.str.com
Tyler, TX Selected Properties

January 2005 to April 2011 Job Number: 362298_SADIM Staff: SS Created: June 10, 2011
Currency: USD - US Dollar
Tab
Table of Contents 1
Data by Measure 2
Percent Change by Measure 3
Percent Change by Year 4
Twelve Month Moving Average 5
Day of Week Analysis 6
Raw Data 7
Classic 8
Response Report 9
Help 10
Terms and Conditions 11
Tab 2 - Data by Measure
Job Number: 362298_SADIM Staff: SS Created: June 10, 2011
Occupancy (%)
January February March April May June July August September October November December Total Year Apr YTD
2005 50.9 65.0 70.3 71.5 62.3 69.7 69.6 73.3 82.6 81.1 70.6 60.5 68.9 64.4
2006 57.7 66.9 75.0 70.6 68.1 82.5 82.3 77.8 65.0 62.0 59.8 51.3 68.3 67.6
2007 44.4 53.6 63.4 57.6 62.0 64.2 65.0 64.3 62.2 62.5 62.1 46.8 59.0 54.8
2008 50.3 61.6 65.9 74.0 69.9 67.1 74.1 68.7 74.3 66.0 48.9 40.7 63.1 62.9
2009 50.6 62.4 65.4 69.8 61.3 58.7 61.1 60.3 54.7 57.3 46.9 38.8 57.2 62.0
2010 39.9 50.0 57.0 53.6 55.9 58.3 53.5 52.9 43.2 51.7 48.2 38.9 50.2 50.1
2011 39.3 53.5 60.5 56.3 52.3
Avg 47.4 58.8 65.2 64.6 63.1 66.5 67.2 65.9 63.1 63.1 55.6 45.8 60.9 58.9
ADR ($)
2005 56.38 56.57 58.80 61.84 59.69 61.94 62.53 63.50 61.79 64.43 61.21 57.24 60.76 58.62
2006 59.49 60.79 63.05 63.91 61.37 59.75 59.63 58.95 67.41 68.18 72.10 68.80 63.23 61.97
2007 69.79 70.91 73.15 75.36 75.65 77.70 76.05 74.42 73.73 74.73 75.98 71.31 74.29 72.51
2008 73.40 73.34 73.34 77.51 77.58 74.91 76.15 75.14 80.27 77.42 76.08 73.04 75.91 74.58
2009 72.38 72.12 70.76 74.37 77.28 72.86 70.75 60.82 69.02 72.06 68.39 65.61 70.76 72.44
2010 65.55 70.09 68.24 70.68 69.27 69.81 68.75 67.80 69.53 70.02 67.89 63.28 68.56 68.77
2011 63.72 62.13 62.13 66.79 63.69
Avg 65.75 66.40 66.91 70.06 70.26 69.01 68.69 66.48 70.17 71.02 70.03 66.16 68.70 67.42
RevPAR ($)
2005 28.69 36.79 41.35 44.20 37.21 43.16 43.50 46.56 51.02 52.24 43.19 34.63 41.88 37.73
2006 34.31 40.68 47.31 45.13 41.77 49.30 49.08 45.86 43.81 42.29 43.10 35.29 43.16 41.86
2007 30.99 37.99 46.35 43.44 46.88 49.92 49.41 47.81 45.86 46.73 47.19 33.39 43.85 39.70
2008 36.92 45.18 48.32 57.39 54.27 50.24 56.40 51.60 59.62 51.06 37.19 29.75 47.92 46.91
2009 36.64 44.97 46.30 51.91 47.41 42.79 43.26 36.65 37.78 41.26 32.05 25.47 40.50 44.90
2010 26.13 35.05 38.91 37.87 38.73 40.67 36.75 35.85 30.02 36.17 32.72 24.64 34.45 34.45
2011 25.02 33.23 37.61 37.58 33.33
Avg 31.15 39.07 43.61 45.23 44.33 45.86 46.17 43.78 44.30 44.85 38.97 30.33 41.83 39.74
Supply
2005 12,431 11,228 12,431 12,030 12,431 12,030 12,431 12,431 12,030 12,431 12,030 12,431 146,365 48,120
2006 12,431 11,228 12,431 12,030 12,431 12,030 12,431 12,431 12,030 12,431 12,030 12,431 146,365 48,120
2007 12,431 11,228 12,431 12,030 12,431 12,030 12,431 12,431 12,030 12,431 12,030 12,431 146,365 48,120
2008 12,431 11,228 12,431 12,030 12,431 12,030 12,431 12,431 12,030 13,795 13,350 13,795 150,413 48,120
2009 13,795 12,460 13,795 13,350 13,795 13,350 13,795 13,795 13,350 13,795 13,350 13,795 162,425 53,400
2010 13,795 12,460 13,795 13,350 13,795 13,350 13,795 13,795 13,350 13,795 13,350 13,795 162,425 53,400
2011 13,795 12,460 13,795 13,350 53,400
Avg 13,016 11,756 13,016 12,596 12,886 12,470 12,886 12,886 12,470 13,113 12,690 13,113 152,393 50,383
Demand
2005 6,325 7,302 8,741 8,598 7,748 8,382 8,648 9,115 9,933 10,079 8,488 7,520 100,879 30,966
2006 7,169 7,514 9,329 8,496 8,461 9,927 10,231 9,670 7,819 7,710 7,192 6,377 99,895 32,508
2007 5,520 6,016 7,877 6,934 7,704 7,729 8,076 7,987 7,483 7,773 7,472 5,821 86,392 26,347
2008 6,253 6,916 8,191 8,907 8,695 8,069 9,206 8,537 8,935 9,098 6,526 5,619 94,952 30,267
2009 6,983 7,770 9,026 9,318 8,462 7,840 8,435 8,312 7,307 7,899 6,257 5,356 92,965 33,097
2010 5,499 6,231 7,865 7,154 7,713 7,778 7,375 7,295 5,763 7,126 6,435 5,372 81,606 26,749
2011 5,416 6,665 8,352 7,510 27,943
Avg 6,166 6,916 8,483 8,131 8,131 8,288 8,662 8,486 7,873 8,281 7,062 6,011 92,782 29,697
Revenue ($)
2005 356,586 413,080 513,974 531,691 462,506 519,169 540,724 578,829 613,754 649,346 519,547 430,438 6,129,644 1,815,331
2006 426,483 456,784 588,164 542,951 519,249 593,129 610,063 570,034 527,066 525,657 518,520 438,728 6,316,828 2,014,382
2007 385,262 426,593 576,164 522,528 582,803 600,568 614,212 594,384 551,703 580,887 567,696 415,100 6,417,900 1,910,547
2008 458,989 507,241 600,706 690,343 674,577 604,410 701,053 641,483 717,186 704,407 496,525 410,435 7,207,355 2,257,279
2009 505,438 560,339 638,670 692,989 653,958 571,212 596,766 505,521 504,357 569,181 427,917 351,392 6,577,740 2,397,436
2010 360,450 436,736 536,695 505,609 534,256 542,988 507,032 494,585 400,704 498,979 436,861 339,937 5,594,832 1,839,490
2011 345,105 414,071 518,872 501,628 1,779,676
Avg 405,473 459,263 567,606 569,677 571,225 571,913 594,975 564,139 552,462 588,076 494,511 397,672 6,374,050 2,002,020
Smith Travel Researchs Trend Report is a publication of Smith Travel Research and is intended solely for use by paid subscribers. Reproduction or distribution of the Trend Report, in whole or part, without written permission of Smith Travel Research is
and subject to legal action. Site licenses are available. Ownership, distribution and use of the Trend Report and its contents are subject to the terms set forth in the contract you have entered into with Smith Travel Research. Source 2011 Smith Travel
Tab 3 - Percent Change from Previous Year - Detail by Measure
Occupancy
2006 13.3 2.9 6.7 -1.2 9.2 18.4 18.3 6.1 -21.3 -23.5 -15.3 -15.2 -1.0 5.0
2007 -23.0 -19.9 -15.6 -18.4 -8.9 -22.1 -21.1 -17.4 -4.3 0.8 3.9 -8.7 -13.5 -19.0
2008 13.3 15.0 4.0 28.5 12.9 4.4 14.0 6.9 19.4 5.5 -21.3 -13.0 7.0 14.9
2009 0.6 1.2 -0.7 -5.7 -12.3 -12.4 -17.4 -12.3 -26.3 -13.2 -4.1 -4.7 -9.3 -1.5
2010 -21.3 -19.8 -12.9 -23.2 -8.9 -0.8 -12.6 -12.2 -21.1 -9.8 2.8 0.3 -12.2 -19.2
2011 -1.5 7.0 6.2 5.0 4.5
Avg -3.1 -2.3 -2.0 -2.5 -1.6 -2.5 -3.8 -5.8 -10.7 -8.0 -6.8 -8.3 -5.8 -2.5
ADR
2006 5.5 7.5 7.2 3.3 2.8 -3.5 -4.6 -7.2 9.1 5.8 17.8 20.2 4.1 5.7
2007 17.3 16.6 16.0 17.9 23.3 30.0 27.5 26.2 9.4 9.6 5.4 3.7 17.5 17.0
2008 5.2 3.4 0.3 2.9 2.6 -3.6 0.1 1.0 8.9 3.6 0.1 2.4 2.2 2.8
2009 -1.4 -1.7 -3.5 -4.0 -0.4 -2.7 -7.1 -19.1 -14.0 -6.9 -10.1 -10.2 -6.8 -2.9
2010 -9.4 -2.8 -3.6 -5.0 -10.4 -4.2 -2.8 11.5 0.7 -2.8 -0.7 -3.5 -3.1 -5.1
2011 -2.8 -11.4 -9.0 -5.5 -7.4
Avg 2.4 1.9 1.2 1.6 3.6 3.2 2.6 2.5 2.8 1.9 2.5 2.5 2.8 1.7
RevPAR
2006 19.6 10.6 14.4 2.1 12.3 14.2 12.8 -1.5 -14.1 -19.0 -0.2 1.9 3.1 11.0
2007 -9.7 -6.6 -2.0 -3.8 12.2 1.3 0.7 4.3 4.7 10.5 9.5 -5.4 1.6 -5.2
2008 19.1 18.9 4.3 32.1 15.7 0.6 14.1 7.9 30.0 9.3 -21.2 -10.9 9.3 18.1
2009 -0.8 -0.5 -4.2 -9.5 -12.6 -14.8 -23.3 -29.0 -36.6 -19.2 -13.8 -14.4 -15.5 -4.3
2010 -28.7 -22.1 -16.0 -27.0 -18.3 -4.9 -15.0 -2.2 -20.6 -12.3 2.1 -3.3 -14.9 -23.3
2011 -4.3 -5.2 -3.3 -0.8 -3.3
Avg -0.8 -0.8 -1.1 -1.1 1.9 -0.7 -2.1 -4.1 -7.3 -6.2 -4.7 -6.4 -3.3 -1.1
Supply
2006 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
2007 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
2008 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 11.0 11.0 11.0 2.8 0.0
2009 11.0 11.0 11.0 11.0 11.0 11.0 11.0 11.0 11.0 0.0 0.0 0.0 8.0 11.0
2010 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
2011 0.0 0.0 0.0 0.0 0.0
Avg 1.8 1.8 1.8 1.8 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 1.8
Demand
2006 13.3 2.9 6.7 -1.2 9.2 18.4 18.3 6.1 -21.3 -23.5 -15.3 -15.2 -1.0 5.0
2007 -23.0 -19.9 -15.6 -18.4 -8.9 -22.1 -21.1 -17.4 -4.3 0.8 3.9 -8.7 -13.5 -19.0
2008 13.3 15.0 4.0 28.5 12.9 4.4 14.0 6.9 19.4 17.0 -12.7 -3.5 9.9 14.9
2009 11.7 12.3 10.2 4.6 -2.7 -2.8 -8.4 -2.6 -18.2 -13.2 -4.1 -4.7 -2.1 9.4
2010 -21.3 -19.8 -12.9 -23.2 -8.9 -0.8 -12.6 -12.2 -21.1 -9.8 2.8 0.3 -12.2 -19.2
2011 -1.5 7.0 6.2 5.0 4.5
Avg -1.2 -0.4 -0.2 -0.8 0.3 -0.6 -1.9 -3.9 -9.1 -5.7 -5.1 -6.4 -3.8 -0.7
