FINANCIAL FEASIBILITY STUDY: Holiday Inn, Georgetown 431 Pflugerville Highway Georgetown, Texas 78628

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1 Page 1 of 116 FINANCIAL FEASIBILITY STUDY: Holiday Inn, Georgetown 431 Pflugerville Highway Georgetown, Texas October 11, 2010 This study has been prepared to determine the financial feasibility of operating the recently constructed 74 unit Holiday Inn along the west side of Pflugerville Highway, in Georgetown, Texas. The 2 acre lot is located adjacent to the Homewood Suites, which is under development, and is a short distance north of the existing La Quinta property. As a multi-story building with good signage the hotel is easily visible and accessible to area traffic. The site is convenient to the nearby businesses, restaurants, and other amenities in the local area. Project quality is assumed to match the physical and operating standards of the Holiday Inn brand, a product of Intercontinental Hotel Group (Holiday Express, Candlewood Suites, Crowne Plaza, and Indigo Hotels). The level of quality and acceptance for the Holiday Inn Express brand has been assumed in developing this financial feasibility study. Operating expenses are set at the level of similar product in the mid-price, limited service segment. This study incorporates the current downturn in the Texas hotel market, and the broader national recession. In our Market section, we highlight the historical hotel performance in Texas, noting the effect of past recessions. While every market has its own characteristics, our projections for the local area market consider how the lodging industry reacts in times of economic downturn and in normal times. We anticipate a continuation of the gradual period of recovery which started in early See the Market section for more details. KEY FINDING: Developing and operating a Holiday Inn at this site should generate a strong unleveraged, pre-tax return on total invested capital of approximately 22%, with a return on equity approaching 75%. This return on invested capital assumes a total hotel investment of $5,600,000, with per unit improvements estimated at $64,865 as follows: PO Box Laurel Heights, San Antonio, TX Fax

2 Page 2 of 116 Total Investment 1 Est. Land Investment $ 800,000 for 2 acres Improvements $ per unit Total Investment $ 5,600,000 Pre-Tax Project Return 22.45% 2 Pre-Tax Return on Equity 74.80% 3 With a recent August 2010 opening, cash flow market projections for the Holiday, before taxes and after renovation reserves, should be available for debt service, income tax and dividends as follows: Project Summary Occupancy Average $ Total Percent $ Rate REVPAR Revenue Cash Flow** Year I 60.1% $102.51* $61.66 $1,731,959 $842,875 Year II 69.5% $ $74.65 $2,096,851 $1,072,904 Year III 72.7% $ $81.02 $2,275,787 $1,174,423 Year IV 72.8% $ $83.53 $2,346,512 $1,210,952 Year V 72.8% $ $86.04 $2,416,851 $1,201,318 Year VI 71.4% $ $86.94 $2,442,155 $1,170,726 Year VII 70.2% $ $88.05 $2,473,412 $1,226,208 Year VIII 69.0% $ $89.18 $2,505,070 $1,270,376 Year IX 67.9% $ $90.32 $2,537,132 $1,211,432 Year X 66.8% $ $91.48 $2,569,605 $11,298,799*** *Year I ADR equates to approximately $75 in current market dollars.**before Income Tax & Financing expense, but reflecting $1,132,822 in reserves for capital expenditures / property renovation ($15,308 per unit). ***assumes valuing property at Year 10 cash flow at an 11% return-to-buyer, less 4% expense of sale, plus year 10 cash flow. The above cash flow, assuming a Year 10 sale, has been discounted at the rate of 22.45% to a present value of $5,600,893, approximating the total budgeted investment of $5,600,000. This 22.45% is the project's unleveraged return, provided capital is kept at this level. An estimated capital budget of $64,865 per unit 'turn-key' costs for a hotel of this size and quality are wellbelow average, in our experience. If capital outlays vary from budget for this project, returns will vary accordingly. The following table illustrates the linear nature of financial returns as capital requirements escalate or decline and revenue streams remain stable. 1 developer's estimate of investment in improvements and land. 2 after reserve for on-going renovations 3 assuming 25% equity and 75% debt at a 5% pre-tax debt cost; calculated weighted average.

3 Page 3 of 116 Effect on Returns if Capital Investment Changes 4 Improvements Budget Land Total Discounted Cash Flow Variance Per Unit Total Cost Investment Total Proj On Equity (85%) $55.1 $4,080 $800 $4, % 87.40% (90%) $58.4 $4,320 $800 $5, % 82.88% (95%) $61.6 $4,560 $800 $5, % 78.72% BUDGET $64.9 $4,800 $800 $5, % 74.80% (105%) $68.1 $5,040 $800 $5, % 71.16% (110%) $71.4 $5,280 $800 $6, % 67.76% (115%) $74.6 $5,520 $800 $6, % 64.52% 4 Discounted Cash Flow / Internal Rate of Return.

4 Page 4 of 116 A detailed look at Year III (2012/2013) shows the following: Year III 2012/2013 Room Revenues $2,188,257 Total Revenues $2,275,787 Income Before Fixed Costs $1,388,347 (61.0%) Net Income Before Tax & Fin. $1,105,965 (48.6%) Cash Flow Before Financing $1,174,423 (51.6%) 5 Occupancy % 72.7% Average Daily Rate $ $ REVPAR $ The critical statistic used in this study is REVPAR. REVPAR means revenue per available room per day, and reflects the average daily room revenue yield of every room in a property or market (not just occupied rooms). REVPAR is generated by multiplying occupancy times rate (i.e. REVPAR = % occupancy times average daily rate), and is the most effective and important tool in the evaluation of the success of any lodging concern. SUMMARY OF CRITICAL ASSUMPTIONS: Critical assumptions are summarized as follows, with the Market History and Projection study (page 11) following the Methodology section (page 7). 1. Projections of the I-35 Corridor market reflect a mixture of old and newer competitive hotels. The average hotel room in the local market is 15 years old, half way through its probable cycle, and past its peak performing years. The typical hotel building becomes stylistically and structurally obsolete after about 30 years. Of the 52 hotels in the local market, 14 were built before 1986, and 21 were built since There is typically a wide gap between the performance of new and older properties, with the typical hotel in the area either being relatively new and competitive, or old and on its way to closure. We are comfortable with market projections. After plummeting in 2009 with the recent recession, occupancy is expected to slowly recover to an equilibrium level of 60%. Further, REVPAR in this market is projected to grow by 3.9% annually over the next nine years, reflecting a slow market recovery and the replacement of obsolete hotel product. Detailed local market history and projections commence on page Before deductions of loan principal and interest, before income tax deductions, and before any equity payout.

5 Page 5 of 116 IH-35 CORRIDOR MARKET Year Occupancy % $ REVPAR % $ % $ Projected % $ % $ Historical Annual Compound Growth Rates Past 9 Year Average -1.2% -0.4% Past 4 Year Average -2.4% -2.1% Past 1 Year Average -2.4% -10.6% Future Annual Compound Growth Rates Next 9 Years 0.5% 3.9% Next 5 Years 1.0% 4.7% 2. Versus the local market's REVPAR dollar projections, the REVPAR index of the proposed Holiday Inn starts at 150% of the market average REVPAR in Year I, climbs to 174% in Year II, and peaks at 182% in Years III-V. Thereafter, the REVPAR Index declines due to the normal aging cycle. Detailed REVPAR derivation and subsequent projections commence on page 32. Holiday Inn Data in 2010 $ Year I Year II Year III Base: Name & Quality x Brand Age Adjustment x Site Value Adjustment x Size Adjustment x Other Adjustments x Newness Adjustment = Performance Factor 150% 174% 182% x Market REVPAR $37.25 $37.25 $37.25 = Projected Performance $55.69 $64.77 $67.80 The projected REVPAR performance of the subject hotel, versus the local area market average REVPAR reflects the fact that this hotel is expected to perform at a level well above the market average. The hotel's REVPAR level starts at a level well above the market average in Year I, peaks in Years III-V, then slowly loses ground versus the local market's inflationary growth: 6 12 months ending June 30, 2010.

6 Page 6 of Expenses are set at the level of similar, limited service hotel products from Smith Travel Research Host Reports operating statistics, inflated at 3% per annum. See page 45 for details.

7 Page 7 of 116 METHODOLOGY To develop Pro Forma financial results for the proposed project, two major sets of assumptions have been developed. First, the future market's average REVPAR is forecast on a reasonable and economically-sound basis; the performance of the project is dependent on this market forecast and varies from it only due to specific variables of the project. Second, the specific variables of the project are combined and expressed as an index for each quarter of the forecast, an index that is used to adjust the overall market performance to the specific project. MARKET REVPAR FORECAST The large Austin Metro market is examined historically and projected. The key in the market projections is to stabilize the market in the future at a sustainable, average equilibrium for occupancy, a level which we have determined to be approximately 60% in markets of this type, and lower for rural and highway areas. Over the 20 years from 1987 through 2007, according to the Source Strategies, Inc. database, hotel occupancy in Texas has averaged 59%, and 60% in Texas metros. This occupancy level is highly relevant as a long-term, equilibrium occupancy, a level where investors are neutral about adding new hotel rooms to the market and an average that will reoccur over long periods of time (e.g. 20 years). After the total market area is forecast, we forecast the performance of the local market on a similar basis. Market projections are based on growth rates in real demand (room-nights sold), prices (average daily rates), and supply (rooms available). The key in this projection is to stabilize the local market in the future at a sustainable, average equilibrium for occupancy, a level which we have determined to be approximately 60% in markets of this type. The REVPAR projection of the local market is then the pro forma market environment of the proposed subject development; the project will vary from the norm for only project-specific differences, and then only relatively. PROJECT SPECIFIC VARIABLES: DEVELOPMENT OF PROJECT REVPAR INDICES The first variable from the averages to be developed has to do with the fact that each product type and brand have a typical and identifiable influence on REVPAR

8 Page 8 of 116 performance. This variable is based on its consumer acceptance, its product definition, its level of quality, the price it can command from the consumer, its marketing efforts, and other factors. The value of the brand and product type is termed the Base Value. The second adjustment used on the dollar value of the local area's REVPAR is the Brand Age Adjustment. This is made to reflect the average age of similarly branded hotels on the subject property's performance versus the market average. The opening dates of Holiday Inn Express hotels in similar areas were examined in order to quantify this factor. The next step to developing a project REVPAR index is to determine any further adjustment based on any deviation from a normal project Size. If the number of proposed rooms in the project is significantly above or below the average for that brand and product-type, its performance will also vary from the norm. A lower than average number of rooms should increase per room performance and vice versa. This is due to the fact that consumer demand for a single brand is demand at the project's site, regardless of the number of rooms offered by the hotel (a minor exception here would be a convention hotel). An empirical proof of this evaluation of Size is the major increase in volume enjoyed by numerous hotels throughout Texas that have split into two branded operations, using two different names. For example, the Hilton Hotel Towers Austin added $1,000,000 annually to revenues by splitting off its adjacent, ground-based rooms as a Super 8 Motel. By creating another brand, the Super 8 began to fill demand for budget properties in the immediate area, while the Hilton Towers kept its current upscale customer base. Hence, smaller room counts than average generate higher occupancy than average. Further proof is the correlation between project size and occupancy: the smaller the property, the higher the occupancy. 7 A further, 'Other,' segment adjustment may be made if the proposed product type is under- or over- supplied in the local market, or for other factors. For example, a product type commanding 10% of the Texas market - but zero locally - would command a higher daily rate or occupancy locally because it is a relatively scarce commodity. Further, a subject product far 7 Study detailed in size factor derivation in analysis section.

9 Page 9 of 116 exceeds the product quality of the brand average, then a positive adjustment should be made to reflect a better product than normal. While there is usually a reasonably consistent pattern of site factors for the nearby local chain properties selected, these factors often vary because of unique situations, including: 1) visibility and access differences between nearby sites; 2) any large variation from the norm in the usual number of rooms for a local chain property at a site; 3) a nearby property's quality, the quality of management, last renovation, etc.; and 4) any major new commercial development nearby (e.g. shopping, office complex, hospital). Adjustments can be made for these differences within forecast site factor, based on industry experience. This is the Segment, or Other adjustment. Then the REVPAR potential of the subject Site, regardless of brand, is developed in two ways. First, all other property factors except site are calculated for nearby competitors, the site factor then being used to bring the calculated REVPAR into a match with actual REVPAR performance. In other words, combining all factors including a 'plugged' site factor results in the theoretical REVPAR projection equaling actual REVPAR for each property studied, revealing the mathematical value of individual hotel sites. With the development of the adjustments for Brand/product type, overall Brand Age, Segment, project Size, and Site, a revenue projection for the proposed operation begins to take form by combining these factors into a combined index that is applied to the overall market-wide REVPAR projection, resulting in the forecast of the project's dollar REVPAR. However, this combined index changes with the cumulative age the project. Then, the physical Age of the individual project impacts this REVPAR index. A +12% increase factor is applied to the combined REVPAR index in the operating Years III-V. A first-year start-up adjustment of -8% and a second year adjustment of +7%, followed by a +12% adjustment for years III-V. This factor reflects the major revenue-generating power of new versus old properties. In the sixth year and thereafter, the REVPAR index is then diminished at a rate of 1.67% per annum in order to reflect aging and the normal life-cycle of a hotel. This pattern of declining performance with property aging is based on major studies of economic life-cycle patterns. The first study was conducted on a census of all 25,000 Texas rooms built

10 Page 10 of 116 between 1980 and 1982 (study published in September 1994 issues of MarketShare 8 and the October 1994 issue of Hotel & Motel Management); the second investigation was conducted on all 17,231 rooms built in Texas from 1990 through These Source Strategies, Inc. studies confirm a similar, major study conducted in 1982 at the Holiday corporation on 160 companyowned and company-operated Holiday Inn hotels. Combining all of these factors - Product Type, Brand Age, Site, Size, Segment (other), and Newness (Age) - results in the REVPAR stream for the project. A REVPAR stream from which room revenues, estimated rate, occupancy and roomnights sold are derived. At this point, the investment and operational costs can be laid against the revenue line to generate pro forma financial performance and discounted cash flow analysis. The calculation of the statistic of Operating Costs Per Occupied Room (before fixed/capital costs are deducted) is typically the important cost to examine carefully because it is highly stable and predictable, regardless of occupancy and rate. The Smith Travel Research Host Report of Hotel Operating Statistics, 2009 edition (2008 data) with dollar costs inflated, and Source Strategies, Inc. financial models are the source of operating cost statistics. From national average occupancies, costs are categorized as fixed, semi-variable or variable, resulting in the highly-leveraged profit performance characteristic of lodging products, depending on occupancy and REVPAR performance (i.e. variable costs increase proportionately with higher occupancy levels while fixed costs do not). Furthermore, with a capital expenditures profile provided by the International Society of Hospitality Consultants' CapEx, A Study of Capital Expenditures in the U.S. Hotel Industry, a method has been applied to determine an appropriate amount of renovation reserves to ensure that the property is maintained at the franchisor's required level. All study-area individual hotel/motel five year histories are included in the study, using the Source Strategies, Inc. database of all Texas hotels and motels (includes each hotel s brand, room count, room revenue, occupancy, rate and REVPAR). The methodology of this database is attached as an exhibit. 8 Now Hotel Brand Report.

