1. Marriot in Iraq: Managing a Hotel in Baghdad’s International Zone Mindy La Branche Murali Medisetti Marc Mandel Paul Obame Gabriel Ruth STRT 571, Saxa 28 April 2010

2. “Marriott is a management company... 99.9 per cent of our investments are our people, the brand, the resources and the systems. We are strictly a management company in every way.” "The [Middle East] is very critical... from a source market perspective... at the same time, the Middle East is critical for us because of the exposure we get. And guess what? We make a lot of money here too.” - Edwin D Fuller, President and Managing Director of International Lodging for Marriott International Projected Middle East & Africa Locations through 2015 Algeria Egypt Ghana Jordan Qatar Oman Saudi Arabia Morocco UAE

4. Currency Exchange rate is a crawling peg tied to the US $ 1,170 dinar to US $1 Managed appreciation of the dinar by Central Bank US $ is most widely used foreign currency Primarily cash-based transactions Politics March 7 th parliamentary election still undecided Court-ordered recount will delay formation of new gov’t Political players are jockeying for advantage Serious concerns of government instability while political process runs its course Troop reductions and policymakers’ intent to reduce the scope of U.S. involvement limit the ability to intervene

5. Market Security improvements lead to increases in tourist and business travel Iraqi government recognizes tourism as a key economic sector; Iraq is home to over 12,000 historic sites Baghdad is the national capital, largest city, and business hub Increasing flow of international business travelers heightens need for world-class hospitality facilities Investors and foreign government officials traveling to Iraq are seriously hindered by the lack of suitable accommodations Competition Shams Rotana Hotel, Opening 2012 250 rooms Less luxurious than Marriott AI Rashid Hotel Built 1982 Recently refurbished 400 rooms Rocket attack in 2003

6. Management, Operations and Infrastructure Considerations Investors would be advised to incorporate supplemental electricity and water infrastructure on site Marriott should apply the lessons learned from the Islamabad bombing to the site design of its Baghdad property Marriott should employ a local firm to help navigate the often confusing Iraqi bureaucracy Potential for violence and pervasive government security presence advocate for additional on-site storage and service capacity Many challenges can be turned into profit-making opportunities Rendering of Proposed Green Zone Village

7. Financial Considerations Capital requirement to construct hotel estimated at $100 million (Responsibility of investment group) Estimate of $5 -10 million investment for Marriott to make the hotel operational Little competition in short term = high daily rates Opportunity for additional revenue in value-added services: Food & Beverage, Conference Management, Business Services, and more Enhanced image worldwide with successful operation in Baghdad Projected Revenue Per Available Room (RevPar) 3X that realized at comparable hotels in Middle East Region Marriott Key Operating Statistics for the Middle East and Africa (2009) Number of rooms9200 Occupancy %69% Average Daily Rate$137 RevPar ($)$94 Estimated Key Operating Statistics for Marriot Baghdad Based on Average Daily Rate of $350 Number of rooms300 Average Daily Rate$350 Occupancy %60%70%80%90% RevPar ($)$210$245$280$315

8. Any questions?