Revenue
2006 19.6 10.6 14.4 2.1 12.3 14.2 12.8 -1.5 -14.1 -19.0 -0.2 1.9 3.1 11.0
2007 -9.7 -6.6 -2.0 -3.8 12.2 1.3 0.7 4.3 4.7 10.5 9.5 -5.4 1.6 -5.2
2008 19.1 18.9 4.3 32.1 15.7 0.6 14.1 7.9 30.0 21.3 -12.5 -1.1 12.3 18.1
2009 10.1 10.5 6.3 0.4 -3.1 -5.5 -14.9 -21.2 -29.7 -19.2 -13.8 -14.4 -8.7 6.2
2010 -28.7 -22.1 -16.0 -27.0 -18.3 -4.9 -15.0 -2.2 -20.6 -12.3 2.1 -3.3 -14.9 -23.3
2011 -4.3 -5.2 -3.3 -0.8 -3.3
Avg 1.0 1.0 0.6 0.5 3.8 1.1 -0.5 -2.5 -5.9 -3.8 -3.0 -4.4 -1.3 0.6
and subject to legal action. Site licenses are available. Ownership, distribution and use of the Trend Report and its contents are subject to the terms set forth in the contract you have entered into with Smith Travel Research. Source 2011 Smith Travel
Tab 4 - Percent Change from Previous Year - Detail by Year
Jan 06 Feb 06 Mar 06 Apr 06 May 06 Jun 06 Jul 06 Aug 06 Sep 06 Oct 06 Nov 06 Dec 06 Total Year Apr YTD
Occ 13.3 2.9 6.7 -1.2 9.2 18.4 18.3 6.1 -21.3 -23.5 -15.3 -15.2 -1.0 5.0
ADR 5.5 7.5 7.2 3.3 2.8 -3.5 -4.6 -7.2 9.1 5.8 17.8 20.2 4.1 5.7
RevPAR 19.6 10.6 14.4 2.1 12.3 14.2 12.8 -1.5 -14.1 -19.0 -0.2 1.9 3.1 11.0
Supply 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Demand 13.3 2.9 6.7 -1.2 9.2 18.4 18.3 6.1 -21.3 -23.5 -15.3 -15.2 -1.0 5.0
Revenue 19.6 10.6 14.4 2.1 12.3 14.2 12.8 -1.5 -14.1 -19.0 -0.2 1.9 3.1 11.0
Occ -23.0 -19.9 -15.6 -18.4 -8.9 -22.1 -21.1 -17.4 -4.3 0.8 3.9 -8.7 -13.5 -19.0
ADR 17.3 16.6 16.0 17.9 23.3 30.0 27.5 26.2 9.4 9.6 5.4 3.7 17.5 17.0
RevPAR -9.7 -6.6 -2.0 -3.8 12.2 1.3 0.7 4.3 4.7 10.5 9.5 -5.4 1.6 -5.2
Supply 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Demand -23.0 -19.9 -15.6 -18.4 -8.9 -22.1 -21.1 -17.4 -4.3 0.8 3.9 -8.7 -13.5 -19.0
Revenue -9.7 -6.6 -2.0 -3.8 12.2 1.3 0.7 4.3 4.7 10.5 9.5 -5.4 1.6 -5.2
Occ 13.3 15.0 4.0 28.5 12.9 4.4 14.0 6.9 19.4 5.5 -21.3 -13.0 7.0 14.9
ADR 5.2 3.4 0.3 2.9 2.6 -3.6 0.1 1.0 8.9 3.6 0.1 2.4 2.2 2.8
RevPAR 19.1 18.9 4.3 32.1 15.7 0.6 14.1 7.9 30.0 9.3 -21.2 -10.9 9.3 18.1
Supply 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 11.0 11.0 11.0 2.8 0.0
Demand 13.3 15.0 4.0 28.5 12.9 4.4 14.0 6.9 19.4 17.0 -12.7 -3.5 9.9 14.9
Revenue 19.1 18.9 4.3 32.1 15.7 0.6 14.1 7.9 30.0 21.3 -12.5 -1.1 12.3 18.1
Occ 0.6 1.2 -0.7 -5.7 -12.3 -12.4 -17.4 -12.3 -26.3 -13.2 -4.1 -4.7 -9.3 -1.5
ADR -1.4 -1.7 -3.5 -4.0 -0.4 -2.7 -7.1 -19.1 -14.0 -6.9 -10.1 -10.2 -6.8 -2.9
RevPAR -0.8 -0.5 -4.2 -9.5 -12.6 -14.8 -23.3 -29.0 -36.6 -19.2 -13.8 -14.4 -15.5 -4.3
Supply 11.0 11.0 11.0 11.0 11.0 11.0 11.0 11.0 11.0 0.0 0.0 0.0 8.0 11.0
Demand 11.7 12.3 10.2 4.6 -2.7 -2.8 -8.4 -2.6 -18.2 -13.2 -4.1 -4.7 -2.1 9.4
Revenue 10.1 10.5 6.3 0.4 -3.1 -5.5 -14.9 -21.2 -29.7 -19.2 -13.8 -14.4 -8.7 6.2
Occ -21.3 -19.8 -12.9 -23.2 -8.9 -0.8 -12.6 -12.2 -21.1 -9.8 2.8 0.3 -12.2 -19.2
ADR -9.4 -2.8 -3.6 -5.0 -10.4 -4.2 -2.8 11.5 0.7 -2.8 -0.7 -3.5 -3.1 -5.1
RevPAR -28.7 -22.1 -16.0 -27.0 -18.3 -4.9 -15.0 -2.2 -20.6 -12.3 2.1 -3.3 -14.9 -23.3
Supply 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Demand -21.3 -19.8 -12.9 -23.2 -8.9 -0.8 -12.6 -12.2 -21.1 -9.8 2.8 0.3 -12.2 -19.2
Revenue -28.7 -22.1 -16.0 -27.0 -18.3 -4.9 -15.0 -2.2 -20.6 -12.3 2.1 -3.3 -14.9 -23.3
Occ -1.5 7.0 6.2 5.0 4.5
ADR -2.8 -11.4 -9.0 -5.5 -7.4
RevPAR -4.3 -5.2 -3.3 -0.8 -3.3
Supply 0.0 0.0 0.0 0.0 0.0
Demand -1.5 7.0 6.2 5.0 4.5
Revenue -4.3 -5.2 -3.3 -0.8 -3.3
subject to legal action. Site licenses are available. Ownership, distribution and use of the Trend Report and its contents are subject to the terms set forth in the contract you have entered into with Smith Travel Research. Source 2011 Smith Travel Rese
Tab 5 - Twelve Month Moving Average
Occupancy (%)
January February March April May June July August September October November December
2006 69.5 69.6 70.0 70.0 70.5 71.5 72.6 73.0 71.5 69.9 69.0 68.3
2007 67.1 66.1 65.1 64.0 63.5 62.0 60.5 59.4 59.2 59.2 59.4 59.0
2008 59.5 60.1 60.4 61.7 62.4 62.6 63.4 63.8 64.8 65.1 63.8 63.1
2009 63.0 63.1 63.1 62.8 62.1 61.4 60.4 59.8 58.3 57.6 57.4 57.2
2010 56.3 55.4 54.7 53.3 52.9 52.8 52.2 51.5 50.6 50.1 50.2 50.2
2011 50.2 50.5 50.8 51.0
ADR ($)
2006 60.95 61.25 61.62 61.79 61.91 61.71 61.44 61.04 61.44 61.66 62.44 63.23
2007 63.88 64.55 65.41 66.28 67.51 69.22 70.95 72.61 73.17 73.76 74.08 74.29
2008 74.51 74.66 74.68 74.90 75.10 74.86 74.88 74.95 75.54 75.79 75.79 75.91
2009 75.81 75.69 75.43 75.14 75.11 74.95 74.46 73.23 72.24 71.72 71.19 70.76
2010 70.32 70.15 69.92 69.50 68.71 68.43 68.23 68.93 68.96 68.75 68.71 68.56
2011 68.44 67.80 67.18 66.85
RevPAR ($)
2006 42.36 42.66 43.16 43.24 43.63 44.13 44.61 44.55 43.95 43.11 43.10 43.16
2007 42.88 42.67 42.59 42.45 42.88 42.93 42.96 43.13 43.30 43.67 44.01 43.85
2008 44.35 44.90 45.07 46.22 46.84 46.87 47.46 47.79 48.92 49.30 48.39 47.92
2009 47.79 47.75 47.58 47.19 46.65 46.05 45.01 43.78 42.12 41.28 40.86 40.50
2010 39.60 38.84 38.22 37.06 36.33 36.15 35.60 35.53 34.89 34.46 34.52 34.45
2011 34.35 34.21 34.10 34.08
Supply
2006 146,365 146,365 146,365 146,365 146,365 146,365 146,365 146,365 146,365 146,365 146,365 146,365
2007 146,365 146,365 146,365 146,365 146,365 146,365 146,365 146,365 146,365 146,365 146,365 146,365
2008 146,365 146,365 146,365 146,365 146,365 146,365 146,365 146,365 146,365 147,729 149,049 150,413
2009 151,777 153,009 154,373 155,693 157,057 158,377 159,741 161,105 162,425 162,425 162,425 162,425
2010 162,425 162,425 162,425 162,425 162,425 162,425 162,425 162,425 162,425 162,425 162,425 162,425
2011 162,425 162,425 162,425 162,425
Demand
2006 101,723 101,935 102,523 102,421 103,134 104,679 106,262 106,817 104,703 102,334 101,038 99,895
2007 98,246 96,748 95,296 93,734 92,977 90,779 88,624 86,941 86,605 86,668 86,948 86,392
2008 87,125 88,025 88,339 90,312 91,303 91,643 92,773 93,323 94,775 96,100 95,154 94,952
2009 95,682 96,536 97,371 97,782 97,549 97,320 96,549 96,324 94,696 93,497 93,228 92,965
2010 91,481 89,942 88,781 86,617 85,868 85,806 84,746 83,729 82,185 81,412 81,590 81,606
2011 81,523 81,957 82,444 82,800
Revenue ($)
2006 6,199,541 6,243,245 6,317,435 6,328,695 6,385,438 6,459,398 6,528,737 6,519,942 6,433,254 6,309,565 6,308,538 6,316,828
2007 6,275,607 6,245,416 6,233,416 6,212,993 6,276,547 6,283,986 6,288,135 6,312,485 6,337,122 6,392,352 6,441,528 6,417,900
2008 6,491,627 6,572,275 6,596,817 6,764,632 6,856,406 6,860,248 6,947,089 6,994,188 7,159,671 7,283,191 7,212,020 7,207,355
2009 7,253,804 7,306,902 7,344,866 7,347,512 7,326,893 7,293,695 7,189,408 7,053,446 6,840,617 6,705,391 6,636,783 6,577,740
2010 6,432,752 6,309,149 6,207,174 6,019,794 5,900,092 5,871,868 5,782,134 5,771,198 5,667,545 5,597,343 5,606,287 5,594,832
2011 5,579,487 5,556,822 5,538,999 5,535,018
High value is boxed. Low value is boxed and italicized.
Tab 6 - Day of Week Analysis
Occupancy (%) Three Year Occupancy (%)
Sun Mon Tue Wed Thu Fri Sat Total Month Sun Mon Tue Wed Thu Fri Sat Total Year
May - 10 34.4 52.5 65.2 61.4 53.8 55.9 70.7 55.9 May 08 - Apr 09 40.3 63.0 72.1 69.4 62.5 67.9 64.5 62.8
Jun - 10 31.2 50.9 60.9 59.5 62.2 72.2 69.9 58.3 May 09 - Apr 10 30.9 51.0 59.4 57.0 54.7 63.0 57.1 53.3
Jul - 10 34.4 52.2 59.4 57.4 54.4 54.7 59.6 53.5 May 10 - Apr 11 29.2 48.9 55.9 55.2 52.8 58.5 56.3 51.0
Aug - 10 30.5 56.5 60.4 60.8 54.3 56.9 53.6 52.9 Total 3 Yr 33.4 54.2 62.3 60.4 56.6 63.1 59.2 55.6
Sep - 10 25.3 36.5 42.6 41.6 49.5 54.1 51.4 43.2
Oct - 10 25.9 42.4 48.1 52.0 56.0 69.7 65.9 51.7
Nov - 10 25.2 46.9 52.9 59.2 54.1 56.6 41.7 48.2
Dec - 10 22.2 40.4 41.9 42.1 35.7 43.2 46.1 38.9
Jan - 11 25.9 40.1 47.4 47.4 43.9 40.9 33.7 39.3
Feb - 11 31.7 58.9 61.6 62.8 53.4 54.9 51.1 53.5
Mar - 11 33.5 56.6 66.0 62.4 62.3 72.6 68.1 60.5
Apr - 11 29.8 52.4 60.6 60.1 56.0 69.3 61.1 56.3
Total Year 29.2 48.9 55.9 55.2 52.8 58.5 56.3 51.0
ADR Three Year ADR