11 Page 11 of 116 MARKET REVPAR HISTORY: TEXAS 1. Since 1980, the State of Texas (and the wider U.S. market) has experienced other instances of economic turmoil such as the current recession. In the Texas market suffered through 6 consecutive quarters of major demand declines, with a sharp plummet of 24% in the first quarter of Two years later, every quarter in 1986 posted significant demand decreases of 19% or more. The most recent period of decline was in 2001, with the onset of a recession, which was exacerbated by the terrorist attacks of 9/11. Beginning in the Third quarter of 2001, seven of the next eight quarters showed declining room demand, and it was not until the first quarter of 2004 that healthy levels of growth resumed. We have considered the historical market patterns in formulating our projections for all market projections. Though there are differences in each economic downturn, and areas across the state are impacted differently depending on factors driving demand, there is much that can be discerned from historical negative trending performances and the patterns of subsequent periods of recovery. Historical quarterly data highlighting periods of economic decline in Texas follows overleaf:

12 Page 12 of 116 HOTEL MARKET: STATE OF TEXAS # Room-1 Total Htls nites Rooms % Growth Vs Yr Ago Year & and # sold Revenue % 2 $ 3 $ 4 Quarter Mtls Rooms 000's $ 000's Occ. Rate RPAR Sply Real ADR $ Rev 801 1, ,446 9, , , ,967 9, , , ,589 10, , , ,272 9, , , ,062 10, , , ,783 11, , , ,359 12, , , ,855 10, , , ,719 11, , , ,022 11, , , ,756 11, , , ,962 9, , , ,393 8, , , ,954 9, , , ,281 9, , , ,046 8, , , ,074 9, , , ,838 9, , , ,581 10, , , ,042 8, , , ,426 11, , , ,832 12, , , ,876 12, , , ,122 10, , , ,942 8, , , ,430 9, , , ,313 9, , , ,530 8, , , ,297 9, , , ,846 10, , , ,226 11, , , ,113 8, , , ,646 10, , , ,194 11, , , ,718 12, , , ,487 10, , , ,433 10, , , ,409 12, , , ,464 13, , , ,991 10, , Roomnights sold (derived from est. rate and actual revenues) 2. Occupancy nights sold divided by nights available for sale. 3. Avg. price for roomnights sold; Directories, Surveys, & experience. 4. $ Revenue per available room per day (room sales per day)

13 Page 13 of 116 HOTEL MARKET: STATE OF TEXAS # Room-1 Total Htls nites Rooms % Growth Vs Yr Ago Year & and # sold Revenue % 2 $ 3 $ 4 Quarter Mtls Rooms 000's $ 000's Occ. Rate RPAR Sply Real ADR $ Rev 901 2, ,419 11, , , ,824 12, , , ,343 12, , , ,581 10, , , ,607 11, , , ,230 12, , , ,280 13, , , ,777 11, , , ,438 11, , , ,368 12, , , ,434 13, , , ,803 11, , , ,328 11, , , ,631 12, , , ,580 14, , , ,392 11, , , ,471 12, , , ,497 13, , , ,187 13, , , ,119 12, , , ,028 12, , , ,116 13, , , ,593 14, , , ,201 12, , , ,619 13, , , ,156 14, , , ,809 14, , , ,679 12, , , ,315 13, , , ,349 14, , , ,368 14, , , ,088 13, , , ,388 14, , , ,497 15,481 1,057, , ,763 15,927 1,053, , ,238 14, , , ,678 15,010 1,023, , ,933 15,996 1,125, , ,145 16,562 1,111, , ,149 14, , Roomnights sold (derived from est. rate and actual revenues) 2. Occupancy nights sold divided by nights available for sale. 3. Avg. price for roomnights sold; Directories, Surveys, & experience. 4. $ Revenue per available room per day (room sales per day)

14 Page 14 of 116 HOTEL MARKET: STATE OF TEXAS # Room-1 Total Htls nites Rooms % Growth Vs Yr Ago Year & and # sold Revenue % 2 $ 3 $ 4 Quarter Mtls Rooms 000's $ 000's Occ. Rate RPAR Sply Real ADR $ Rev 001 3, ,046 15,883 1,114, , ,709 17,001 1,232, , ,371 17,187 1,219, , ,047 15,228 1,064, , ,343 16,517 1,188, , ,089 17,222 1,239, , ,957 16,802 1,164, , ,914 14, , , ,745 15,867 1,110, , ,166 17,012 1,225, , ,226 16,541 1,158, , ,988 14, , , ,723 15,361 1,057, , ,836 16,737 1,169, , ,624 16,776 1,162, , ,212 14, , , ,147 16,239 1,145, , ,926 17,518 1,237, , ,549 17,679 1,264, , ,158 15,951 1,082, , ,449 17,015 1,214, , ,254 18,593 1,391, , ,115 19,173 1,449, , ,144 18,561 1,383, , ,912 18,910 1,479, , ,788 19,328 1,609, , ,093 19,733 1,606, , ,556 18,004 1,439, , ,745 19,366 1,614, , ,178 19,916 1,756, , ,440 20,324 1,743, , ,908 18,594 1,564, , ,555 19,690 1,738, , ,217 20,654 1,919, , ,163 21,246 1,907, , ,500 19,285 1,694, , ,440 18,710 1,592, , ,553 18,627 1,613, , ,597 19,149 1,593, , ,315 17,295 1,371, , ,069 19,157 1,547, CGR% 28 yrs 3.3% 2.3% 5.9% -0.9% 3.5% 2.6% " 20 yrs 2.7% 2.7% 6.1% 0.0% 3.3% 3.3% " 10 yrs 3.0% 2.4% 5.1% -0.5% 2.6% 2.1% " 5 yrs 2.6% 3.5% 8.5% 0.9% 4.8% 5.7% " 1 yr 5.6% -7.1% -13.9%-11.9% -7.3% -18.4% 1. Roomnights sold (derived from est. rate and actual revenues) 2. Occupancy nights sold divided by nights available for sale. 3. Avg. price for roomnights sold; Directories, Surveys, & experience. 4. $ Revenue per available room per day (room sales per day)

15 Page 15 of 116 Market REVPAR History & Forecast: 2. Over the past nine years, the Austin Metro Market has shown an average annual real growth of 2.1% (room-nights sold), annual growth of 3.3% in total room revenues, and a 0.4% annual gain in REVPAR; note that the severe recession of 2009 depressed the longterm performance numbers. Occupancy dropped 0.8% per year over the nine years. Supply rose by 2.9% per year, with room rates rising 1.2% annually. Over the past four years, a 1% per year rise in demand was coupled with supply growth of 2.7% annually. Revenues over this period gained an average of 3.4% per year, while REVPAR increased a modest 0.7% annually. Room rates rose 2.4% per year. Occupancy decreased over the last four years by 1.6% per year. Over the last two years, demand dropped by 2.1% annually. Average performance was further impinged by 3.3% annual increases in supply. These results caused occupancy to fall by 5.2% annually, followed by REVPAR losses averaging 8.3% per year. Rates fell 3.2% per year, and yearly revenues slipped 5.3%. Most recent history, the 12 months ending June 30, 2010, shows poor results. Real demand dropped by 0.1%, rates by 6.5%, revenues by 6.6% and occupancy by 3.6%. With a supply increase of 3.5%, REVPAR dropped 9.9% for the average hotel. Revenues fell 6.6% for the area market versus 14% for all of Texas. Market occupancy averaged 57.3% versus 53.6% for the state.

16 Page 16 of 116 LODGING MARKET: AUSTIN METRO HISTORY # Room 1 Total Htls nites Rooms Year & and # sold Revenue % 2 $ 3 $ 4 % Growth Vs Yr Ago Quarter Mtls Rooms 000's $000's Occ. Rate RevPar Sply Real ADR $ Rev ,871 1, , ,137 1, , ,570 1, , ,223 1, , ,634 1,144 96, ,867 1,087 83, ,046 1,143 94, ,593 1, , ,785 1,098 91, ,918 1,137 88, ,130 1, , ,288 1, , ,452 1,184 96, ,531 1,082 84, ,418 1,247 97, ,601 1, , ,602 1, , ,302 1,242 98, ,084 1, , ,170 1, , ,105 1, , ,890 1, , ,887 1, , ,189 1, , ,763 1, , ,875 1, , ,774 1, , ,904 1, , ,065 1, , ,922 1, , ,935 1, , ,343 1, , ,661 1, , ,522 1, , ,821 1, , ,455 1, , ,317 1, , ,572 1, , ,962 1, , ,398 1, , CGR% Past 9yrs 2.9% 2.1% 3.3% -0.8% 1.2% 0.4% 4yrs 2.7% 1.0% 3.4% -1.6% 2.4% 0.7% 2yrs 3.3% -2.1% -5.3% -5.2% -3.2% -8.3% 1yr 3.5% -0.1% -6.6% -3.6% -6.5% -9.9% 1. Roomnights sold (derived from est. rate and actual revenues) 2. Occupancy nights sold divided by nights available for sale. 3. Avg. price for roomnights sold; Directories, Surveys, & experience. 4. $ Revenue per available room per day (room sales per day)

17 Page 17 of In the future, overall market occupancy is projected to return to the estimated long-term equilibrium occupancy level of 61% by For the next nine years, real demand (room nights sold) is projected at an average 3.2% growth rate, matching the projected net supply growth of 3.2%. With 2.9% average daily rate inflation, market gross revenues should gain 6.2% annually during the nine year forecast. These assumptions relative to demand, supply, and occupancy reflect the fact that over the past 20 years overall occupancy in Texas has averaged about 60%, a level considered to be 'Equilibrium Occupancy' state-wide. This fact considers that larger and more successful metro area markets generate higher overall occupancy and REVPAR numbers than state averages, while rural areas lag these averages (Source Strategies, Inc. database). 'Equilibrium Occupancy' is further explained by the fact that new investment money will eventually be attracted to an under-supplied market until market occupancy falls and lower returns on capital are the result. The equilibrium occupancy point is where net, new supply is being added at about the same rate as growth in demand, and where return on investment is in balance with the cost of capital. Fueled by moderate, steady demand growth, the Austin Metro has room for appropriatelypositioned new development, added at similar rates to demand. Higher quality new lodging products at or above mid-priced levels are performing very well in the market despite overall performance numbers being moderated by the large number of older, obsolete, budget and independent hotels. These older, existing competitors are highly vulnerable to the superior attractiveness of newly-built lodging. This pattern can be seen in the success of chain operations at or above the mid-priced levels. Given this growth scenario, room supply consequently grows from 28,398 rooms currently to 37,779 in 2019, 33% higher and representing 9,381 net new rooms (gross new openings, less closings). Note that REVPAR growth for every individual hotel unit is well below the total revenue growth of the market, with average REVPAR in our projection rising by 2.8% per annum over the next five years (compared to the 0.4% average REVPAR gain of the past nine years). Revenues are forecast to grow by 6.3% per year on the strength of 3.4% growth in real demand and 2.7%

18 Page 18 of 116 growth in price (room-rates). Occupancy over the next five years is expected to rise by 0.1% per year, as supply rises 3.4% per year. If supply should grow 3,800 rooms over forecast (+10%), without demand also growing faster than forecast, average individual hotel REVPAR would decline by 9% versus forecast, dropping from the forecast REVPAR of $73 to $67 by the last quarter of Real growth for hotel rooms in the metro began to resume in the first quarter of 2010.

19 Page 19 of 116 LODGING MARKET: AUSTIN METRO PROJECTION # Room 1 Total Htls nites Rooms Year & and # sold Revenue % 2 $ 3 $ 4 % Growth Vs Yr Ago Quarter Mtls Rooms 000's $000's Occ. Rate RevPar Sply Real ADR $ Rev ,273 1, , ,537 1, , ,941 1, , ,392 1, , ,263 1, , ,536 1, , ,954 1, , ,421 1, , ,287 1, , ,570 1, , ,002 1, , ,485 1, , ,347 1, , ,640 1, , ,087 1, , ,430 1, , ,287 1, , ,589 1, , ,050 1, , ,403 1, , ,256 1, , ,566 1, , ,041 2, , ,405 2, , ,254 1, , ,573 1, , ,062 2, , ,437 2, , ,281 1, , ,611 1, , ,114 2, , ,500 2, , ,340 1, , ,679 1, , ,198 2, , ,595 2, , ,430 1, , ,779 1, , ,314 2, , ,723 2, , ,553 2, , ,913 1, , ,463 2, , ,885 2, , CGR% 9yrs 3.2% 3.2% 6.2% 0.0% 2.9% 2.9% '5yrs 3.4% 3.4% 6.3% 0.1% 2.7% 2.8% HISTORY CGR% Past 9yrs 2.9% 2.1% 3.3% -0.8% 1.2% 0.4% 4yrs 2.7% 1.0% 3.4% -1.6% 2.4% 0.7% 1yr 3.5% -0.1% -6.6% -3.6% -6.5% -9.9% Roomnights sold (derived from est. rate and actual revenues) 2. Occupancy nights sold divided by nights available for sale. 3. Avg. price for roomnights sold; Directories, Surveys, & experience. 4. $ Revenue per available room per day (room sales per day.

20 Page 20 of 116 LOCAL MARKET PERFORMANCE 4. The subject hotel s local market area currently generates a REVPAR of $37 compared to the Texas average of $44. This REVPAR difference is not a performance shortfall, but rather, it is due to a lack of upscale and luxury hotels locally: PERIOD: TWELVE MONTHS ENDING JUNE 30, 2010 LODGING MARKET: I-35 CORRIDOR FROM FAR NORTH AUSTIN THROUGH GEORGETOWN # * EST. $ EST. #* RMS % RNS % AMT. % EST. $ $ BRAND HTL 000S RMS 000S RNS 000S AMT %OCC RATE RPAR CHAINS MARRIOTT , TOT UPSCALE , RESIDENCE , STAYBRIDG , TOT SUITES , COURTYARD , HILT GARD , HOLID INN , TOT MID/UPS , CANDLWOOD , COMFO STE , SPRNGHILL , TOT MIN STE , BEST WEST , CNTRY INN FAIRFIELD , HAMPTON , HOLID EXP , LA QUINTA , SLEEP INN WINGATE , TOT LTD SVE , EXT AMERI , INTOWN ST VALUE PLC , TOT EXT STA , DAYS INN HO JO , MOTEL , QUALITY RAMADA , RED ROOF , SUPER , TOT BUDGET , TOT CHAINS , TOT INDEP , TOT MARKET , , Roomnights sold (derived from est. rate and actual revenues) 2. Occupancy nights sold divided by nights available for sale. 3. Avg. price for roomnights sold; Directories, Surveys, & experience. 4. $ Revenue per available room per day (room sales per day).

21 Page 21 of 116 Local Market REVPAR History & Forecast: 5. Over the past nine years, the I-35 Corridor Market has shown an average annual real growth of 2.3% (room-nights sold), annual growth of 3.2% in total room revenues, and a 0.4% annual decline in REVPAR; note that the severe recession of 2009 depressed the long-term performance numbers. Occupancy dropped 1.2% per year over the nine years. Supply rose by 3.6% per year, with room rates rising 0.9% annually. Over the past four years, a gain of 0.2% per year in demand was coupled with supply growth of 2.7% annually. Revenues over this period rose an average of 0.6% per year, while REVPAR slipped 2.1% annually. Room rates rose 0.4% per year. Occupancy decreased over the last four years by 2.4% per year. Over the last two years, demand fell 3.1% annually. Average performance was further hampered by a 4.6% annual increases in supply. These results caused occupancy to fall by 7.4% annually, followed by REVPAR losses averaging 12.6% per year. Rates dropped 5.6% per year, and yearly revenues slipped 8.6%. Most recent history, the 12 months ending June 30, 2010, shows poor results. Real demand gained a modest 1.9%, rates fell 8.3%, revenues dropped by 6.7% and occupancy eroded 2.4%. With a supply increase of 4.4%, REVPAR dropped 10.6% for the average hotel. For comparison, revenues fell 14% for all of Texas during the same period. Market occupancy averaged 59% versus 53% for the state. Locally, demand resumed in the first quarter of 2010.