May - 10 69.89 70.16 71.47 70.46 66.39 67.10 68.96 69.27 May 08 - Apr 09 71.53 76.49 77.37 76.66 73.77 73.90 74.61 75.14
Jun - 10 65.08 68.39 69.63 69.71 70.36 71.83 70.68 69.81 May 09 - Apr 10 67.13 68.74 71.47 70.69 68.43 69.26 69.52 69.50
Jul - 10 63.01 71.32 72.60 69.88 68.13 67.13 67.70 68.75 May 10 - Apr 11 64.57 67.78 68.66 67.38 66.15 66.18 66.27 66.85
Aug - 10 65.40 69.65 68.79 68.19 66.56 66.32 68.04 67.80 Total 3 Yr 68.09 71.37 72.83 71.89 69.65 69.91 70.25 70.74
Sep - 10 69.16 69.28 72.62 70.65 69.36 66.68 69.40 69.53
Oct - 10 66.65 69.58 70.35 72.82 70.91 69.74 69.32 70.02
Nov - 10 63.63 69.67 71.09 68.85 67.54 64.69 66.32 67.89
Dec - 10 63.90 66.04 62.61 64.01 63.05 61.50 62.64 63.28
Jan - 11 63.87 64.23 68.33 63.73 63.79 62.62 58.80 63.72
Feb - 11 60.64 63.72 64.37 63.09 61.40 60.30 60.03 62.13
Mar - 11 57.82 62.75 65.03 62.23 60.75 63.95 59.72 62.13
Apr - 11 64.73 68.25 67.34 66.12 65.09 67.33 67.34 66.79
Total Year 64.57 67.78 68.66 67.38 66.15 66.18 66.27 66.85
RevPAR Three Year RevPAR

May - 10 24.05 36.84 46.59 43.25 35.69 37.51 48.79 38.73 May 08 - Apr 09 28.80 48.20 55.76 53.22 46.07 50.16 48.14 47.19
Jun - 10 20.33 34.79 42.40 41.50 43.77 51.85 49.44 40.67 May 09 - Apr 10 20.75 35.04 42.47 40.27 37.42 43.67 39.69 37.06
Jul - 10 21.69 37.23 43.15 40.13 37.04 36.74 40.33 36.75 May 10 - Apr 11 18.84 33.12 38.40 37.22 34.90 38.70 37.30 34.08
Aug - 10 19.94 39.35 41.52 41.46 36.17 37.72 36.48 35.85 Total 3 Yr 22.71 38.65 45.40 43.44 39.41 44.09 41.59 39.34
Sep - 10 17.50 25.30 30.92 29.40 34.31 36.06 35.70 30.02
Oct - 10 17.24 29.53 33.84 37.89 39.69 48.58 45.67 36.17
Nov - 10 16.01 32.66 37.59 40.73 36.55 36.64 27.68 32.72
Dec - 10 14.19 26.69 26.22 26.95 22.48 26.59 28.86 24.64
Jan - 11 16.57 25.73 32.38 30.20 27.98 25.64 19.84 25.02
Feb - 11 19.23 37.56 39.68 39.60 32.78 33.11 30.67 33.23
Mar - 11 19.37 35.50 42.95 38.81 37.83 46.44 40.69 37.61
Apr - 11 19.28 35.78 40.83 39.72 36.43 46.64 41.17 37.58
Total Year 18.84 33.12 38.40 37.22 34.90 38.70 37.30 34.08
Tab 7 - Raw Data
Date Occupancy ADR RevPar Supply Demand Revenue Census & Sample %
This This This % Rooms STAR
Year % Chg Year % Chg Year % Chg This Year % Chg This Year % Chg This Year % Chg Census Props Census Rooms Participants
Jan 05 50.9 56.38 28.69 12,431 6,325 356,586 4 401 100.0
Feb 05 65.0 56.57 36.79 11,228 7,302 413,080 4 401 100.0
Mar 05 70.3 58.80 41.35 12,431 8,741 513,974 4 401 100.0
Apr 05 71.5 61.84 44.20 12,030 8,598 531,691 4 401 100.0
May 05 62.3 59.69 37.21 12,431 7,748 462,506 4 401 100.0
Jun 05 69.7 61.94 43.16 12,030 8,382 519,169 4 401 100.0
Jul 05 69.6 62.53 43.50 12,431 8,648 540,724 4 401 100.0
Aug 05 73.3 63.50 46.56 12,431 9,115 578,829 4 401 100.0
Sep 05 82.6 61.79 51.02 12,030 9,933 613,754 4 401 100.0
Oct 05 81.1 64.43 52.24 12,431 10,079 649,346 4 401 100.0
Nov 05 70.6 61.21 43.19 12,030 8,488 519,547 4 401 100.0
Dec 05 60.5 57.24 34.63 12,431 7,520 430,438 4 401 100.0
Jan 06 57.7 13.3 59.49 5.5 34.31 19.6 12,431 0.0 7,169 13.3 426,483 19.6 4 401 100.0
Feb 06 66.9 2.9 60.79 7.5 40.68 10.6 11,228 0.0 7,514 2.9 456,784 10.6 4 401 100.0
Mar 06 75.0 6.7 63.05 7.2 47.31 14.4 12,431 0.0 9,329 6.7 588,164 14.4 4 401 100.0
Apr 06 70.6 -1.2 63.91 3.3 45.13 2.1 12,030 0.0 8,496 -1.2 542,951 2.1 4 401 100.0
May 06 68.1 9.2 61.37 2.8 41.77 12.3 12,431 0.0 8,461 9.2 519,249 12.3 4 401 100.0
Jun 06 82.5 18.4 59.75 -3.5 49.30 14.2 12,030 0.0 9,927 18.4 593,129 14.2 4 401 100.0
Jul 06 82.3 18.3 59.63 -4.6 49.08 12.8 12,431 0.0 10,231 18.3 610,063 12.8 4 401 100.0
Aug 06 77.8 6.1 58.95 -7.2 45.86 -1.5 12,431 0.0 9,670 6.1 570,034 -1.5 4 401 100.0
Sep 06 65.0 -21.3 67.41 9.1 43.81 -14.1 12,030 0.0 7,819 -21.3 527,066 -14.1 4 401 100.0
Oct 06 62.0 -23.5 68.18 5.8 42.29 -19.0 12,431 0.0 7,710 -23.5 525,657 -19.0 4 401 100.0
Nov 06 59.8 -15.3 72.10 17.8 43.10 -0.2 12,030 0.0 7,192 -15.3 518,520 -0.2 4 401 100.0
Dec 06 51.3 -15.2 68.80 20.2 35.29 1.9 12,431 0.0 6,377 -15.2 438,728 1.9 4 401 100.0
Jan 07 44.4 -23.0 69.79 17.3 30.99 -9.7 12,431 0.0 5,520 -23.0 385,262 -9.7 4 401 100.0
Feb 07 53.6 -19.9 70.91 16.6 37.99 -6.6 11,228 0.0 6,016 -19.9 426,593 -6.6 4 401 100.0
Mar 07 63.4 -15.6 73.15 16.0 46.35 -2.0 12,431 0.0 7,877 -15.6 576,164 -2.0 4 401 100.0
Apr 07 57.6 -18.4 75.36 17.9 43.44 -3.8 12,030 0.0 6,934 -18.4 522,528 -3.8 4 401 100.0
May 07 62.0 -8.9 75.65 23.3 46.88 12.2 12,431 0.0 7,704 -8.9 582,803 12.2 4 401 100.0
Jun 07 64.2 -22.1 77.70 30.0 49.92 1.3 12,030 0.0 7,729 -22.1 600,568 1.3 4 401 100.0
Jul 07 65.0 -21.1 76.05 27.5 49.41 0.7 12,431 0.0 8,076 -21.1 614,212 0.7 4 401 100.0
Aug 07 64.3 -17.4 74.42 26.2 47.81 4.3 12,431 0.0 7,987 -17.4 594,384 4.3 4 401 100.0
Sep 07 62.2 -4.3 73.73 9.4 45.86 4.7 12,030 0.0 7,483 -4.3 551,703 4.7 4 401 100.0
Oct 07 62.5 0.8 74.73 9.6 46.73 10.5 12,431 0.0 7,773 0.8 580,887 10.5 4 401 100.0
Nov 07 62.1 3.9 75.98 5.4 47.19 9.5 12,030 0.0 7,472 3.9 567,696 9.5 4 401 100.0
Dec 07 46.8 -8.7 71.31 3.7 33.39 -5.4 12,431 0.0 5,821 -8.7 415,100 -5.4 4 401 100.0
Jan 08 50.3 13.3 73.40 5.2 36.92 19.1 12,431 0.0 6,253 13.3 458,989 19.1 4 401 100.0
Feb 08 61.6 15.0 73.34 3.4 45.18 18.9 11,228 0.0 6,916 15.0 507,241 18.9 4 401 100.0
Mar 08 65.9 4.0 73.34 0.3 48.32 4.3 12,431 0.0 8,191 4.0 600,706 4.3 4 401 100.0
Apr 08 74.0 28.5 77.51 2.9 57.39 32.1 12,030 0.0 8,907 28.5 690,343 32.1 4 401 100.0
May 08 69.9 12.9 77.58 2.6 54.27 15.7 12,431 0.0 8,695 12.9 674,577 15.7 4 401 100.0
Jun 08 67.1 4.4 74.91 -3.6 50.24 0.6 12,030 0.0 8,069 4.4 604,410 0.6 4 401 100.0
Jul 08 74.1 14.0 76.15 0.1 56.40 14.1 12,431 0.0 9,206 14.0 701,053 14.1 4 401 100.0
Aug 08 68.7 6.9 75.14 1.0 51.60 7.9 12,431 0.0 8,537 6.9 641,483 7.9 4 401 100.0
Sep 08 74.3 19.4 80.27 8.9 59.62 30.0 12,030 0.0 8,935 19.4 717,186 30.0 4 401 100.0
Oct 08 66.0 5.5 77.42 3.6 51.06 9.3 13,795 11.0 9,098 17.0 704,407 21.3 5 445 90.1
Nov 08 48.9 -21.3 76.08 0.1 37.19 -21.2 13,350 11.0 6,526 -12.7 496,525 -12.5 5 445 100.0
Dec 08 40.7 -13.0 73.04 2.4 29.75 -10.9 13,795 11.0 5,619 -3.5 410,435 -1.1 5 445 100.0
Tab 7 - Raw Data
Jan 09 50.6 0.6 72.38 -1.4 36.64 -0.8 13,795 11.0 6,983 11.7 505,438 10.1 5 445 100.0
Feb 09 62.4 1.2 72.12 -1.7 44.97 -0.5 12,460 11.0 7,770 12.3 560,339 10.5 5 445 100.0
Mar 09 65.4 -0.7 70.76 -3.5 46.30 -4.2 13,795 11.0 9,026 10.2 638,670 6.3 5 445 100.0
Apr 09 69.8 -5.7 74.37 -4.0 51.91 -9.5 13,350 11.0 9,318 4.6 692,989 0.4 5 445 100.0
May 09 61.3 -12.3 77.28 -0.4 47.41 -12.6 13,795 11.0 8,462 -2.7 653,958 -3.1 5 445 100.0
Jun 09 58.7 -12.4 72.86 -2.7 42.79 -14.8 13,350 11.0 7,840 -2.8 571,212 -5.5 5 445 100.0
Jul 09 61.1 -17.4 70.75 -7.1 43.26 -23.3 13,795 11.0 8,435 -8.4 596,766 -14.9 5 445 100.0
Aug 09 60.3 -12.3 60.82 -19.1 36.65 -29.0 13,795 11.0 8,312 -2.6 505,521 -21.2 5 445 100.0
Sep 09 54.7 -26.3 69.02 -14.0 37.78 -36.6 13,350 11.0 7,307 -18.2 504,357 -29.7 5 445 100.0
Oct 09 57.3 -13.2 72.06 -6.9 41.26 -19.2 13,795 0.0 7,899 -13.2 569,181 -19.2 5 445 100.0
Nov 09 46.9 -4.1 68.39 -10.1 32.05 -13.8 13,350 0.0 6,257 -4.1 427,917 -13.8 5 445 100.0