22 Page 22 of 116 LODGING MARKET: AUSTIN IH-35 CORRIDOR HISTORY # Room 1 Total Htls nites Rooms Year & and # sold Revenue % 2 $ 3 $ 4 % Growth Vs Yr Ago Quarter Mtls Rooms 000's $000's Occ. Rate RevPar Sply Real ADR $ Rev , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , CGR% Past 9yrs 3.6% 2.3% 3.2% -1.2% 0.9% -0.4% 4yrs 2.7% 0.2% 0.6% -2.4% 0.4% -2.1% 2yrs 4.6% -3.1% -8.6% -7.4% -5.6% -12.6% 1yr 4.4% 1.9% -6.7% -2.4% -8.3% -10.6% Wider Market History CGR% Past 9yrs 2.9% 2.1% 3.3% -0.8% 1.2% 0.4% 4yrs 2.7% 1.0% 3.4% -1.6% 2.4% 0.7% 1. Roomnights sold (derived from est. rate and actual revenues) 2. Occupancy nights sold divided by nights available for sale. 3. Avg. price for roomnights sold; Directories, Surveys, & experience. 4. $ Revenue per available room per day (room sales per day)

23 Page 23 of Overall market occupancy is projected to recover as the economy rebounds. This translates to a gradual gain in occupancies to the long-term equilibrium occupancy level of 60% over the next 4 years (by 2014). REVPAR should grow at 3.9% annually in the period, coupled with room revenue growth of 7.3% annually, 3.4% annual rate increases and 0.5% annual occupancy gains. Over the next nine years, real demand (room nights sold) is projected at an average 3.7% growth rate, with supply rising 3.2%. These assumptions relative to demand, supply, and occupancy reflect the fact that over the past 20 years overall occupancy in Texas has averaged about 59%, a level considered to be 'Equilibrium Occupancy' state-wide. This fact considers that larger and more successful metro area markets generate higher overall occupancy and REVPAR numbers than state averages, while rural and Interstate highways areas lag these averages (Source Strategies, Inc. database). 'Equilibrium Occupancy' is further explained by the fact that new investment money will eventually be attracted to an under-supplied market until market occupancy falls and lower returns on capital are the result. The equilibrium occupancy point is where net, new supply is being added at about the same rate as growth in demand, and where return on investment is in balance with the cost of capital. The IH-35 Corridor market has room for selectively-positioned new development, in pockets of high demand and/or aged and weak competitors. Higher quality new lodging products at or above mid-priced levels are performing very well in the market despite overall performance numbers being moderated by the large number of older, obsolete, budgets. These older, existing competitors are highly vulnerable to the superior attractiveness of newly-built, major-branded lodging. This pattern can be seen in the success of chain operations at or above the mid-priced levels. Given our growth assumptions, room supply consequently grows from 5,022 rooms currently to 6,754 in 2019, 34% higher and representing 1,731 net new rooms (gross new openings, less closings).

24 Page 24 of 116 Note that REVPAR growth for every individual hotel unit is well below the total revenue growth of the market, with average REVPAR in our projection rising by 4.7% per annum over the next five years (compared to a 0.4% average annual REVPAR decline over the past nine years). Revenues are forecast to grow at 8.6% per year on the strength of 4.7% growth in real demand starting from the trough of and 3.7% growth in price (roomrates). Occupancy over the next five years is expected to gain 1% annually, as supply rises by 3.7% per year. If supply should grow 680 rooms over forecast (+10%), without demand also growing faster than forecast, average individual hotel REVPAR would decline by 9% versus forecast, dropping from the forecast REVPAR of $48 to $44 in the last quarter of 2019.

25 Page 25 of 116 LODGING MARKET: AUSTIN IH-35 CORRIDOR PROJECTION # Room 1 Total Htls nites Rooms Year & and # sold Revenue % 2 $ 3 $ 4 % Growth Vs Yr Ago Quarter Mtls Rooms 000's $000's Occ. Rate RevPar Sply Real ADR $ Rev , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , CGR% 9yrs 3.2% 3.7% 7.3% 0.5% 3.4% 3.9% '5yrs 3.7% 4.7% 8.6% 1.0% 3.7% 4.7% HISTORY CGR% Past 9yrs 3.6% 2.3% 3.2% -1.2% 0.9% -0.4% 4yrs 2.7% 0.2% 0.6% -2.4% 0.4% -2.1% 1yr 4.4% 1.9% -6.7% -2.4% -8.3% -10.6% 1. Roomnights sold (derived from est. rate and actual revenues) 2. Occupancy nights sold divided by nights available for sale. 3. Avg. price for roomnights sold; Directories, Surveys, & experience. 4. $ Revenue per available room per day (room sales per day)

26 Page 26 of The local market REVPAR index history has fluctuated widely versus the metro, with a low point of 61% versus the wider metro market REVPAR recorded in the latest year: MARKET REVPAR HISTORY Local/Total Market Year & Total Local Quarter Year Quarter Mkt Area Market Index Index CGR% 9yrs 0.4% -0.4% 4yrs 0.7% -2.1% 2yrs -8.3% -12.6% 1yr -9.9% -10.6%

27 Page 27 of The REVPAR forecast calls for the local market REVPAR index to rise to a level of 67 in the early years of our projection: MARKET REVPAR PROJECTION Local/Total Market Year & Total Local Quarter Year Quarter Market Market Index Index CGR% 9Yrs 2.9% 3.9% First 5Yrs 2.8% 4.7%

28 Page 28 of A graph of the REVPAR history and projection for the local and metro markets shows that REVPAR will only return to the levels of recent history by about 2016.

29 Page 29 of The occupancy projection for the IH-35 market is below the level of much of the past ten years. Our projection is for the local market to recover to the 60% equilibrium level by 2014:

30 Page 30 of Graphing the Room Nights Sold history and projection also shows the reasonable nature of the expectations for the local market, given a normal level of population growth and investment expected in the area and a national economic recovery:

31 Page 31 of 116 PROJECT REVPAR - DEVELOPMENT OF INDICES Within the above market REVPAR forecast, the expected performance of the proposed hotel is based on six factors. All six factors are independent and modify the market's projected REVPAR average to reflect the subject property's particular characteristics. First, what is the Base Value? It is the effect of the Brand, including specified product quality levels. Second, what is the effect of the brand's overall Age on its average performance? Third, what is the effect of the project's Size, or room-count, on results? Fourth, are there any Other adjustments needed to account for various factors, including under- or over-supply in the product's Segment in which the project will compete? Fifth, what is the effect of the normal Life Cycle patterns on the project (e.g. the effect of the project's Newness compared to older competition on its unstoppable way to obsolescence)? And sixth, what is the likely influence of the selected Site on results? 1. The Base Value factor sets property type/brand/product quality for a Holiday Inn Express at 145%, the average level for Holiday Inn Express in the Exhibit IV hotel market. 9 This valuation is based on the REVPAR performance of the 200 Holiday Express properties currently operating in the Exhibit IV market. These hotels produced a REVPAR of $53 in the year ending June 30, 2010, compared to the Exhibit IV market average REVPAR of $36.46, as follows: $53/ $36.45 = 1.45 or 145% This large sample of Texas Holiday Inn Express properties firmly grounds the basic REVPAR performance that can be expected when operating a Holiday Inn Express hotel in a comparable market, such as the proposed location. It should be noted that a 'Limited Service' hotel like the proposed subject offers a higher consumer value than traditional Full Service hotels because of high efficiency and lower operational costs. It operates without the economic losses from generally unsuccessful hotel Food and Beverage operations and high overhead. 9 The Exhibit IV hotel market here incorporates all Texas hotels except for the Luxury and Upscale Segments. This large market was selected to closely mimic the local market situation/mix and to provide a wider body of information from which to draw the characteristics of specific brand performance.

32 Page 32 of The second adjustment factor, Brand Aging, is set at 0.91 (91%), an effective decrease in performance projections because of the 200 Holiday Express inherent newness in the market. These hotels were built in 2004 on average, and consequently outperformed older hotels in part due to their average physical age. This factor adjusts for the effect of the average age of the existing hotels on the brand's current performance. 10 The brand age adjustment, or life-cycle adjustment, for this and other brands examined includes: BRAND AGING: TEXAS MARKETS Average Brand Aging Brand Opening Adjustment Candlewood Suites Comfort Suites La Quinta Best Western Days Inn The property Size factor - reflecting room count - calls for a +2% performance adjustment for this property, or 102% (1.02). The average Holiday Inn Express hotel in the Exhibit IV market has 77 rooms, slightly more than the 74 unit subject. The size factor assigns a premium if the property is smaller than average and a penalty to the property if it is larger than average. The size adjustment is necessary because demand is not affected by the number of rental rooms offered, as the individual consumer only needs one room: customers do not care whether a hotel offers 100, 125 or 150 rooms and their purchasing behavior will be the same regardless of how many rooms the property offers. Keeping a project conservatively sized assures a higher per-unit revenue yield, particularly in very competitive markets like the local area. The highly-positive effect on revenues and return on capital due to building small, and not 'over-sizing' projects is best explained by the following study, a study that can be replicated with any brand, in almost any situation. The net effect of building small is to run higher occupancy and rate, thereby increasing brand REVPAR by building a belowaverage number of rental units. 10 Point #5, below, adjusts for the physical life-cycle of the subject property, a different and additional consideration.

33 Page 33 of 116 A STUDY OF THE EFFECT OF HOTEL SIZE ON PERFORMANCE IN THE TEXAS HOTEL INDUSTRY THE CASE FOR DOWNSIZING NEW HOTELS 11 Source Strategies, Inc., has long contended that the number of rooms a developer offers in a new property is one of the key factors in determining a venture's relative success or failure. It is every bit as important to size a hotel project properly as it is to select the appropriate brand, and to have chosen to develop in a suitable market and location. For the purposes of this study, we analyzed two separate samplings of hotels. We first looked at Comfort Inns across Texas as a selected brand sampling; then we examined all branded hotels built during a set period of time for a wider sampling. 1) COMFORT INN - ANALYSIS OF SIZING AND ITS IMPACT ON PERFORMANCE In our initial analysis, we selected a group [55 properties] of Texas Comfort Inn branded properties ranging in size from 36 to 75 rooms. The following chart of performance statistics clearly illustrates the fact that on average, the smaller property will perform better, in terms of REVPAR and occupancy, than a larger property of the same brand: 12 Months Ending September 30, 1999 Rooms Occupancy Rate REVPAR Combined: Further, properties with lower room counts were clearly able to sustain a higher level of occupancy. Average occupancy ranged from 66.9% for properties of rooms, downward to a much lower 43.8% average occupancy for properties in the room size bracket. 11 Analyzed and compiled by Douglas W. Sutton and Bruce H. Walker.

34 Page 34 of 116 The above chart and graph clearly illustrate that developers often miss the mark, building more rooms than 'optimum'. 'Optimum' is defined as generating the highest return on invested capital, and is closely tied to occupancy and REVPAR. Analyzing the above data provides a measure of the effect of over-building. For the typical range of rooms for Comfort Inn projects occupancy dropped 23 points (a full 35%) from 67% to 44% as room counts escalated. The key question is, 'how to apply this principle to a given hotel project.' Naturally, each project would have to be judged on its individual merits, but looking at an 'average' project for a single brand and product is very revealing. BRANDED HOTELS - ANALYSIS OF SIZING AND ITS IMPACT ON PERFORMANCE In our second analysis, we looked at a sampling [91 properties] of Texas branded hotels of less than 135 rooms which were constructed from For our analysis we examined performance results from the year 1985 when all subject hotels were 10 to 15 years old, to well into their aging life cycles. The following table of performance statistics from 1985 for branded properties throughout Texas clearly illustrates the downward curve, with a pronounced and methodical erosion of performance as room counts increased: # of Hotels Rooms Occupancy Rate REVPAR Combined:

35 Page 35 of 116 The following graph provides a clear picture of descending performance as room counts increase. Average occupancy ranged from 70% for properties of 44 rooms or less, downward to a much lower 55.5% average occupancy for properties in the size bracket, after peaking at 73.9% in the size range. The data is clear: in almost every case small hotels outperform larger ones. Common sense explains this occurrence: a successful 100 room hotel will inevitably prompt the development of one or more new, small hotels of similar quality in the immediate area. In a competitive market environment, the smaller hotel has a distinct advantage and wins - almost every time. The fact remains that if one builds a smaller than average property for a given brand, results should be improved over the average: the converse of this fact is also true. 4. Fourth, the Segment or Other adjustment factor is set at 105% (1.05), or above average, due to the inclusion of mini-suites in the project. Mini-suites average about 400 square feet, compared to the industry standard room size of 324 square feet (the average for a Holiday Inn sized room bay). The mini-suite rooms in the subject property will be a very strong attraction to travelers looking for comfort and value in their hotel. The attractiveness of the extra space in suite and mini-suite product offers consumers greater value and comfort. The family appreciates the higher 'sleeping' capacity of a suite unit and its inherent economy, including a free breakfast. With microwave kitchen facilities, coffeemaker

36 Page 36 of 116 and a small refrigerator, preparation of both snacks and dinners is an option, creating extra value and convenience. All this is an equally valuable asset to the business traveler. The dual attraction of mini-suite hotels to both leisure and business travelers is what keeps the occupancy high on both weekends and weekdays; it is the most appropriate product type of all to build in today's lodging market, especially where high-priced demand is strong. 5. Fifth, the Aging Adjustment factor reflects the standard hotel life cycle: 92% (-8%) in Year I; 107% for Year II; 112% for Years III through V; followed by a 1.67% annual decline in the REVPAR index starting in Year VI. The aging factor also mirrors extensive studies of hotel life-cycles conducted by Source Strategies, Inc.'s principal, Bruce Walker, when heading the Holiday Inn Corporation's strategic planning department ( ). It also reflects recent research on the life cycles of 25,000 Texas hotel rooms, developed from 1980 through 1982, and then again in 1990 through 1992, with each group's performance versus the market tracked to the present (MarketShare newsletter, "The Hotel Life Cycle - It's Very Real" published September 1994). 6. The last factor, Site, is set at 1.15 (115%), or above average for the local market. The site values for this property, as well as for nearby existing competitors have been developed by quantifying the influence site has had on their performance. Applying known adjustment factors to existing properties, except for a site factor, lets us solve for the site value itself. Source Strategies' site methodology 'backs into' the value of the site by matching actual performance against known factors, using the site factor as the 'plugged number.' The differences between the closest key competitors appear to be both explainable and reasonable. The site value is 'plugged' so that projected REVPAR versus market approaches the actual REVPAR over the past 12 months. Overall, current performances would indicate that a 115% site value for the Holiday Express would be a responsible estimate with the addition of new supply pressure in the market:

37 Page 37 of 116 SITE & PROPERTY DERIVATION Days/ Comfort La Quality G-town Data in 2010 $ Suites Quinta Inn Inn Base: Name & Quality x Brand Age Adjustment x Site Value Adjustment x Size Adjustment x Other Adjustments x Newness Adjustment = Performance Factor 181% 112% 91% 50% x Market REVPAR $37.25 $37.25 $37.25 $37.25 = Projected Performance $67.50 $41.61 $33.83 $18.61 Actual Yr End 2nd 10 $67.54 $41.73 $33.94 $18.66 Index (Proj. Vs Actual) Units in Above Subject Average Units Size Adjustment (33%) Year Built Combining all six factors that affect a hotel's REVPAR performance, we calculate that the proposed hotel's REVPAR will achieve 182% of the market average REVPAR in Years III- V, declining slowly thereafter: Holiday Inn Express Georgetown Data in 2010 $ Year I Year II Year III Base: Name & Quality x Brand Age Adjustment x Site Value Adjustment x Size Adjustment x Other Adjustments x Newness Adjustment = Performance Factor 150% 174% 182% x Market REVPAR $37.25 $37.25 $37.25 = Projected Performance $55.69 $64.77 $67.80