Dec 09 38.8 -4.7 65.61 -10.2 25.47 -14.4 13,795 0.0 5,356 -4.7 351,392 -14.4 5 445 100.0
Jan 10 39.9 -21.3 65.55 -9.4 26.13 -28.7 13,795 0.0 5,499 -21.3 360,450 -28.7 5 445 100.0
Feb 10 50.0 -19.8 70.09 -2.8 35.05 -22.1 12,460 0.0 6,231 -19.8 436,736 -22.1 5 445 100.0
Mar 10 57.0 -12.9 68.24 -3.6 38.91 -16.0 13,795 0.0 7,865 -12.9 536,695 -16.0 5 445 100.0
Apr 10 53.6 -23.2 70.68 -5.0 37.87 -27.0 13,350 0.0 7,154 -23.2 505,609 -27.0 5 445 100.0
May 10 55.9 -8.9 69.27 -10.4 38.73 -18.3 13,795 0.0 7,713 -8.9 534,256 -18.3 5 445 100.0
Jun 10 58.3 -0.8 69.81 -4.2 40.67 -4.9 13,350 0.0 7,778 -0.8 542,988 -4.9 5 445 100.0
Jul 10 53.5 -12.6 68.75 -2.8 36.75 -15.0 13,795 0.0 7,375 -12.6 507,032 -15.0 5 445 100.0
Aug 10 52.9 -12.2 67.80 11.5 35.85 -2.2 13,795 0.0 7,295 -12.2 494,585 -2.2 5 445 100.0
Sep 10 43.2 -21.1 69.53 0.7 30.02 -20.6 13,350 0.0 5,763 -21.1 400,704 -20.6 5 445 100.0
Oct 10 51.7 -9.8 70.02 -2.8 36.17 -12.3 13,795 0.0 7,126 -9.8 498,979 -12.3 5 445 100.0
Nov 10 48.2 2.8 67.89 -0.7 32.72 2.1 13,350 0.0 6,435 2.8 436,861 2.1 5 445 100.0
Dec 10 38.9 0.3 63.28 -3.5 24.64 -3.3 13,795 0.0 5,372 0.3 339,937 -3.3 5 445 100.0
Jan 11 39.3 -1.5 63.72 -2.8 25.02 -4.3 13,795 0.0 5,416 -1.5 345,105 -4.3 5 445 100.0
Feb 11 53.5 7.0 62.13 -11.4 33.23 -5.2 12,460 0.0 6,665 7.0 414,071 -5.2 5 445 100.0
Mar 11 60.5 6.2 62.13 -9.0 37.61 -3.3 13,795 0.0 8,352 6.2 518,872 -3.3 5 445 100.0
Apr 11 56.3 5.0 66.79 -5.5 37.58 -0.8 13,350 0.0 7,510 5.0 501,628 -0.8 5 445 100.0
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Tab 8 - Classic
Jan 05 50.9 56.38 28.69 12,431 6,325 356,586 4 401 100.0
Feb 05 65.0 56.57 36.79 11,228 7,302 413,080 4 401 100.0
Mar 05 70.3 58.80 41.35 12,431 8,741 513,974 4 401 100.0
Apr 05 71.5 61.84 44.20 12,030 8,598 531,691 4 401 100.0
May 05 62.3 59.69 37.21 12,431 7,748 462,506 4 401 100.0
Jun 05 69.7 61.94 43.16 12,030 8,382 519,169 4 401 100.0
Jul 05 69.6 62.53 43.50 12,431 8,648 540,724 4 401 100.0
Aug 05 73.3 63.50 46.56 12,431 9,115 578,829 4 401 100.0
Sep 05 82.6 61.79 51.02 12,030 9,933 613,754 4 401 100.0
Oct 05 81.1 64.43 52.24 12,431 10,079 649,346 4 401 100.0
Nov 05 70.6 61.21 43.19 12,030 8,488 519,547 4 401 100.0
Dec 05 60.5 57.24 34.63 12,431 7,520 430,438 4 401 100.0
Apr YTD 2005 64.4 58.62 37.73 48,120 30,966 1,815,331
Total 2005 68.9 60.76 41.88 146,365 100,879 6,129,644
Jan 06 57.7 13.3 59.49 5.5 34.31 19.6 12,431 0.0 7,169 13.3 426,483 19.6 4 401 100.0
Feb 06 66.9 2.9 60.79 7.5 40.68 10.6 11,228 0.0 7,514 2.9 456,784 10.6 4 401 100.0
Mar 06 75.0 6.7 63.05 7.2 47.31 14.4 12,431 0.0 9,329 6.7 588,164 14.4 4 401 100.0
Apr 06 70.6 -1.2 63.91 3.3 45.13 2.1 12,030 0.0 8,496 -1.2 542,951 2.1 4 401 100.0
May 06 68.1 9.2 61.37 2.8 41.77 12.3 12,431 0.0 8,461 9.2 519,249 12.3 4 401 100.0
Jun 06 82.5 18.4 59.75 -3.5 49.30 14.2 12,030 0.0 9,927 18.4 593,129 14.2 4 401 100.0
Jul 06 82.3 18.3 59.63 -4.6 49.08 12.8 12,431 0.0 10,231 18.3 610,063 12.8 4 401 100.0
Aug 06 77.8 6.1 58.95 -7.2 45.86 -1.5 12,431 0.0 9,670 6.1 570,034 -1.5 4 401 100.0
Sep 06 65.0 -21.3 67.41 9.1 43.81 -14.1 12,030 0.0 7,819 -21.3 527,066 -14.1 4 401 100.0
Oct 06 62.0 -23.5 68.18 5.8 42.29 -19.0 12,431 0.0 7,710 -23.5 525,657 -19.0 4 401 100.0
Nov 06 59.8 -15.3 72.10 17.8 43.10 -0.2 12,030 0.0 7,192 -15.3 518,520 -0.2 4 401 100.0
Dec 06 51.3 -15.2 68.80 20.2 35.29 1.9 12,431 0.0 6,377 -15.2 438,728 1.9 4 401 100.0
Apr YTD 2006 67.6 5.0 61.97 5.7 41.86 11.0 48,120 0.0 32,508 5.0 2,014,382 11.0
Total 2006 68.3 -1.0 63.23 4.1 43.16 3.1 146,365 0.0 99,895 -1.0 6,316,828 3.1
Jan 07 44.4 -23.0 69.79 17.3 30.99 -9.7 12,431 0.0 5,520 -23.0 385,262 -9.7 4 401 100.0
Feb 07 53.6 -19.9 70.91 16.6 37.99 -6.6 11,228 0.0 6,016 -19.9 426,593 -6.6 4 401 100.0
Mar 07 63.4 -15.6 73.15 16.0 46.35 -2.0 12,431 0.0 7,877 -15.6 576,164 -2.0 4 401 100.0
Apr 07 57.6 -18.4 75.36 17.9 43.44 -3.8 12,030 0.0 6,934 -18.4 522,528 -3.8 4 401 100.0
May 07 62.0 -8.9 75.65 23.3 46.88 12.2 12,431 0.0 7,704 -8.9 582,803 12.2 4 401 100.0
Jun 07 64.2 -22.1 77.70 30.0 49.92 1.3 12,030 0.0 7,729 -22.1 600,568 1.3 4 401 100.0
Jul 07 65.0 -21.1 76.05 27.5 49.41 0.7 12,431 0.0 8,076 -21.1 614,212 0.7 4 401 100.0
Aug 07 64.3 -17.4 74.42 26.2 47.81 4.3 12,431 0.0 7,987 -17.4 594,384 4.3 4 401 100.0
Sep 07 62.2 -4.3 73.73 9.4 45.86 4.7 12,030 0.0 7,483 -4.3 551,703 4.7 4 401 100.0
Oct 07 62.5 0.8 74.73 9.6 46.73 10.5 12,431 0.0 7,773 0.8 580,887 10.5 4 401 100.0
Nov 07 62.1 3.9 75.98 5.4 47.19 9.5 12,030 0.0 7,472 3.9 567,696 9.5 4 401 100.0
Dec 07 46.8 -8.7 71.31 3.7 33.39 -5.4 12,431 0.0 5,821 -8.7 415,100 -5.4 4 401 100.0
Apr YTD 2007 54.8 -19.0 72.51 17.0 39.70 -5.2 48,120 0.0 26,347 -19.0 1,910,547 -5.2
Total 2007 59.0 -13.5 74.29 17.5 43.85 1.6 146,365 0.0 86,392 -13.5 6,417,900 1.6
Jan 08 50.3 13.3 73.40 5.2 36.92 19.1 12,431 0.0 6,253 13.3 458,989 19.1 4 401 100.0
Feb 08 61.6 15.0 73.34 3.4 45.18 18.9 11,228 0.0 6,916 15.0 507,241 18.9 4 401 100.0
Mar 08 65.9 4.0 73.34 0.3 48.32 4.3 12,431 0.0 8,191 4.0 600,706 4.3 4 401 100.0
Apr 08 74.0 28.5 77.51 2.9 57.39 32.1 12,030 0.0 8,907 28.5 690,343 32.1 4 401 100.0
May 08 69.9 12.9 77.58 2.6 54.27 15.7 12,431 0.0 8,695 12.9 674,577 15.7 4 401 100.0
Jun 08 67.1 4.4 74.91 -3.6 50.24 0.6 12,030 0.0 8,069 4.4 604,410 0.6 4 401 100.0
Jul 08 74.1 14.0 76.15 0.1 56.40 14.1 12,431 0.0 9,206 14.0 701,053 14.1 4 401 100.0
Aug 08 68.7 6.9 75.14 1.0 51.60 7.9 12,431 0.0 8,537 6.9 641,483 7.9 4 401 100.0
Sep 08 74.3 19.4 80.27 8.9 59.62 30.0 12,030 0.0 8,935 19.4 717,186 30.0 4 401 100.0
Tab 8 - Classic
Oct 08 66.0 5.5 77.42 3.6 51.06 9.3 13,795 11.0 9,098 17.0 704,407 21.3 5 445 90.1
Nov 08 48.9 -21.3 76.08 0.1 37.19 -21.2 13,350 11.0 6,526 -12.7 496,525 -12.5 5 445 100.0
Dec 08 40.7 -13.0 73.04 2.4 29.75 -10.9 13,795 11.0 5,619 -3.5 410,435 -1.1 5 445 100.0
Apr YTD 2008 62.9 14.9 74.58 2.8 46.91 18.1 48,120 0.0 30,267 14.9 2,257,279 18.1
Total 2008 63.1 7.0 75.91 2.2 47.92 9.3 150,413 2.8 94,952 9.9 7,207,355 12.3
Jan 09 50.6 0.6 72.38 -1.4 36.64 -0.8 13,795 11.0 6,983 11.7 505,438 10.1 5 445 100.0
Feb 09 62.4 1.2 72.12 -1.7 44.97 -0.5 12,460 11.0 7,770 12.3 560,339 10.5 5 445 100.0
Mar 09 65.4 -0.7 70.76 -3.5 46.30 -4.2 13,795 11.0 9,026 10.2 638,670 6.3 5 445 100.0
Apr 09 69.8 -5.7 74.37 -4.0 51.91 -9.5 13,350 11.0 9,318 4.6 692,989 0.4 5 445 100.0
May 09 61.3 -12.3 77.28 -0.4 47.41 -12.6 13,795 11.0 8,462 -2.7 653,958 -3.1 5 445 100.0
Jun 09 58.7 -12.4 72.86 -2.7 42.79 -14.8 13,350 11.0 7,840 -2.8 571,212 -5.5 5 445 100.0
Jul 09 61.1 -17.4 70.75 -7.1 43.26 -23.3 13,795 11.0 8,435 -8.4 596,766 -14.9 5 445 100.0
Aug 09 60.3 -12.3 60.82 -19.1 36.65 -29.0 13,795 11.0 8,312 -2.6 505,521 -21.2 5 445 100.0
Sep 09 54.7 -26.3 69.02 -14.0 37.78 -36.6 13,350 11.0 7,307 -18.2 504,357 -29.7 5 445 100.0
Oct 09 57.3 -13.2 72.06 -6.9 41.26 -19.2 13,795 0.0 7,899 -13.2 569,181 -19.2 5 445 100.0
Nov 09 46.9 -4.1 68.39 -10.1 32.05 -13.8 13,350 0.0 6,257 -4.1 427,917 -13.8 5 445 100.0
Dec 09 38.8 -4.7 65.61 -10.2 25.47 -14.4 13,795 0.0 5,356 -4.7 351,392 -14.4 5 445 100.0
Apr YTD 2009 62.0 -1.5 72.44 -2.9 44.90 -4.3 53,400 11.0 33,097 9.4 2,397,436 6.2
Total 2009 57.2 -9.3 70.76 -6.8 40.50 -15.5 162,425 8.0 92,965 -2.1 6,577,740 -8.7
Jan 10 39.9 -21.3 65.55 -9.4 26.13 -28.7 13,795 0.0 5,499 -21.3 360,450 -28.7 5 445 100.0
Feb 10 50.0 -19.8 70.09 -2.8 35.05 -22.1 12,460 0.0 6,231 -19.8 436,736 -22.1 5 445 100.0
Mar 10 57.0 -12.9 68.24 -3.6 38.91 -16.0 13,795 0.0 7,865 -12.9 536,695 -16.0 5 445 100.0
Apr 10 53.6 -23.2 70.68 -5.0 37.87 -27.0 13,350 0.0 7,154 -23.2 505,609 -27.0 5 445 100.0
May 10 55.9 -8.9 69.27 -10.4 38.73 -18.3 13,795 0.0 7,713 -8.9 534,256 -18.3 5 445 100.0
Jun 10 58.3 -0.8 69.81 -4.2 40.67 -4.9 13,350 0.0 7,778 -0.8 542,988 -4.9 5 445 100.0
Jul 10 53.5 -12.6 68.75 -2.8 36.75 -15.0 13,795 0.0 7,375 -12.6 507,032 -15.0 5 445 100.0
Aug 10 52.9 -12.2 67.80 11.5 35.85 -2.2 13,795 0.0 7,295 -12.2 494,585 -2.2 5 445 100.0
Sep 10 43.2 -21.1 69.53 0.7 30.02 -20.6 13,350 0.0 5,763 -21.1 400,704 -20.6 5 445 100.0
Oct 10 51.7 -9.8 70.02 -2.8 36.17 -12.3 13,795 0.0 7,126 -9.8 498,979 -12.3 5 445 100.0
Nov 10 48.2 2.8 67.89 -0.7 32.72 2.1 13,350 0.0 6,435 2.8 436,861 2.1 5 445 100.0
Dec 10 38.9 0.3 63.28 -3.5 24.64 -3.3 13,795 0.0 5,372 0.3 339,937 -3.3 5 445 100.0
Apr YTD 2010 50.1 -19.2 68.77 -5.1 34.45 -23.3 53,400 0.0 26,749 -19.2 1,839,490 -23.3
Total 2010 50.2 -12.2 68.56 -3.1 34.45 -14.9 162,425 0.0 81,606 -12.2 5,594,832 -14.9
Jan 11 39.3 -1.5 63.72 -2.8 25.02 -4.3 13,795 0.0 5,416 -1.5 345,105 -4.3 5 445 100.0
Feb 11 53.5 7.0 62.13 -11.4 33.23 -5.2 12,460 0.0 6,665 7.0 414,071 -5.2 5 445 100.0
Mar 11 60.5 6.2 62.13 -9.0 37.61 -3.3 13,795 0.0 8,352 6.2 518,872 -3.3 5 445 100.0
Apr 11 56.3 5.0 66.79 -5.5 37.58 -0.8 13,350 0.0 7,510 5.0 501,628 -0.8 5 445 100.0
Apr YTD 2011 52.3 4.5 63.69 -7.4 33.33 -3.3 53,400 0.0 27,943 4.5 1,779,676 -3.3
Smith Travel Researchs Trend Report is a publication of Smith Travel Research and is intended solely for use by paid subscribers. Reproduction or distribution of the Trend Report, in whole or part, without written
permission of Smith Travel Research is prohibited and subject to legal action. Site licenses are available. Ownership, distribution and use of the Trend Report and its contents are subject to the terms set forth in the
contract you have entered into with Smith Travel Research. Source 2011 Smith Travel Research, Inc.
Tab 9 - Response Report
2009 2010 2011
STR Open Chg in
Code Name of Establishment City & State Zip Code Aff Date Date Rooms Rms J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D
58214 Baymont Tyler Frankston Highway Tyler, TX 75701 Oct 2008 Oct 2008 44
5249 La Quinta Inn Tyler Tyler, TX 75701 Sep 1983 Sep 1983 130
31294 Fairfield Inn Tyler Tyler, TX 75701 Jun 1995 Jun 1995 64
3116 Quality Inn Conference Center Tyler Tyler, TX 75702 Apr 2004 Apr 1978 140
39755 Holiday Inn Express & Suites Tyler Tyler, TX 75702 Apr 2000 Apr 2000 67
Total Properties: 5 445 - Monthly data received by STR
- Monthly and daily data received by STR
Blank - No data received by STR
Y - (Chg in Rms) Property has experienced a room addition or drop during the time period of the report
Tab 10 - Help
Methodology
While virtually every chain in the United States provides STR with data on almost all of their properties, there are still some hotels that don't submit data. But we've got you covered.
Every year we examine guidebook listings and hotel directories for information on hotels that don't provide us with data. We don't stop there. We call each hotel in our database every year to obtain
"published" rates for multiple categories. Based on this information we group all hotels - those that report data and those that don't - into groupings based off of price level and geographic proximity. We
then estimate the non-respondents based off of nearby hotels with similar price levels.
Similarly, we sometimes obtain monthly data from a property, but not daily data. We use a similar process. We take the monthly data that the property has provided, and distribute it to the individual days
based on the revenue and demand distribution patterns of similar hotels in the same location.
We believe it imperative to perform this analysis in order to provide interested parties with our best estimate of total lodging demand and room revenue on their areas of interest. Armed with this
information a more informed decision can be made.
Glossary
ADR (Average Daily Rate) Open Date
Room revenue divided by rooms sold, displayed as the average rental rate for a Date the property opened as a lodging establishment.
single room.
Percent Change
Affiliation Date Amount of growth, up, flat, or down from the same period last year (month, ytd, three
Date the property affiliated with current chain/flag months, twelve months). Calculated as ((TY-LY)/LY) * "100".
Census (Properties and Rooms) Revenue (Room Revenue)