38 Page 38 of 116 COMBINING THE ABOVE MARKET REVPAR PROJECTION AND THE HOTEL'S REVPAR INDEX TO DEVELOP REVENUES, OCCUPANCY, AND RATE Using the projected Year III REVPAR index of 182%, the above process generates a theoretical REVPAR of $67.80 (in latest year market dollars). This is the result of the Year III performance index of 182% (1.82) multiplied by the current market average REVPAR of $ Therefore, if the property were open today and were in its third year of operation, it should theoretically be operating at the following level against the latest year's market results: a $67.80 REVPAR computes to gross room revenues of approximately $1,831,278 ($67.80 times 74 units times 365 days). Please note that the actual effect on the market due to the introduction of this project and other new hotels is fully reflected in subsequent pro forma market projections and financials. In the latest year's dollars, this projection for the project's Year III revenue breaks down seasonally as follows: Quarter Fourth First Second Third Year III Room Revenues $401,481 $464,966 $517,782 $447,048 $1,831,278 % of Year 21.9% 25.4% 28.3% 24.4% 100 Seasonal Index REVPAR$ $58.97 $69.81 $76.89 $65.67 $67.80 Source Strategies, Inc.'s projections of a reasonable rate and occupancy mix, a split of the Holiday Inn Express Hotel & Suites' REVPAR for occupancy and rate, in latest year dollars, would be as follows: Quarter Fourth First Second Third Year III ADR - $ $81.85 $95.96 $ $89.65 $93.13 Occupancy % 72.0% 72.8% 73.2% 73.2% 72.8% REVPAR$ $58.97 $69.81 $76.89 $65.67 $67.80

39 Page 39 of 116 Tests For REASONABILITY Comparisons can be made to assess the reasonable nature of the above market and subject projections: 1. Individual property projections depend importantly on the projection of local market REVPAR - forecast to rise at a reasonable, conservative rate through 2020, starting at the current, highly-depressed level. Over the next nine years market REVPAR is projected to grow 3.9% per year (versus the 0.4% annual REVPAR decrease of the past nine years). REVPAR encompasses the net effects of supply and demand. Over the next nine years, we are comfortable with the 3.7% real compound growth projected for the local market, higher than the projected net supply growth of 3.2% annually, and resulting in the return to the expected equilibrium occupancy level of 60% in the early years of our projection. 2. The derived Base Value of 1.45 (145%) for a Holiday Inn Express in the Exhibit IV market area is reasonable when compared to the Base Values of other hotels in these same markets. The hierarchy of REVPAR indices for selected brands is shown below: REVPAR Index Comparison 12 Residence Inn 201 Hampton Inn 165 Courtyard by Marriott 164 Holiday Express 145 Comfort Suites 112 Candlewood Suites 108 La Quinta Inn 105 Best Western 99 Comfort Inn 92 Quality Inn 71 Super 8 70 Motel 6 65 Days Inn Developing actual adjustment factors for the existing properties - so that their projected REVPAR equals actual REVPAR - indicates why the REVPAR index projection has a high probability of being achieved. The REVPAR differences between the closest key competitors appear to be both explainable and reasonable, using the standard, Source Strategies' adjustment 12 Unadjusted for physical aging of each brand.

40 Page 40 of 116 factor quantification. For each property, revenues are driven first by chain name affiliation and product type, and are further adjusted for size, segment, hotel age and site location. The REVPAR Index is then multiplied by the actual local area market average to generate dollar REVPAR. We also include the theoretical Year III performance of the subject hotel, as follows: REVPAR COMPARISON Holiday Days/ Express Comfort La Quality G-town Data in 2010 $ Yr III Suites Quinta Inn Inn Base: Name & Quality x Brand Age Adjustment x Site Value Adjustment x Size Adjustment x Other Adjustments x Newness Adjustment = Performance Factor 182% 181% 112% 91% 50% x Market REVPAR $ = Projected Performance $ Actual Past Year n/a Index (Proj. Vs. Actual n/a The projected REVPAR performance of the Holiday Inn Express Hotel & Suites versus the local market average reflects the fact that this hotel s physical quality will be reasonably high, and will carry a popular brand name in a strong location.

41 Page 41 of The graphically projected Occupancy performance of the Holiday Inn Express versus the local market average reflects the fact that this hotel will be well above the overall market average because of its brand, its product offering, its location, and its age. The Holiday Express Occupancy gradually declines toward the market average after several years. 6. In the overall market, any new hotel will have an inordinate advantage over the old; the playing field here is not level as the lodging consumer almost always votes for 'new' versus old. From Holiday Inn consumer research, 'new' means 'clean,' and 'old' means 'dirty' to the consumer. Cleanliness is the number one consumer selection factor in lodging. The average hotel room in the local market is 15 years old, about half of the way through its life cycle, and past its peak performing years. The typical hotel building becomes stylistically and structurally obsolete after 30 years. Of the 52 hotels in the local market, 14 were built before 1986, and 21 were built since There is typically a wide and dramatic gap between the performance of new and older properties, with the typical hotel in the area either being relatively new and competitive, or older and on its way to closure.

42 Page 42 of 116 I-35 CORRIDOR MARKET PROPERTIES Year # Open Rooms Local Hotel VALUE PLACE - AUSTIN BRAKER COURTYARD AUSTIN NORTH PARK FAIRFIELD INN AND SUITES COMFORT SUITES HILTON GARDEN INN-AUSTIN VALUE PLACE HOTEL BUDGET INN COMFORT SUITES ECONOMY INN INTOWN SUITES EXTENDED STAY AMERICA 6197 CH COUNTRY INN & SUITES SPRINGHILL SUITES CANDLEWOOD SUITES HOLIDAY I & S FMR AMERISUITES HAMPTON INN ROUND ROCK MARRIOTT LA FRONTERA STAYBRIDGE SUITES RESIDENCE INN-AUSTIN NORT SPRINGHILL SUITES BY MARRIOTT COMFORT SUITES HOLIDAY EXPRESS FMR QUALITY ST HOLIDAY EXPRESS FMR WINGATE 3/ HOLIDAY EXPRESS STIL WINGATE INN RESIDENCE INN - ROUND ROC HILTON GARDEN INN LA QUINTA INN FMR BAYMT CHG RO EXTENDED STAY DELUXE FMR WELLE EXTENDED STAY AMERICA FMR CROS COURTYARD BY MARRIOTT BEST WESTERN EXECUTIVE IN DAYS INN INN & SUITES FMR RODE SUPER 8 FMR TRAVELERS RED ROOF INN #302 FMR SLEEP BEST WESTERN ATRIUM NORTH RAMADA LTD FMR HOJO/RALTD/HERI LA QUINTA INN # LA QUINTA INN # AUSTIN MOTOR INN QUALITY INN FMR COMFORT INN AUSTIN VILLAGE MOTOR INN FMR R BUDGET MOTEL FMR HOMESTYLE INN RED ROOF INN #210 N MOTEL 6 # AUSTIN SUITES FMR TRAVL 3/09 N MOTEL 6 # SAN GABRIEL MOTEL DAY'S INN-GEORGETOWN WALNUT FOREST MOTEL POOJA BUS BUDGET INN HOW JOHNSON PLAZA FMR 4PTS 3/0

43 Page 43 of 116 PRO FORMA: Applying the project derivation factor (182% Year III-V) to the quarterly local market REVPAR forecast results in the following progression: PROJECT REVPAR PROJECTION Subject/ Year & Local Subject Market Index Quarter Market Hotel Qtr Year CGR% 9 Yrs 3.2% 4.5% First 5 Yrs 3.4% 7.1% -CGR% measured from open date-

44 Page 44 of 116 This REVPAR forecast is then extended to room revenues - multiplying REVPAR by the number of days in each quarter and by the number of rooms in the project - and to occupancy, estimated rate and to roomnights sold: RESULTING PROJECTION: Holiday Inn Express Hotel & Suites Resulting Aver. Room- Year& Room Annual % Daily nghts Annual Basis Quarter Revenues Basis Occ Rate Sold RMNTES Occ. Rate 104 $363, $ , $425, $ , $466, $ , $409,020 $1,665, $ ,090 16, % $ $443, $ , $513, $ , $568, $ , $491,069 $2,016, $ ,722 18, % $ $479, $ , $555, $ , $618, $ , $534,193 $2,188, $ ,987 19, % $ $496, $ , $572, $ , $637, $ , $550,206 $2,256, $ ,987 19, % $ $511, $ , $589, $ , $656, $ , $566,699 $2,323, $ ,987 19, % $ $515, $ , $594, $ , $664, $ , $573,952 $2,348, $ ,903 19, % $ $522, $ , $601, $ , $673, $ , $581,298 $2,378, $ ,821 18, % $ $528, $ , $609, $ , $681, $ , $588,738 $2,408, $ ,741 18, % $ $535, $ , $617, $ , $690, $ , $596,273 $2,439, $ ,662 18, % $ $542, $ , $625, $ , $699, $ , $603,905 $2,470, $ ,584 18, % $ $549, $ , $633, $ , $708, $ , $610,150 $2,500, $ ,496 17, % $ $554, $ , $639, $ , $715, $ , $616,459 $2,526, $ ,411 17, % $ $560, $ , $646, $ , $723, $ , $622,834 $2,552, $ ,326 17, % $ CGR%9Yr 4.5% 1.2% 3.3% 1.2% First5Y 7.1% 3.5% 3.5% 3.5%

45 Page 45 of 116 OPERATING COSTS 13 Profitability and returns reflect the above revenue projections and the following other critical assumptions: operating costs per occupied room approximate Limited Service hotels of similar size, rate, and occupancy and include appropriate fixed, semi-fixed and variable costs (Smith Travel Research's 2009 Host Report for year 2008 data, and Source Strategies, Inc.). Estimates of operating costs take into account the lower costs of the West South Central United States, which had an average Per Occupied Room Cost of $43.51 (including 5% royalties) in 2008 in Limited Service hotels - versus a national average of $ or 81% of the U.S. average. The following cost comparisons have all been adjusted to reflect this 19% lower-cost environment that may be expected in operating a hotel in the West South Central Region. Rooms only Operating Costs per Occupied Room (before Fixed Charges) are estimated at $43.00 For Year I ($698,568 divided by 16,246 roomnights sold); $43.92 for Year II ($824,746 divided by 18,777), and $45.18 for Year III ($887,440 divided by 19,641). These numbers compare to industry-wide data as follows: a) $52.54 in the Host Report for Upscale hotels in 2008 (average rate of $126.29), adjusted to Southwest. This POR cost translates to $59.13 when inflated to Year 2012 dollars. b) $48.32 in the Host Report for Larger hotels (125+ rooms) in 2008 (average rate of $117.17), adjusted to Southwest. This POR cost translates to $54.38 when inflated to Year 2012 dollars. c) $35.66 in the Host Report for Suburban hotels in 2008 (average rate of $89.48), adjusted to Southwest. This POR cost translates to $40.14 when inflated to Year 2012 dollars. d) $34.98 in the Host Report for Mid-Priced hotels in 2008 (average rate of $84.99), adjusted to Southwest. This POR cost translates to $39.38 when inflated to Year 2012 dollars. - Versus room revenues: a necessary marketing expense of 7% in Year I and thereafter. Marketing includes reservation and advertising fees, sales expense, local advertising and the always important outdoor billboards. An annual royalty fee of 6% has been applied, and no annual management fee has been charged. 13 The calculation of the statistic of Operating Costs Per Occupied Room (before fixed/capital costs are deducted) is typically the important cost to examine carefully because it is highly stable and predictable, regardless of occupancy and rate. Looking at costs on a percentage basis can be highly misleading because of the high variability in average room revenues.

46 Page 46 of 116 A reserve for renovations is taken and subtracted from projected cash flows annually; such renovation reserves amount to $1,132,822 in the first ten years ($15,308 per unit). Reserves insure that future revenue streams continue by maintaining product quality at excellent levels as required by the franchisor. Reserves are based on an extensive 2001 study, CapEx, by the International Society of Hospitality Consultants. The study shows that required reserves average 5.5% over a 20 year period. - Total capital of $5,600,000 is allocated for the development of the project. The estimated turnkey cost of $64,865 per unit is below average for the development of a hotel of this size and quality, in our experience. Land is valued at $800,000. Should capital needs prove to be greater, then returns would change proportionately. The developer s estimates of necessary capital include: Investment Est. Land Investment $ 800,000 for 2 acres Improvements $ per unit Total Investment $ 5,600,000 The pro forma profit and cash flow statements are shown overleaf:

47 Page 47 of 116 open Oct 1, 2010 Holiday Inn Express Georgetown Land Value: 800,000 # Rooms: 74 Investment per room excluding land: $64,865 QUARTER: Fourth First Second Third Year Rmnites Sold 4,043 4,052 4,061 4,090 16,246 Rmnites Avail 6,808 6,660 6,734 6,808 27,010 Occupancy % 59.4% 60.8% 60.3% 60.1% 60.1% Avg Rate $90.00 $ $ $ $ REVPAR $53.45 $63.88 $69.35 $60.74 $61.66 % Revenues Room Revenues $363,870 $425,460 $467,015 $409,000 1,665, % Other 14,555 17,018 18,681 16,360 66, % Total Sales $378,425 $442,478 $485,696 $425,360 $1,731, % Operating Expense Administration 15,137 17,699 19,428 17,014 69, % Housekeeping 15,161 15,195 15,229 15,338 60, % Laundry 6,065 6,078 6,092 6,135 24, % Front Desk 16,172 16,208 16,244 16,360 64, % Miscellaneous 7,568 8,850 9,714 8,507 34, % Taxes/Benefits 7,212 7,684 8,005 7,602 30, % Total Payroll 67,316 71,713 74,711 70, , % -Room Expense S:Linen & Laundry 6,065 6,078 6,092 6,135 24, % Comp. F & B 8,086 8,104 8,122 8,180 32, % Total Room 14,151 14,182 14,214 14,315 56, % -Other Expense Phone Lines 2,031 2,031 2,031 2,031 8, % Elec/Utility 18,194 18,234 18,275 18,405 73, % Maint. & Repair 5,676 6,637 7,285 6,380 25, % Total Other 25,901 26,902 27,591 26, , % -Gen & Admin Marketing & Adver 25,471 29,782 32,691 28, , % Franchise Fee 21,832 25,528 28,021 24,540 99, % Credit Card 7,277 8,509 9,340 8,180 33, % Tot Admin & Gen 54,581 63,819 70,052 61, , % -Total Op Expense 161, , , , , % Gross Op Profit 216, , , ,922 1,033, % -Fixed Charges Insurance 12,990 12,990 12,990 12,990 51, % Property Tax 15,137 17,699 19,428 17,014 69, % Deprec SL 39 Yrs. 30,769 30,769 30,769 30, , % Tot Capital Expen 58,896 61,458 63,187 60, , % Net Income Before 157, , , , , % Tax & Financing Depreciat. AddBac 30,769 30,769 30,769 30, , % Renovation Reserv (15,137) (17,699) (19,428) (17,014) (69,278) -4.0% Cash Flow Before 173, , , , , % Tax & Financing -see following 2 pages for the next 9 years-

48 Page 48 of 116 Holiday Inn Express Georgetown Compound # Rooms: 74 Growth Year Yr 2-10 Rmnites Sold 18,777 19,641 19,664 19,664 19,289 18,967 18,650 18,338 18, % Rmnites Avail 27,010 27,010 27,010 27,010 27,010 27,010 27,010 27,010 27, % Occupancy % 69.5% 72.7% 72.8% 72.8% 71.4% 70.2% 69.0% 67.9% 66.8% 1.2% Avg Rate* $ $ $ $ $ $ $ $ $ % REVPAR $74.65 $81.02 $83.53 $86.04 $86.94 $88.05 $89.18 $90.32 $ % RoomRevenues 2,016,203 2,188,257 2,256,262 2,323,895 2,348,226 2,378,281 2,408,721 2,439,550 2,470, % Other 80,648 87,530 90,250 92,956 93,929 95,131 96,349 97,582 98, % Total Revenues 2,096,851 2,275,787 2,346,512 2,416,851 2,442,155 2,473,412 2,505,070 2,537,132 2,569, % Operating Expense - Payroll Administration 71,357 73,497 75,702 77,973 80,313 82,722 85,204 87,760 90, % Housekeeping 72,526 78,139 80,578 82,995 83,855 84,928 86,014 87,113 88, % Laundry 29,010 31,256 32,231 33,198 33,542 33,971 34,406 34,845 35, % Front Desk 77,361 83,349 85,950 88,528 89,445 90,590 91,749 92,920 94, % Miscellaneous 41,237 44,428 45,815 47,189 47,678 48,288 48,906 49,530 50, % Taxes/Benefits 34,979 37,280 38,433 39,586 40,180 40,860 41,553 42,260 42, % Total Payroll 326, , , , , , , , , % -Room Expense Linen & Laundry 29,010 31,256 32,231 33,198 33,542 33,971 34,406 34,845 35, % Comp. F & B 38,681 41,674 42,975 44,264 44,722 45,295 45,874 46,460 47, % Total Room 67,691 72,930 75,206 77,462 78,264 79,267 80,280 81,305 82, % -Other Expense Phone Lines 9,670 10,419 10,744 11,066 11,181 11,324 11,469 11,615 11, % Electric 87,031 93,767 96,693 99, , , , , , % Repairs & Maint 31,453 34,137 35,198 36,253 36,632 37,101 37,576 38,057 38, % Total Other 128, , , , , , , , , % -Gen & Admin Marketing & Adv 141, , , , , , , , , % Franchise Fee 120, , , , , , , , , % Credit Card 40,324 43,765 45,125 46,478 46,965 47,566 48,174 48,791 49, % Total G & A 302, , , , , , , , , % -TotOperExp. 824, , , , , , , ,873 1,010, % GrossOpProfit 1,272,105 1,388,347 1,431,524 1,474,422 1,488,207 1,505,704 1,523,388 1,541,259 1,559, %

49 Page 49 of 116 Holiday Inn Express Georgetown Compound # Rooms: 74 Growth Year Yr 2-10 Rmnites Sold 18,777 19,641 19,664 19,664 19,289 18,967 18,650 18,338 18, % Rmnites Avail 27,010 27,010 27,010 27,010 27,010 27,010 27,010 27,010 27, % Occupancy % 69.5% 72.7% 72.8% 72.8% 71.4% 70.2% 69.0% 67.9% 66.8% 1.2% Avg Rate* $ $ $ $ $ $ $ $ $ % REVPAR $74.65 $81.02 $83.53 $86.04 $86.94 $88.05 $89.18 $90.32 $ % RoomRevenues 2,016,203 2,188,257 2,256,262 2,323,895 2,348,226 2,378,281 2,408,721 2,439,550 2,470, % Other 80,648 87,530 90,250 92,956 93,929 95,131 96,349 97,582 98, % Total Revenues 2,096,851 2,275,787 2,346,512 2,416,851 2,442,155 2,473,412 2,505,070 2,537,132 2,569, % Income BefFixe 1,272,105 1,388,347 1,431,524 1,474,422 1,488,207 1,505,704 1,523,388 1,541,259 1,559, % -Fixed Charges Insurance 62,906 68,274 70,395 72,506 73,265 74,202 75,152 76,114 77, % Land Lease ERR Property Tax 83,874 91,031 93,860 96,674 97,686 98, , , , % Depr. SL 39 Yrs 123, , , , , , , , , % Total Fixed Ch. 269, , , , , , , , , % Income Before 1,002,248 1,105,965 1,144,192 1,182,166 1,194,179 1,209,488 1,224,957 1,240,583 1,256, % Tax & Financing Depr. AddBack 123, , , , , , , , , % RenovReserve (52,421) (54,619) (56,316) (103,925) (146,529) (106,357) (77,657) (152,228) (313,492) 18.3% Cash Before 1,072,904 1,174,423 1,210,952 1,201,318 1,170,726 1,226,208 1,270,376 1,211,432 1,065, % Tax & Financing

50 Page 50 of 116 October 11, 2010 OPINION This report is based on independent opinion, surveys and research from sources considered reliable. No representation is made as to accuracy or completeness and no contingent liability of any kind can be accepted. The study projections are dependent on the developer building and operating the hotel as a Holiday Inn Express Hotel & Suites, including certain amenities, and spending the appropriate operating funds necessary to generate projected revenues, most especially budgeted funds for aforementioned amenities and for marketing, including a listing in the American Automobile Association Texas Tourbook. It is our opinion that this report fairly and conservatively represents the room revenues, profitability and return on investment performance that can be achieved by developing and operating a 74 unit Holiday Inn Express Hotel & Suites at the aforementioned site in Georgetown, Texas. Please contact us with any questions at (210) Respectfully submitted, Douglas W. Sutton, Executive Vice President Bruce H. Walker, President

51 Page 51 of 116 EXHIBITS: I Metro & Local Market History, Aggregated Basis: II Local Market: By Segment and Brand, Past Five Years, Annual Basis III Individual Hotel/Motel Histories For Local Market IV Texas Excluding and Luxury & Upscale Segments V The Case For Downsizing Hotels VI Start-up Performance of New Hotels VII CAPEX Study of Capital Expenditures VIII 2 nd Quarter 2010 Texas Hotel Report IX Preparer Qualifications and Client List X Source Strategies Database Methodology XI Hotel Brand Report Newsletter

52 Page 52 of 116 EXHIBIT I HOTEL MARKET: AUSTIN METRO AREA # Rnights $ Rooms Hotels # sold 1 Revenues % $ $ YRQ Motels Rooms (000s) (000 s) OCC2 Rate3 RPAR ,146 1, , ,544 1, , ,871 1, , ,137 1, , *TOTAL , , ,570 1, , ,223 1, , ,634 1, , ,867 1, , *TOTAL , , ,046 1, , ,593 1, , ,785 1, , ,918 1, , *TOTAL , , ,130 1, , ,288 1, , ,452 1, , ,531 1, , *TOTAL , , ,418 1, , ,601 1, , ,602 1, , ,302 1, , *TOTAL , , ,084 1, , ,170 1, , ,105 1, , ,890 1, , *TOTAL , , ,887 1, , ,189 1, , ,763 1, , ,875 1, , *TOTAL , , ,774 1, , ,904 1, , ,065 1, , ,922 1, , *TOTAL , ,

53 Page 53 of 116 HOTEL MARKET: AUSTIN METRO AREA # Rnights $ Rooms Hotels # sold 1 Revenues % $ $ YRQ Motels Rooms (000s) (000 s) OCC2 Rate3 RPAR ,935 1, , ,343 1, , ,661 1, , ,522 1, , *TOTAL , , ,821 1, , ,455 1, , ,317 1, , ,572 1, , *TOTAL , , ,962 1, , ,398 1, , *TOTAL 2010 YTD 3, , *TOTAL 58, ,468, Roomnights sold (derived from est. rate and actual room revenues) 2. Occupancy: nights sold divided by nights available for sale(x 100) 3. Average price for each roomnight sold;from Directories and surveys 4. $ Revenue per available room per day (room sales per day)

54 LODGING MARKET: I-35 CORRIDOR FROM FAR NORTH AUSTIN THROUGH GEORGETOWN Page 54 of 116 # RNIGHTS $ ROOMS Hotels # SOLD 1 REVENUES % $ $ YRQ Motels ROOMS (000S) (000 S) OCC2 Rate3 RPAR , , , , , , , , *TOTAL , , , , , , , , , *TOTAL , , , , , , , , , *TOTAL , , , , , , , , , *TOTAL , , , , , , , , , *TOTAL , , , , , , , , , *TOTAL , , , , , , , , , , *TOTAL , , , , , , , , , , *TOTAL , ,

55 Page 55 of 116 LODGING MARKET: I-35 CORRIDOR FROM FAR NORTH AUSTIN THROUGH GEORGETOWN # RNIGHTS $ ROOMS Hotels # SOLD 1 REVENUES % $ $ YRQ Motels ROOMS (000S) (000 S) OCC2 Rate3 RPAR , , , , , , , , *TOTAL , , , , , , , , , , *TOTAL , , , , , *TOTAL 2010 YTD , *TOTAL 10, , Roomnights sold (derived from est. rate and actual room revenues) 2. Occupancy: nights sold divided by nights available for sale(x 100) 3. Average price for each roomnight sold;from Directories and surveys 4. $ Revenue per available room per day (room sales per day)

56 EXHIBIT II PERIOD: TWELVE MONTHS ENDING JUNE 30, 2010 LODGING MARKET: I-35 CORRIDOR FROM FAR NORTH AUSTIN THROUGH GEORGETOWN Page 56 of 116 # * EST. $ EST. #* RMS % RNS % AMT. % EST. $ $ BRAND HTL 000S RMS 000S RNS 000S AMT %OCC RATE RPAR CHAINS MARRIOTT , TOT UPSCALE , RESIDENCE , STAYBRIDG , TOT SUITES , COURTYARD , HILT GARD , HOLID INN , TOT MID/UPS , CANDLWOOD , COMFO STE , SPRNGHILL , TOT MIN STE , BEST WEST , CNTRY INN FAIRFIELD , HAMPTON , HOLID EXP , LA QUINTA , SLEEP INN WINGATE , TOT LTD SVE , EXT AMERI , INTOWN ST VALUE PLC , TOT EXT STA , DAYS INN HO JO , MOTEL , QUALITY RAMADA , RED ROOF , SUPER , TOT BUDGET , TOT CHAINS , TOT INDEP , TOT MARKET , , * All figures annualized. Includes taxed and est non-tax room revenues.

57 Page 57 of 116 PERIOD: TWELVE MONTHS ENDING JUNE 30, 2009 LODGING MARKET: I-35 CORRIDOR FROM FAR NORTH AUSTIN THROUGH GEORGETOWN # * EST. $ EST. #* RMS % RNS % AMT. % EST. $ $ BRAND HTL 000S RMS 000S RNS 000S AMT %OCC RATE RPAR CHAINS MARRIOTT , TOT UPSCALE , RESIDENCE , STAYBRIDG , TOT SUITES , COURTYARD , HILT GARD , HOLID INN , TOT MID/UPS , CANDLWOOD , COMFO STE , SPRNGHILL , TOT MIN STE , BEST WEST , CNTRY INN FAIRFIELD HAMPTON , HOLID EXP , LA QUINTA , WINGATE , TOT LTD SVE , EXT AMERI , INTOWN ST , OTHER EXT , TOT EXT STA , DAYS INN HO JO , MOTEL , QUALITY RED ROOF , SUPER , TOT BUDGET , TOT CHAINS , TOT INDEP , TOT MARKET , , * All figures annualized. Includes taxed and est non-tax room revenues.

58 Page 58 of 116 PERIOD: TWELVE MONTHS ENDING JUNE 30, 2008 LODGING MARKET: I-35 CORRIDOR FROM FAR NORTH AUSTIN THROUGH GEORGETOWN # * EST. $ EST. #* RMS % RNS % AMT. % EST. $ $ BRAND HTL 000S RMS 000S RNS 000S AMT %OCC RATE RPAR CHAINS MARRIOTT , TOT UPSCALE , RESIDENCE , STAYBRIDG , TOT SUITES , COURTYARD , HILT GARD , HOLID INN , TOT MID/UPS , CANDLWOOD , COMFO STE , SPRNGHILL , TOT MIN STE , BEST WEST , CNTRY INN , HAMPTON , HOLID EXP , LA QUINTA , WINGATE , TOT LTD SVE , EXT AMERI , INTOWN ST , OTHER EXT , TOT EXT STA , DAYS INN , HO JO , MOTEL , QUALITY RED ROOF , SUPER , TOT BUDGET , TOT CHAINS , , TOT INDEP , TOT MARKET , , * All figures annualized. Includes taxed and est non-tax rooms revenues.

59 Page 59 of 116 PERIOD: TWELVE MONTHS ENDING JUNE 30, 2007 LODGING MARKET: I-35 CORRIDOR FROM FAR NORTH AUSTIN THROUGH GEORGETOWN # * EST. $ EST. #* RMS % RNS % AMT. % EST. $ $ BRAND HTL 000S RMS 000S RNS 000S AMT %OCC RATE RPAR CHAINS MARRIOTT , TOT UPSCALE , RESIDENCE , STAYBRIDG , TOT SUITES , COURTYARD , HILT GARD , HOLID INN , TOT MID/UPS , CANDLWOOD , COMFO STE , SPRNGHILL , TOT MIN STE , BEST WEST , CNTRY INN , HAMPTON , HOLID EXP , LA QUINTA , WINGATE , TOT LTD SVE , EXT AMERI , INTOWN ST , OTHER EXT , TOT EXT STA , DAYS INN , HO JO , MOTEL , QUALITY RAMADA , RED ROOF , SUPER , TOT BUDGET , TOT CHAINS , , TOT INDEP , TOT MARKET , , * All figures annualized. Included taxed and est non-tax rooms revenues.

60 Page 60 of 116 PERIOD: TWELVE MONTHS ENDING JUNE 30, 2006 LODGING MARKET: I-35 CORRIDOR FROM FAR NORTH AUSTIN THROUGH GEORGETOWN # * EST. $ EST. #* RMS % RNS % AMT. % EST. $ $ BRAND HTL 000S RMS 000S RNS 000S AMT %OCC RATE RPAR CHAINS MARRIOTT , TOT UPSCALE , RESIDENCE , STAYBRIDG , TOT SUITES , COURTYARD , HILT GARD , HOLID INN , TOT MID/UPS , CANDLWOOD , COMFO STE , SPRNGHILL , TOT MIN STE , BEST WEST , CNTRY INN HAMPTON , HOLID EXP , LA QUINTA , WINGATE , TOT LTD SVE , EXT AMERI , INTOWN ST , OTHER EXT , TOT EXT STA , BAYMONT , DAYS INN , MOTEL , QUALITY RAMADA , RED ROOF , SUPER , TOT BUDGET , TOT CHAINS , TOT INDEP , TOT MARKET , , * All figures annualized. Included taxed and est non-tax rooms revenues.