The number of properties and rooms that exist within the selected property set Total room revenue generated from the sale or rental of rooms.
or segment.
RevPAR (Revenue Per Available Room)
Change in Rooms Room revenue divided by rooms available
Indicator of whether or not an individual hotel has added or removed rooms from
their inventory. Sample % (Rooms)
The % of rooms from which STR receives data. Calculated as (Sample Rooms/Census
Exchange Rate Rooms) * "100".
The factor used to convert revenue from U.S. Dollars to the local currency.
The exchange rate data is obtained from Oanda.com. Any aggregated number Standard Historical Trend
in the report (YTD, Running 3 month, Running 12 month) uses the exchange Data on selected properties or segments starting in 2005.
rate of each relative month when calculating the data.
STR Code
Extended Historical Trend Smith Travel Research's proprietary numbering system. Each hotel in the lodging
Data on selected properties or segments starting in 2000. census has a unique STR code.
Demand (Rooms Sold) Supply (Rooms Available)

The number of rooms sold (excludes complimentary rooms). The number of rooms times the number of days in the period.
Full Historical Trend Twelve Month Moving Average

Data on selected properties or segments starting in 1987. The value of any given month is computed by taking the value of that month and the
values of the eleven preceding months, adding them together and dividing by twelve.
Occupancy
Rooms sold divided by rooms available. Occupancy is always displayed as a
percentage of rooms occupied. Year to Date
Tab 11 - Terms and Conditions
Before purchasing this product you agreed to the following terms and conditions.
In consideration of the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Smith Travel Research, Inc. ("STR") and purchaser of this product ("Licensee") agree as f
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(b) "Licensed Materials" means the newsletters, reports, databases or other information resources, and all lodging industry data contained therein, provided to Licensee hereunder.
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Market and Feasibility Study of A Proposed Hotel