61 Page 61 of 116 EXHIBIT III LODGING MARKET: I-35 CORRIDOR FROM FAR NORTH AUSTIN THROUGH GEORGETOWN E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ T AVG. % # TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR AUSTIN N IH AUSTIN MOTOR INN ,684 83, , , , , ,051 88, ,610 88, , , , , , , , , , , , , , , , , , , , , , , ,801 98, , , ,673 96, , , ,981 96, ,825 96, N IH AUSTIN SUITES FMR TRAVL X.STE 172, , X.EXT 225, , X.EXT 194, , X.EXT 145, , X.EXT 142, , X.EXT 213, , X.EXT 198, , X.EXT 127, , X.EXT 142, , X.EXT 129, , X.EXT 134, , X.EXT 84, , X.EXT 103, , X.EXT 129, , X.EXT 176, , X.EXT 150, , X.EXT 37,834 67, X.EXT 44,922 68, MIDDLE LN AUSTIN VILLAGE MOTOR INN F , ,

62 Page 62 of 116 E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ T AVG. % # TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR AUSTIN 601 MIDDLE LN AUSTIN VILLAGE MOTOR INN F ,991 40, ,576 51, ,704 44, ,690 67, ,176 77, ,667 73, ,305 68, ,597 72, ,859 71, ,879 74, ,463 71, ,472 70, ,568 66, ,747 56, ,422 50, ,093 50, ,904 55, ,926 51, ,682 45, ,279 48, ,524 56, GESSNER DR BEST WESTERN ATRIUM NORTH BWEST 270, , BWEST 338, , BWEST 266, , BWEST 251, , BWEST 324, , BWEST 368, , BWEST 352, , BWEST 308, , BWEST 375, , BWEST 385, , BWEST 363, , BWEST 321, , BWEST 326, , BWEST 344, , BWEST 294, , BWEST 221, , BWEST 265, , BWEST 250, , BWEST 232, , BWEST 205, , BWEST 319, , BWEST 316, , I-35 NORTH BUDGET INN , ,

63 Page 63 of 116 E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ T AVG. % # TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR AUSTIN 9106 I-35 NORTH BUDGET INN , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , N I H BUDGET MOTEL FMR HOMESTYLE , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , N INTERST COURTYARD AUSTIN NORTH PAR COURT 238, ,

64 Page 64 of 116 E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ T AVG. % # TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR AUSTIN N INTERST COURTYARD AUSTIN NORTH PAR COURT 309, , COURT 477, , COURT 506, , MIDDLE LN ECONOMY INN ,795 40, ,945 33, ,403 38, ,481 25, ,236 27, ,398 29, ,132 24, ,051 33, ,415 28, ,567 21, ,274 24, ,479 32, ,147 47, ,055 42, ,839 53, ,270 44, ,904 40, ,015 41, ,616 32, ,327 39, ,275 41, N IH EXTENDED STAY DELUXE FMR W EXTSA 152, , EXTSA 195, , EXTSA 126, , EXTSA 84, , EXTSA 160, , EXTSA 215, , EXTSA 225, , EXTSA 192, , EXTSA 242, , EXTSA 230, , EXTSA 241, , EXTSA 157, , EXTSA 253, , EXTSA 222, , EXTSA 209, , EXTSA 137, , EXTSA 146, , EXTSA 137, , EXTSA 89, ,

65 Page 65 of 116 E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ T AVG. % # TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR AUSTIN 8221 N IH EXTENDED STAY DELUXE FMR W EXTSA 100, , EXTSA 117, , EXTSA 124, , N INTERST FAIRFIELD INN AND SUITES FAIRF 320, , FAIRF 260, , FAIRF 330, , FAIRF 465, , FAIRF 473, , N INTERST HILTON GARDEN INN-AUSTIN HILTG 601, , HILTG 469, , HILTG 528, , HILTG 625, , HILTG 440, , HILTG 463, , HILTG 681, , HILTG 683, , N I H HOLIDAY EXPRESS FMR WINGAT WINGT 149, , WINGT 119, , HIEXP 119, , HIEXP 172, , HIEXP 203, , HIEXP 357, , HIEXP 257, , HIEXP 220, , HIEXP 401, , HIEXP 503, , HIEXP 350, , HIEXP 380, , HIEXP 528, , HIEXP 623, , HIEXP 379, , HIEXP 402, , HIEXP 307, , HIEXP 376, , HIEXP 287, , HIEXP 230, , HIEXP 376, , HIEXP 429, , N INTERSTA HOW JOHNSON PLAZA FMR 4PTS PTS 479, ,

66 Page 66 of 116 E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ T AVG. % # TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR AUSTIN 7800 N INTERSTA HOW JOHNSON PLAZA FMR 4PTS PTS 485, , , , , , HO JO 290, , HO JO 417, , HO JO 289, , HO JO 288, , HO JO 413, , HO JO 441, , HO JO 353, , HO JO 264, , HO JO 345, , HO JO 345, , HO JO 243, , HO JO 111, , HO JO 125, , HO JO 200, , HO JO 200, , HO JO 73, , HO JO 85, , HO JO 97, , N LAMAR BL INTOWN SUITES INTOW 54, , INTOW 61, , INTOW 69, , INTOW 47, , INTOW 71, , INTOW 63, , INTOW 93, , INTOW 52, , INTOW 39, , INTOW 77, , INTOW 98, , INTOW 79, , INTOW 85, , INTOW 89, , INTOW 80, , INTOW 62, , INTOW 60, , INTOW 74, , INTOW 57, , INTOW 48, , INTOW 69, , INTOW 61, , N INTERSTA MOTEL 6 # MTL 6 217, ,

67 Page 67 of 116 E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ T AVG. % # TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR AUSTIN 8010 N INTERSTA MOTEL 6 # MTL 6 273, , MTL 6 273, , MTL 6 231, , MTL 6 268, , MTL 6 329, , MTL 6 341, , MTL 6 277, , MTL 6 333, , MTL 6 352, , MTL 6 346, , MTL 6 283, , MTL 6 335, , MTL 6 312, , MTL 6 337, , MTL 6 224, , MTL 6 295, , MTL 6 322, , MTL 6 286, , MTL 6 205, , MTL 6 231, , MTL 6 278, , N I H MOTEL 6 # MTL 6 303, , MTL 6 360, , MTL 6 380, , MTL 6 346, , MTL 6 401, , MTL 6 492, , MTL 6 488, , MTL 6 406, , MTL 6 452, , MTL 6 448, , MTL 6 480, , MTL 6 352, , MTL 6 420, , MTL 6 480, , MTL 6 451, , MTL 6 336, , MTL 6 320, , MTL 6 437, , MTL 6 368, , MTL 6 264, , MTL 6 282, , MTL 6 323, , NORTH DR # RAMADA LTD FMR HOJO/RALTD/ RALTD 325, ,

68 Page 68 of 116 E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ T AVG. % # TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR AUSTIN 9121 NORTH DR # RAMADA LTD FMR HOJO/RALTD/ RALTD 364, , RALTD 391, , RALTD 293, , RALTD 345, , RALTD 372, , RALTD 389, , RALTD 339, , HO JO 417, , HO JO 366, , HO JO 355, , HO JO 247, , HO JO 338, , HO JO 309, , HO JO 349, , HO JO 245, , RALTD 282, , RALTD 259, , RALTD 268, , RALTD 156, , RALTD 280, , RALTD 272, , N I H RED ROOF INN # REDRF 244, , REDRF 309, , REDRF 321, , REDRF 242, , REDRF 283, , REDRF 307, , REDRF 326, , REDRF 284, , REDRF 373, , REDRF 359, , REDRF 319, , REDRF 267, , REDRF 356, , REDRF 365, , REDRF 309, , REDRF 263, , REDRF 258, , REDRF 225, , REDRF 197, , REDRF 147, , REDRF 189, , REDRF 231, , N LAMAR B RESIDENCE INN-AUSTIN NORT RESID 615, ,

69 Page 69 of 116 E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ T AVG. % # TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR AUSTIN N LAMAR B RESIDENCE INN-AUSTIN NORT RESID 639, , RESID 563, , RESID 422, , RESID 574, , RESID 721, , RESID 694, , RESID 669, , RESID 718, , RESID 705, , RESID 737, , RESID 644, , RESID 716, , RESID 780, , RESID 690, , RESID 459, , RESID 373, , RESID 549, , RESID 508, , RESID 373, , RESID 537, , RESID 570, , N IH SPRINGHILL SUITES SPRNG 705, , SPRNG 849, , SPRNG 716, , SPRNG 706, , SPRNG 848, , SPRNG 1,033,204 1,097, SPRNG 931, , SPRNG 859, , SPRNG 1,055,694 1,096, SPRNG 1,086,711 1,139, SPRNG 950, , SPRNG 901, , SPRNG 999,419 1,046, SPRNG 1,001,973 1,060, SPRNG 826, , SPRNG 756, , SPRNG 727, , SPRNG 717, , SPRNG 578, , SPRNG 551, , SPRNG 639, , SPRNG 670, , N I H SUPER 8 FMR TRAVELERS SUPR8 221, ,

70 Page 70 of 116 E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ T AVG. % # TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR AUSTIN 8128 N I H SUPER 8 FMR TRAVELERS SUPR8 284, , SUPR8 293, , SUPR8 257, , SUPR8 309, , SUPR8 240, , SUPR8 349, , SUPR8 276, , SUPR8 362, , SUPR8 423, , SUPR8 423, , SUPR8 423, , SUPR8 434, , SUPR8 462, , SUPR8 452, , SUPR8 313, , SUPR8 347, , SUPR8 355, , SUPR8 281, , SUPR8 265, , SUPR8 281, , SUPR8 211, , N INTERST VALUE PLACE - AUSTIN BRAKE VALUP 76, , VALUP 60, , VALUP 82, , IH 35 NOR WALNUT FOREST MOTEL POOJA ,895 32, ,479 39, ,856 38, ,487 34, ,460 35, ,774 49, ,378 48, ,938 54, ,531 50, ,645 55, ,814 57, ,127 49, ,063 47, ,050 55, ,608 56, ,077 43, ,697 48, ,255 50, ,896 49,

71 Page 71 of 116 E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ T AVG. % # TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR AUSTIN IH 35 NOR WALNUT FOREST MOTEL POOJA ,377 39, ,649 43, ,135 45, GEORGETOWN 1908 S AUSTIN A BUDGET INN ,667 38, ,032 39, ,939 45, ,831 42, ,162 35, ,742 32, ,236 25, ,163 33, ,659 32, ,908 33, ,121 36, ,620 33, WATERS EDGE COMFORT SUITES COMFS 203, , COMFS 308, , COMFS 328, , COMFS 347, , COMFS 357, , COMFS 420, , COMFS 410, , COMFS 363, , COMFS 381, , COMFS 422, , COMFS 355, , COMFS 366, , COMFS 337, , COMFS 382, , COMFS 378, , COMFS 370, , COMFS 389, , COMFS 480, , N IH GEORGETOWN INN FMR DAYS DAYS 96,372 96, DAYS 145, , DAYS 145, , DAYS 103, , DAYS 140, , DAYS 158, , DAYS 168, , DAYS 153, ,

72 Page 72 of 116 E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ T AVG. % # TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR GEORGETOWN 209 N IH GEORGETOWN INN FMR DAYS DAYS 169, , DAYS 197, , DAYS 204, , DAYS 160, , DAYS 162, , DAYS 185, , DAYS 143, , DAYS 130, , DAYS 63,181 68, DAYS 104, , DAYS 89,931 94, DAYS 75,447 80, ,094 93, , , N AUSTIN AV SAN GABRIEL MOTEL ,349 32, ,876 42, ,702 39, ,562 48, ,015 39, ,186 51, ,718 47, ,841 46, ,020 46, ,138 52, ,894 43, ,390 31, ,651 33, ,976 32, ,789 28, IH COUNTRY INN & SUITES FMR H HIEXP 265, , HIEXP 350, , HIEXP 324, , HIEXP 294, , HIEXP 285, , HIEXP 336, , HIEXP 353, , HIEXP 329, , HIEXP 325, , HIEXP 356, , HIEXP 372, , HIEXP 326, , HIEXP 314, , HIEXP 395, ,

73 Page 73 of 116 E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ T AVG. % # TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR GEORGETOWN 200 IH COUNTRY INN & SUITES FMR H HIEXP 352, , HIEXP 325, , HIEXP 317, , HIEXP 355, , HIEXP 309, , HIEXP 115, , I-35 NORTH LA QUINTA INN # LAQUN 259, , LAQUN 319, , LAQUN 307, , LAQUN 259, , LAQUN 260, , LAQUN 367, , LAQUN 347, , LAQUN 334, , LAQUN 311, , LAQUN 349, , LAQUN 377, , LAQUN 364, , LAQUN 324, , LAQUN 372, , LAQUN 288, , LAQUN 280, , LAQUN 249, , LAQUN 326, , LAQUN 324, , LAQUN 344, , LAQUN 328, , LAQUN 346, , LEANDER RD QUALITY INN FMR COMFORT IN QUALY 133, , QUALY 196, , QUALY 194, , QUALY 131, , QUALY 169, , QUALY 212, , QUALY 213, , QUALY 182, , QUALY 206, , QUALY 230, , QUALY 236, , QUALY 222, , QUALY 216, , QUALY 209, , QUALY 184, ,

74 Page 74 of 116 E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ T AVG. % # TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR GEORGETOWN 1005 LEANDER RD QUALITY INN FMR COMFORT IN QUALY 143, , QUALY 145, , QUALY 176, , QUALY 159, , QUALY 130, , QUALY 154, , QUALY 200, , SUN CITY B SUN CITY GEORGETOWN ,994 58, ,257 63, ,484 65, ,603 60, ,666 83, ,532 66, ,154 56, ,169 35, ,745 21, ,190 24, ,449 18, ,936 19, ,373 22, ,485 25, PFLUGERVILLE FM COMFORT SUITES COMFS 69,262 76, COMFS 200, , COMFS 195, , COMFS 263, , COMFS 296, , ROUND ROCK 1851 N IH BEST WESTERN EXECUTIVE IN BWEST 176, , BWEST 270, , BWEST 273, , BWEST 212, , BWEST 256, , BWEST 328, , BWEST 342, , BWEST 292, , BWEST 276, , BWEST 363, , BWEST 322, , BWEST 315, , BWEST 280, , BWEST 328, , BWEST 244, ,

75 Page 75 of 116 E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ T AVG. % # TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR ROUND ROCK 1851 N IH BEST WESTERN EXECUTIVE IN BWEST 229, , BWEST 201, , BWEST 260, , BWEST 238, , BWEST 197, , BWEST 198, , BWEST 252, , S I H CANDLEWOOD SUITES CANDL 178, , CANDL 187, , CANDL 174, , CANDL 141, , CANDL 193, , CANDL 219, , CANDL 231, , CANDL 219, , CANDL 265, , CANDL 240, , CANDL 201, , CANDL 169, , CANDL 226, , CANDL 227, , CANDL 238, , CANDL 143, , CANDL 192, , CANDL 241, , CANDL 151, , CANDL 120, , CANDL 187, , CANDL 215, , S. IH EXTENDED STAY AMERICA FMR EXTSA 150, , EXTSA 153, , EXTSA 123, , EXTSA 125, , EXTSA 136, , EXTSA 238, , EXTSA 262, , EXTSA 204, , EXTSA 261, , EXTSA 276, , EXTSA 284, , EXTSA 275, , EXTSA 242, , EXTSA 304, ,

76 Page 76 of 116 E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ T AVG. % # TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR ROUND ROCK 5555 S. IH EXTENDED STAY AMERICA FMR EXTSA 189, , EXTSA 132, , EXTSA 178, , EXTSA 156, , EXTSA 127, , EXTSA 141, , EXTSA 140, , EXTSA 172, , DELL WAY HAMPTON INN ROUND ROCK HAMPT 452, , HAMPT 552, , HAMPT 491, , HAMPT 470, , HAMPT 543, , HAMPT 644, , HAMPT 648, , HAMPT 540, , HAMPT 640, , HAMPT 727, , HAMPT 686, , HAMPT 642, , HAMPT 712, , HAMPT 780, , HAMPT 685, , HAMPT 616, , HAMPT 432, , HAMPT 665, , HAMPT 563, , HAMPT 591, , HAMPT 599, , HAMPT 652, , S IH RESIDENCE INN - ROUND ROC RESID 459, , RESID 631, , RESID 558, , RESID 368, , RESID 557, , RESID 609, , RESID 776, , RESID 648, , RESID 671, , RESID 809, , RESID 728, , RESID 675, , RESID 812, ,

77 Page 77 of 116 E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ T AVG. % # TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR ROUND ROCK 2505 S IH RESIDENCE INN - ROUND ROC RESID 756, , RESID 705, , RESID 527, , RESID 559, , RESID 698, , RESID 624, , RESID 588, , RESID 613, , RESID 716, , N I H WINGATE INN WINGT 251, , WINGT 279, , WINGT 324, , WINGT 220, , WINGT 295, , WINGT 390, , WINGT 394, , WINGT 314, , WINGT 411, , WINGT 449, , WINGT 398, , WINGT 364, , WINGT 360, , WINGT 455, , WINGT 363, , WINGT 311, , WINGT 313, , WINGT 338, , WINGT 331, , WINGT 247, , WINGT 248, , WINGT 376, , INTERSTATE CLSD SUPER 8 7/05 FMR RALT SUPR8 85,000 90, SUPR8 85,000 90, CHISHOLM TR COMFORT SUITES COMFS 210, , COMFS 272, , COMFS 233, , COMFS 172, , COMFS 222, , COMFS 252, , COMFS 286, , COMFS 259, ,

78 Page 78 of 116 E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ T AVG. % # TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR ROUND ROCK 609 CHISHOLM TR COMFORT SUITES COMFS 303, , COMFS 321, , COMFS 286, , COMFS 274, , COMFS 274, , COMFS 294, , COMFS 255, , COMFS 219, , COMFS 246, , COMFS 232, , COMFS 185, , COMFS 160, , COMFS 186, , COMFS 223, , N IH COUNTRY INN & SUITES CTRYI 119, , CTRYI 175, , CTRYI 153, , CTRYI 140, , CTRYI 164, , CTRYI 270, , CTRYI 209, , CTRYI 209, , CTRYI 300, , CTRYI 311, , CTRYI 265, , CTRYI 233, , CTRYI 243, , CTRYI 254, , CTRYI 220, , CTRYI 144, , CTRYI 147, , CTRYI 167, , CTRYI 130, , CTRYI 91,190 97, CTRYI 132, , CTRYI 155, , HOPPE TRAI COURTYARD BY MARRIOTT COURT 424, , COURT 488, , COURT 446, , COURT 399, , COURT 535, , COURT 612, , COURT 571, ,

79 Page 79 of 116 E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ T AVG. % # TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR ROUND ROCK 2700 HOPPE TRAI COURTYARD BY MARRIOTT COURT 556, , COURT 659, , COURT 762, , COURT 687, , COURT 608, , COURT 706, , COURT 762, , COURT 668, , COURT 585, , COURT 525, , COURT 572, , COURT 439, , COURT 399, , COURT 478, , COURT 563, , S I H DAYS INN INN & SUITES FMR DAYS 77,870 80, DAYS 153, , DAYS 156, , DAYS 129, , DAYS 135, , DAYS 198, , DAYS 185, , DAYS 118, , DAYS 164, , DAYS 198, , DAYS 176, , DAYS 179, , DAYS 169, , DAYS 182, , DAYS 161, , DAYS 48,247 53, DAYS 74,297 74, DAYS 96, , DAYS 61,948 65, DAYS 105, , DAYS 112, , DAYS 124, , N I H HILTON GARDEN INN HILTG 446, , HILTG 601, , HILTG 550, , HILTG 469, , HILTG 594, , HILTG 762, ,

80 Page 80 of 116 E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ T AVG. % # TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR ROUND ROCK 2310 N I H HILTON GARDEN INN HILTG 721, , HILTG 651, , HILTG 793, , HILTG 885, , HILTG 778, , HILTG 674, , HILTG 833, , HILTG 909, , HILTG 808, , HILTG 642, , HILTG 633, , HILTG 712, , HILTG 575, , HILTG 536, , HILTG 638, , HILTG 775, , IH 35 N HOLIDAY I & S FMR AMERISUI HOLID 263, , HOLID 346, , HOLID 324, , HOLID 345, , HOLID 372, , HOLID 450, , HOLID 460, , HOLID 425, , HOLID 497, , HOLID 564, , HOLID 496, , HOLID 434, , HOLID 527, , HOLID 515, , HOLID 450, , HOLID 364, , HOLID 291, , HOLID 381, , HOLID 338, , HOLID 253, , HOLID 347, , HOLID 410, , I-35 NORT LA QUINTA INN # LAQUN 298, , LAQUN 397, , LAQUN 432, , LAQUN 379, , LAQUN 368, ,

81 Page 81 of 116 E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ T AVG. % # TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR ROUND ROCK 2004 I-35 NORT LA QUINTA INN # LAQUN 427, , LAQUN 469, , LAQUN 394, , LAQUN 435, , LAQUN 490, , LAQUN 476, , LAQUN 367, , LAQUN 416, , LAQUN 467, , LAQUN 444, , LAQUN 349, , LAQUN 373, , LAQUN 418, , LAQUN 357, , LAQUN 304, , LAQUN 327, , LAQUN 390, , LA FRONTER MARRIOTT LA FRONTERA MARRT 1,829,302 1,877, MARRT 1,944,172 2,049, MARRT 1,652,097 1,735, MARRT 1,622,185 1,731, MARRT 2,193,649 2,296, MARRT 2,755,505 2,887, MARRT 2,311,185 2,397, MARRT 2,086,134 2,229, MARRT 2,672,107 2,762, MARRT 2,648,856 2,771, MARRT 2,429,379 2,492, MARRT 2,231,448 2,344, MARRT 2,647,863 2,675, MARRT 2,430,846 2,566, MARRT 2,353,183 2,434, MARRT 1,942,729 2,162, MARRT 1,874,651 1,996, MARRT 1,898,253 1,982, MARRT 1,871,191 1,960, MARRT 1,801,414 1,939, MARRT 2,232,855 2,312, MARRT 2,065,633 2,242, N INTERSTA RED ROOF INN #302 FMR SLEE REDRF 224, , REDRF 297, , REDRF 321, , REDRF 293, ,

82 Page 82 of 116 E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ T AVG. % # TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR ROUND ROCK 1990 N INTERSTA RED ROOF INN #302 FMR SLEE REDRF 323, , REDRF 400, , REDRF 420, , REDRF 368, , REDRF 362, , REDRF 399, , REDRF 378, , REDRF 362, , REDRF 359, , REDRF 408, , REDRF 402, , REDRF 302, , REDRF 275, , REDRF 294, , REDRF 248, , REDRF 247, , REDRF 291, , REDRF 286, , S INTERSTA SLEEP INN & SUITES OF ROU SLEEP 177, , HOPPE TRL SPRINGHILL SUITES BY MARRI SPRNG 340, , SPRNG 427, , SPRNG 425, , SPRNG 359, , SPRNG 418, , SPRNG 580, , SPRNG 518, , SPRNG 524, , SPRNG 574, , SPRNG 623, , SPRNG 551, , SPRNG 544, , SPRNG 594, , SPRNG 669, , SPRNG 523, , SPRNG 433, , SPRNG 410, , SPRNG 446, , SPRNG 409, , SPRNG 330, , SPRNG 413, , SPRNG 526, , S INTERSTAT STAYBRIDGE SUITES STAYB 210, ,

83 Page 83 of 116 E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ T AVG. % # TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR ROUND ROCK 520 S INTERSTAT STAYBRIDGE SUITES STAYB 335, , STAYB 319, , STAYB 253, , STAYB 341, , STAYB 434, , STAYB 339, , STAYB 316, , STAYB 435, , STAYB 487, , STAYB 399, , STAYB 391, , STAYB 368, , STAYB 457, , STAYB 490, , STAYB 359, , STAYB 379, , STAYB 425, , STAYB 365, , STAYB 307, , STAYB 349, , STAYB 341, , N INTERSTA VALUE PLACE HOTEL VALUP 251, , VALUP 180, , VALUP 38, , VALUP 90, , VALUP 120, , VALUP 88, , VALUP 46, , VALUP 78, , VALUP 88, , N IH EXTENDED STAY AMERICA EXTSA 147, , EXTSA 182, , EXTSA 155, , EXTSA 135, , EXTSA 157, , EXTSA 225, , EXTSA 215, , EXTSA 169, , EXTSA 206, , EXTSA 249, , EXTSA 235, , EXTSA 214, , EXTSA 257, ,

84 Page 84 of 116 E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ T AVG. % # TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR ROUND ROCK N IH EXTENDED STAY AMERICA EXTSA 259, , EXTSA 243, , EXTSA 162, , EXTSA 171, , EXTSA 196, , EXTSA 158, , EXTSA 122, , EXTSA 124, , EXTSA 160, , N IH HOLIDAY EXPRESS FMR QUALIT HIEXP 341, , HIEXP 437, , HIEXP 422, , HIEXP 385, , HIEXP 437, , HIEXP 552, , HIEXP 509, , HIEXP 510, , HIEXP 527, , HIEXP 593, , HIEXP 564, , HIEXP 522, , HIEXP 571, , HIEXP 599, , HIEXP 552, , HIEXP 456, , HIEXP 508, , HIEXP 539, , HIEXP 417, , HIEXP 375, , HIEXP 404, , HIEXP 469, , PARKER DR LA QUINTA INN FMR BAYMT CH BAYMT 256, , BAYMT 264, , BAYMT 262, , LAQUN 206, , LAQUN 330, , LAQUN 393, , LAQUN 365, , LAQUN 346, , LAQUN 419, , LAQUN 483, , LAQUN 418, , LAQUN 376, ,

85 Page 85 of 116 E 3 YR AVG CITY ADDR ZIP S EST 4 OP ADJ T AVG. % # TAXABLE GROSS ADJ 1 DAILY OCC $ 5 YRQ RMS BRAND REVENUE REVENUE FACTOR 2 RATE EST REVPAR ROUND ROCK 150 PARKER DR LA QUINTA INN FMR BAYMT CH LAQUN 420, , LAQUN 411, , LAQUN 428, , LAQUN 404, , LAQUN 408, , LAQUN 401, , LAQUN 353, , LAQUN 280, , LAQUN 313, , LAQUN 369, , ENDNOTES: Factor used to adjust taxable to gross revenues. Area factor used if property data not available. Taxable equals 89% of gross Statewide. 2. A number or a 'Y' indicates quarter's revenues were estimated. 3. Estimated Average Daily Rate (e.g % of 'rack single'); 4. Occupancy derived from calculated roomnights sold (gross room revenues divided by Average Daily Rate), divided by roomnights available. 5. Total REVenues Per Available Room per day, or 'REVPAR'; Prepared from State Comptroller, chain directories and private records. Includes all quarterly reports exceeding $18,000 (otherwise omitted). SOURCE STRATEGIES, INC. 09/22/10 (210) PROPS.FEX

86 Page 86 of 116 EXHIBIT IV PERIOD: TWELVE MONTHS ENDING JUNE 30, 2010 LODGING MARKET: TEXAS EXCLUDING HIGHEST PRICED SEGMENTS # * EST. $ EST. #* RMS % RNS % AMT. % EST. $ $ BRAND HTL 000S RMS 000S RNS 000S AMT %OCC RATE RPAR CHAINS ELEMENT , EMBASSY , , HOMEWOOD , RESIDENCE , , STAYBRIDG , SUMMERFLD , OTH SUITE , TOT SUITES , , POINTS , ALOFT , COURTYARD , , CROWNPLZA , DOUBLTREE , HILT GARD , , HOLID INN , , HYATT PLC , INDIGO , RADIS HTL , SHERATON , , OTHER MUP , TOT MID/UPS , , CAMBRIA , CANDLWOOD , COMFO STE , , HAWTHORN , QUAL STES , SPRNGHILL , TOWNPLACE , OTHER MIN , TOT MIN STE , , BEST WEST , , CNTRY INN , COMFO INN , , DRURY INN , FAIRFIELD , HAMPTON , , HOLID EXP , , LA QUINTA , , SLEEP INN , WINGATE , TOT LTD SVE , ,288, BUDG STES , EXT AMERI , , HOMESTEAD , INTOWN ST , STUDIO ,

87 Page 87 of 116 PERIOD: TWELVE MONTHS ENDING JUNE 30, 2010 LODGING MARKET: TEXAS EXCLUDING HIGHEST PRICED SEGMENTS # * EST. $ EST. #* RMS % RNS % AMT. % EST. $ $ BRAND HTL 000S RMS 000S RNS 000S AMT %OCC RATE RPAR CHAINS STUDIO , VALUE PLC , OTHER EXT , TOT EXT STA , , BAYMONT , BST VALUE , , BUDGETEL CLARION , DAYS INN , , ECONOLODG , HO JO , MICROTEL , MOTEL , , QUALITY , RAMADA , RED ROOF , RODEWAY , SUPER , , TRAVELODG , OTHER BUD , TOT BUDGET , , TOT CHAINS 2, , ,821, TOT INDEP 1, , , TOT MARKET 3, , ,132, * All figures annualized. Includes taxed and est non-tax room revenues.

88 Page 88 of 116 EXHIBIT V A STUDY OF THE EFFECT OF HOTEL SIZE ON PERFORMANCE IN THE TEXAS HOTEL INDUSTRY THE CASE FOR DOWNSIZING NEW HOTELS 11/30/99 By Douglas W. Sutton and Bruce H. Walker Source Strategies has long contended that the number of rooms a developer offers in a new property is one of the key factors in determining a venture's relative success or failure. It is every bit as important to size a hotel project properly as it is to select the appropriate brand, and to develop in a suitable market and location. We have previously conducted extensive studies of the lodging market that support our hotel sizing contention, and we have taken this opportunity to re-examine the issue using our extensive database of hotel and motel performance for the State of Texas. Before delving into the numbers that define the role of room count in a hotel's performance, we should first highlight the basic industry theory of 'rightsizing' a property. The premise offered by many inexperienced developers is "If I can make a profit constructing a 50 room hotel in a given market, it would be twice as profitable to develop 100 rooms." In virtually all cases nothing could be farther from the truth. At some point adding rooms to a project reaches a point of diminishing returns, and the investment in the additional rooms cannot be economically justified. To illustrate this point, mentally divide our hypothetical 100 room project into two 50 room hotels. The initial 50 rooms may perform very well, with occupancies over 70% and a very strong rate structure. However, the second 50 rooms are only utilized when there is overflow from the first hotel because its rooms are 100% occupied. Effectively, the second 50 rooms may only attain an occupancy of 30% or less. This low level of occupancy may prompt the general manager to lower rates to bolster occupancy, but this is a losing battle. Ultimately, overbuilding causes REVPAR erosion in the property, and in the market as a whole. Today's developers and lenders would not seriously consider involvement in a 50 room project operating at this low level, but often times they accomplish the same end by pushing for more rooms in a project than the market can effectively support. If we now mentally put these two 50 room properties back together (one operating at 70%, the other at 30% occupancy), what we end up with is an oversized 100 room hotel that is running a mediocre 50% occupancy.

89 Page 89 of 116 Over-sizing a hotel makes it difficult, if not impossible, to be competitive in a marketplace. There are a finite number of roomnights sold to be divided among existing hotels in the market, and developing a more conservatively sized property helps insure that a profitable level of those roomnights can be captured. Building a hotel is not the 'Field of Dreams'... If you build it - they won't come... With the exception of destination resorts and some unique convention hotels, people do not go someplace because there is a hotel. Rather, they stay in a hotel because they want to be near someplace. Builders who construct too many rooms usually put themselves in unenviable financial situations. Many hotels which we see put up for sale were developed with far too many rooms. The owners, having had difficulty getting a return on their investment, are often trying to get out from under a bad investment. There are even drastic cases of properties bulldozing entire wings to provide additional parking, because those extra rooms are a financial burden, remaining unsold the vast majority of the time. Now that we've outlined the basic economic benefits of 'building small', let's look into hotel performance numbers and see if they support this development principle. We analyzed two separate hotel samplings: First we will look at Comfort Inns across Texas as a selected brand sampling. Then we will look at all branded hotels built during a given period of time for a more diverse sampling. COMFORT INN - ANALYSIS OF SIZING AND ITS IMPACT ON PERFORMANCE In our initial analysis, we selected a sampling of Texas Comfort Inn branded properties ranging in size from 36 to 75 rooms; they are all 'Limited Service' hotels. We excluded those properties located in exclusive, higher priced markets, since they would naturally support larger room counts while maintaining strong performance levels and would distort the findings. The resulting sample included 55 Comfort Inn hotels located across Texas. The following chart of performance statistics from the latest year on file (12 months ending September 30, 1999) clearly illustrates the consistent curve, showing marked declines in performance as room count increases. This decline was exhibited in all three measures shown, Occupancy, Average Daily Rate, and REVPAR:

90 Page 90 of 116 Year Ending 6/30/99 Results Average # of Daily Units Occupancy Rate REVPAR Combined: Looking only at occupancy, the following graph gives a clear depiction of the notable negative impact of larger room counts on a hotel's ability to maintain an acceptable level of roomnights sold. Properties with lower room counts were clearly able to sustain a higher level of occupancy. Average occupancy ranged from 66.9% for properties of rooms, downward to a much lower 43.8% average occupancy for properties in the room size bracket. When looking at REVPAR, the following graph follows a very similar performance curve, ranging from an average REVPAR of $36.95 for properties of units, downward to a mediocre $19.38 average REVPAR for properties in the unit size bracket. Note that the downward slide in both graphs did not begin until room counts exceeded 35 units. Prior to that, a mild upward trend is experienced. This appears to indicate that, on average, 50 rooms is the 'optimum' size for a Comfort Inn in Texas markets (excluding high priced areas). Of course, this is an average number for this type of market. Each project must be examined on an individual basis to determine the proper size to develop within its given market.