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Market and Feasibility Study of A Proposed Hotel

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MARKET AND FEASIBILITY STUDY OF A

Proposed Lodging Facility

June 24, 2011

Mr. John Taylor

Re: Market and Feasibility Study of a Proposed Lodging Facility

Dear Mr. Taylor:

Sincerely, U.S. Hotel Appraisals, LLC

Kathleen Donahue, Managing Director

Scope of Work Performed

Date of Report: June 24, 2011

Date of Inspection: June 6, 2011

Market Inspection By: Kathleen Donahue

Summary of Market and Hotel Supply

Recommendation of Proposed Facility Scope

EXECUTIVE SUMMARY 1-1

Approximate Required Site Size: 65,000 square feet (1.5 acres)

Approximate Building Size: 28,000 square feet

Recommended Number of Rooms: 65

Recommended Food and Beverage Facilities: Breakfast area

Parking Spaces Recommended: 70

EXECUTIVE SUMMARY 1-2

EXECUTIVE SUMMARY 1-3

Map of Primary Access Routes

ECONOMIC AND DEMOGRAPHIC TRENDS 2-1

Accessibility and Visibility

ECONOMIC AND DEMOGRAPHIC TRENDS 2-2

ECONOMIC AND DEMOGRAPHIC TRENDS 2-3

Market Area Analysis

Market Area Map and Demand Generators

ECONOMIC AND DEMOGRAPHIC TRENDS 2-4

ECONOMIC AND DEMOGRAPHIC TRENDS 2-5

Growth 2011-2016 8.12% 7.43% 5.99%

Growth 2011-2016 7.96% 7.39% 6.34%

Growth 1990-2000 53.99% 46.06% 33.17%

Source: The Nielsen Company

ECONOMIC AND DEMOGRAPHIC TRENDS 2-6

ECONOMIC AND DEMOGRAPHIC TRENDS 2-7

Growth 2010-2015 8.99%

Growth 2010-2015 9.97%

2010 Est. Civ Employed Pop 16+ by Occupation 1,121

Source: The Nielsen Company

ECONOMIC AND DEMOGRAPHIC TRENDS 2-8

Major Employers and Other Pertinent Economic Indicators

Source: Chandler Area Economic Development, 2010

ECONOMIC AND DEMOGRAPHIC TRENDS 2-9

ECONOMIC AND DEMOGRAPHIC TRENDS 2-10

ECONOMIC AND DEMOGRAPHIC TRENDS 2-11

Total Percent Unemployment Rate

Year-to-date through May Recent Month - April

*Letters, if shown next to data points, reflect

Governmental and Environmental Factors

ECONOMIC AND DEMOGRAPHIC TRENDS 2-13

3. HOTEL MARKET TRENDS

National Trends Overview

Average Occupancy 62 $80 Average

Occupancy Average Rate

HOTEL M ARKET TRENDS 3-1

2010 2011 % Change 2010 2011 % Change 2010 2011 % Change

Source: STR - April 2011 Lodging Review

HOTEL M ARKET TRENDS 3-2

Definition of Subject Market

Estimated Segmentation Estimated 2010

Room Occupancy Average Rate RevPAR