91 Page 91 of 116 The above chart and graphs clearly illustrates that Developers often missed the mark, building more rooms than 'optimum.' 'Optimum' is defined as generating the highest return on invested capital, and is closely tied to occupancy and REVPAR generation. Analyzing the above data provides a measure of the effect of over building. For the typical range of rooms for Comfort Inn projects (40-75 rooms) outside of higher priced areas, the occupancy dropped 23.1 points (a full 35%) from 66.9% to 43.8% as room counts escalated. With a 35 room increase in rooms from the room size bracket to the room size bracket, a resulting 35% drop in occupancy is experienced. The key question, is how to apply this principle to a given hotel project. Naturally, each project would have to be judged on its individual merits, but looking at an 'average' project for a single brand and product is very revealing. All are Comfort Inns. All are very similar products in similar market environments, leaving size as the major variable in performance. In our sampling, the average project is 65 rooms in size. At this size, the average occupancy is 62.8%. If we built 36% fewer rooms (42 rooms) our average occupancy would rise a moderate 6.5% to 66.9%. Conversely, if we built 36% more than average, (71 rooms) our average occupancy plummets by 42.5% to 43.8%. Clearly there are some basic economic principles at work. Comfort Inns are conservatively-sized. Building smaller than the average of 65 rooms yields slightly higher occupancies, but the ability to charge ever higher rates as size decreases is marginal. As rates rise, some consumers perceive lost value and will stay at another property. On the other side of the coin, properties built larger than the average 65 rooms suffer serious occupancy declines. At some

92 Page 92 of 116 point the need for additional rooms that was envisioned by the optimistic developer is simply not there, and the extra rooms only serve to depress the overall performance of the property. BRANDED HOTELS - ANALYSIS OF SIZING AND ITS IMPACT ON PERFORMANCE In our second analysis, we selected a sampling of all Texas branded hotels constructed from ; 91 properties across Texas, predominantly 'Full Service'. Our sampling was limited to hotels of less than 135 rooms. We once again excluded those properties located in exclusive, higher priced markets. For our analysis we examined performance results from the year 1985 when all subject hotels were 10 to 15 years old, well into their aging life cycles. The following chart of performance statistics from 1985 for branded properties throughout Texas clearly illustrates the downward curve, with definite erosion in performance measures as room count increases: 1985 Performance Results Average # of # of Daily Hotels Units Occupancy Rate REVPAR Combined: With occupancy declines being the strongest indicator of the negative impact of building too large, the following graph provides a clear picture of the descending performance slide as room counts increase. Once again, properties with lower room counts were more insulated from market competition and were therefore able to be more competitive in both favorable and depressed market environments. Average occupancy ranged from 70% for properties of 58 rooms or less, downward to a much lower 55.5% average occupancy for properties in the room size bracket, after peaking at 73.9% in the size range.

93 Page 93 of 116 As with the Comfort Inn analysis, the above data provides a measure of the effect of over building. However, since a number of varying brands are considered in this sample, the typical range in size of these projects ranges from about 40 to 135. This is a wider range than the Comfort sampling, since many of the brands in this sample typically have larger room counts than a Comfort Inn. This is partially due to some brands' ability to support higher room counts, and partially due to the tendency to overbuild in the early 1970s, when all hotels in this sample were constructed. While the 65 room average for our Comfort Inn sample is reasonably close to optimum sizing for that brand, the 98 room average for this analysis appears to be oversized. In our assessment, the optimum average number of rooms for this sampling would have been 60 to 41 rooms, depending upon brand. In 1985, this roomcount supported occupancies near 70%, with an average REVPAR of almost $27. Compare this to the average capacity of 98 rooms attaining a much lower average occupancy of 60.9% and REVPAR below $20. Clearly this lower level of performance can be attributed to over-sizing projects in the early 1970s. Looking at our average (oversized) roomcount of 98 rooms, increasing the size by 30% (135 rooms) would cause occupancy to slide 10% from 60.9% to 55.5%. On the other hand, making the average project smaller (58 rooms, or 75% smaller) would improve occupancy to 73.9%, or a healthy 21% increase. For the sake of comparison, let us assume that the average property was more appropriately sized at about 58 rooms. If the project size were increased to 135 rooms, the largest range in our sample, occupancy would suffer a significant 33% decline from optimum levels.

94 Page 94 of 116 Of course this assumes that locational differences are not significant. We believe this is true; the large sample and clear correlation between size and performance support this conclusion. SUMMARY The data is clear. In most cases, small hotels outperform large hotels, with the exception of higher-priced markets where competitive barriers to entry exist (e.g. lack of land, excessive land cost, building restrictions, etc.). Common sense explains this occurrence: a successful 100 room hotel will inevitably prompt the development of one or more new, small hotels of similar quality in the immediate area. In a competitive market environment, the smaller hotel has a distinct advantage and wins - almost every time.

95 Page 95 of 116 EXHIBIT VI START-UP PERFORMANCE OF NEW HOTELS AND MOTELS A new study by Source Strategies, Inc., utilizing all new chain hotels opened in Texas between 1990 and 1994, shows that new hotels and motels provide their peak performance in Years III through V, when they typically reach 112% of their 20- year average REVPAR performance level. In other words, the newness of a property is an advantage on the order of a 12% premium in Years III through V - versus the average REVPAR that would otherwise be expected for that property over a twenty-year period. That's because the consumer almost always picks new over old because, to them, 'new' means 'clean' and 'new' means 'value.' Perhaps this is not news to many, but it is highly important to those who forecast the performance of new properties. Here's what the graph looks like for the first twelve years for new properties opened in the moderately-good and improving markets of the 1990's. The years after peak are projected based on two major previous studies: one by Limited Service in the early 1980's and the second last year by Source Strategies, Inc. Year I at 92% of the 20 Year Average, Year II at 107%

96 Page 96 of 116 The study found that a property could expect a REVPAR at Year I of 92% of the twenty-year average for a project. In Year II, this would move to 107% and to 112% in Years' III through V. For example, if over the twenty-year span of the project, we expect a hypothetical new hotel to generate 105% of the market average REVPAR, this means that in Year I it would generate 97% of market (105% times 92%), and in Year II 112% (105% times Year II's 107%), and then peak at 118% for Years III-V. Study Method The underlying design for this study was to determine what effect a property's age had on its REVPAR during the first five years of operation. From two other studies, we know that properties will decline at 1.67% per year, versus the market average, over long periods of time. The second study sample consisted of all new Texas development in the early 1980's, a time of major under-supply. Consequently, the first few years performance of this group of hotels and motels was probably be overstated - versus the current, more-normal times. The current study confirmed that belief. The current study's design was to develop the REVPAR index for every new chain property (each new property's REVPAR, divided by the REVPAR of all nearby hotels and motels). Then all the resulting indices were averaged. This process was done for each year of development, 1990, 1991, 1992, 1993 and 1994, in order to obtain data for "Year I," "Year II" and so on. These were averaged as well to obtain an over-all, average Year I result. This process produced the graph curve shown above, and is reflective of the particular mix of chain properties, a mix which produced REVPAR slightly above the market average. To eliminate the effect of a specific mix of chains, the scale was moved down slightly, so that the application of the year-by-year REVPAR indices to any project would result in averaging 100 of the first twenty years of the project.

97 Page 97 of 116 REVPAR OF ALL NEW CHAIN HOTELS OPENED INCLUDES THEIR LOCAL MARKET AVERAGES (SAME ZIP-CODES) Opened 1990 Year I Year II Year III Year IV Year V Year VI 9 Chain hotels Local Market Average Index New Chain/Market (Peak) Opened 1991 Year I Year II Year III Year IV Year V Year VI 8 Chain hotels Local Market Average est Index New Chain/Market (Peak) Above assumes Year VI index decline of 1.67% Opened 1992 Year I Year II Year III Year IV Year V Year VI 7 Chain hotels Local Market Average est est Index New Chain/Market (Peak) Above assumes Year V is "flat" and Year VI index declines by 1.67% Opened 1993 Year I Year II Year III Year IV Year V Year VI 16 Chain hotels Local Market Average est est est Index New Chain/Market (Peak) (Peak) Above assumes Year III and IV are Peak, and Year V and Year VI index declines by 1.67% annually Opened 1994 Year I Year II Year III Year IV Year V Year VI 29 Chain hotels Local Market Average est est est est Index New Chain/Market Above assumes Year III and Year IV Peak equals Year II plus 4%, as above, and Year V and Year VI index declines by 1.67% annually Peak COMBINED INDICES Year I Year II Year III Year IV Year V Year VI Average of Raw Data Adjusted 100 over 20 years After Year V, Declines Average 1.67% Per Annum In the sixth year and thereafter, the twenty-year average REVPAR index is diminished at a rate of 1.67% per annum in order to reflect aging and the normal life-cycle of a hotel.

98 Page 98 of 116 This pattern of declining performance with property aging is based on major studies of economic life-cycle patterns, studies which were conducted on a census of all 25,000 Texas rooms built between 1980 and 1982 (study published in September 1994 issues of MarketShare and the October 1994 issue of Hotel & Motel Management). These Source Strategies studies confirm a similar, major study conducted in 1982 at the Holiday corporation on 160 company-owned and companyoperated hotels.

99 Page 99 of 116 EXHIBIT VII CapEx: A STUDY OF CAPITAL EXPENDITURES IN THE US HOTEL INDUSTRY THE FOLLOWING IS A SUMMARY OF THE INTERNATIONAL SOCIETY OF HOSPITALITY CONSULTANTS' 2000 "CAPEX STUDY, A STUDY OF CAPITAL EXPENDITURES IN THE US HOTEL INDUSTRY" AS IT APPLIES TO LIMITED SERVICE PROPERTIES: The objective of our historical analysis in CapEx 2000 was to determine what has been spent in the past to maintain a hotel in good, competitive condition. Hotel owners and management companies were contacted to provide data for the study. Definition of CapEx "Capital Expenditure" is defined as: investments of cash or the creation of liability to acquire or improve an asset, e.g., land, buildings, building additions, site improvements, machinery, equipment; Comparatively, the "reserve for replacement" for a hotel asset has been narrowly defined as the funds set aside for the periodic replacement of furniture, fixtures and equipment (FF&E). The reserve was not contemplated to fund the replacement of major building components, such as roofs, elevators, and chillers. For this study the term has been defined as: the cost of replacing worn out FF&E, as well as the cost of; - updating design and decor - curing functional and economic obsolescence... - complying with franchisors' brand requirements - technology improvements - product change to meet market demands - adhering to government regulatory requirements - replacing all short and long lived building components due to wear and tear Although many equity investors frequently argue against the necessity of a reserve, particularly if the investor does not plan to hold the property for greater than five years, the requirement for and amount of reserves are typically contractual issues between ownership, lender, manager, and/or franchisor/franchisee. Significant Findings of CapEx 2000 The average amount spent per year by limited-service hotels in the survey was determined to be 5.5% of total revenue for the time period covered by CapEx 2000 ( ). As these limited-service hotels have matured, CapEx has increased, underscoring one of our principal findings that CapEx requirements increase as a hotel ages. CapEx Spending is highly dependent upon a hotel's point in its life cycle. The following chart shows the range of CapEx spending (as a percentage of

100 total revenues) over a 25-year time period; the table following the chart Page 100 of 116 identifies the specific ranges of CapEx spending as a% of total revenues by year. Percentage Range of CapEx Spending by Year Year Range Minimum Range Maximum % 4.51% % 3.29% % 3.15% % 3.64% % 6.23% % 6.77% % 5.85% % 5.23% % 7.01% % 11.94% % 6.55% % 9.36% % 9.93% % 7.82% % 5.72% % 12.40% % 10.50% % 9.72% % 8.10% % 8.68% % 6.99% % 6.84% % 16.98% % 12.88% % 10.24% As the data indicates, CapEx spending increases over time for all (U.S.) hotels, with large differences in both the level of CapEx spending and timing across different hotels. The data illustrates that, over time, the minimum and maximum levels of CapEx spending generally widens as a hotel increases in age.

101 Page 101 of 116 For limited-service hotels, the first major increase in spending occurs in the sixth year, which likely represents the replacement of soft goods. The first major spike occurs in year 10, which is likely to be the result of a rooms and corridors renovation. Smaller spikes in CapEx spending occur in the following years, with the next major spending spike occurring in year 17, which is likely building and some mechanical renovation and replacement. The following series of tables illustrates limited-service CapEx spending levels in various demographic categories: CapEx Limited Service Hotels by Location Average Capex/Total CapEx per Location Age Revenue Room per Year All Properties 12.0 yrs 5.5% $1,111 Airport 9.8 yrs 5.4% $1,268 Urban 15.2 yrs 4.3% $ 820 Small City/Hwy 9.2 yrs 5.1% $ 773 Suburban 10.5 yrs 5.7% $1,172

102 CapEx Limited Service Hotels by Average Daily Rate Average Average Capex/Total CapEx per Daily Rate Age Revenue Room per Year All Properties 12.0 yrs 5.5% $1,111 < $ yrs 5.0% $ 687 $60-$ yrs 6.3% $1,134 > $ yrs 5.3% $1,570 Page 102 of 116 CapEx Limited Service Hotels by Property Size Average Capex/Total CapEx per Property Size Age Revenue Room per Year All Properties 12.0 yrs 5.5% $1,111 < 100 rooms 8.7 yrs 3.3% $ rooms 10.3 yrs 5.4% $1,107 > 150 rooms 20.0 yrs 6.9% $1,360 -CapEx Limited Service Hotels by Age of Property Average Capex/Total CapEx per Daily Rate Revenue Room per Year All Properties 5.5% $1,111 > 15 yrs old 6.5% $1, yrs old 4.8% $ 897 < 5 yrs old 3.0% $ 547 Overall, the study details the varying levels of capital required to keep a hotel competitive in its life cycle. Historically, many operators have held no more than 3-4% of gross revenues in reserve, a level which may be sufficient for FF&E replacement, but is woefully inadequate for other required expenditures Data compiled and organized from the CapEx report of the International Society of Hospitality Consultants, copyright 2000.

103 Page 103 of 116 August 13, 2010 EXHIBIT VIII Market Texas Tourism Office of the Governor, Economic Development & Tourism TEXAS HOTEL PERFORMANCE REPORT: SECOND QUARTER 2010 Texas lodging room revenues gained 7.2% in the Second quarter of 2010 after a 16.3% decline in the Second quarter of The market lost 2.9% in the First Quarter of 2010 and 17.6% for all of It gained 8.5% in 2008, 8.9% in 2007, 13% in 2006 and 15% in However, even with this Second quarter 2010 gain of 7.2%, revenues are still 10.3% below the Second quarter of 2008, two years ago. The Fourth quarter of 2008 marked the end of four years of revenue growth levels above 8%. Second quarter 2010 room revenues advanced to $1.726 billion versus $1.610 billion a year ago. Prices declined by 1.1%, on top of a 6.7% decline in the Second quarter of Revenue Per Available Room per day (REVPAR) gained 1.5% in the quarter, but remained a stressful 17.7% below the Second quarter of The most important industry driver, roomnights sold, increased by a modestly encouraging 8.3% over last year (although roomnights are still 2.9% lower than 2008 levels while new supply has expanded by 9.1%). Room supply in the quarter grew 5.6% after peaking at the end of Due to generally low current returns on investment, future net supply growth will be extremely limited. Second quarter occupancy improved 2.6%, from 54.8% to 56.2% (1.4 points), well below the 59% long-term industry average and below the 63.1% in the Second quarter of market results indicate a bottoming of the severe recession and a developing, slow recovery. However, the general economic outlook remains uncertain at best.