1. Financial Benchmarking Your Resort & U.S. Resort Industry Overview Financial Benchmarking Your Resort & U.S. Resort Industry Overview

2. Robert Mandelbaum robert.mandelbaum@pkfc.com Mark Woodworth mark.woodworth@pkfc.com Presented by v

3. Presentation Outline n Industry Overview n Benchmarking defined n When did benchmarking start? n How to benchmark! n Why use benchmark$ n Resort financial benchmarking n Uniform System of Accounts n Methods of financial comparison n Case study n HRG’s Benchmarker® v

4. U.S. Resorts Annual Change In Total Revenue Source: PKF/HRG Trends in the Hotel Industry

5. U.S. Resorts Change In Total Revenue By Region Region20012002 2003 Preliminary Northeast-5.4%-6.2%-5.8% North Central -1.7%3.6%-2.8% Southeast-7.6%-5.6%-1.3% South Central -9.2%3.4%0.3% Mountain/Pacific-9.3%-3.3%0.0% Source: PKF/HRG Trends in the Hotel Industry

6. U.S. Resorts Annual Change In Rooms RevPAR Source: PKF/HRG Trends in the Hotel Industry 8.1% 6.2% 7.7% 4.0% 2.5% 8.0% -8.0% -4.1% 2.2% 3.2%

7. U.S. Resorts Annual Change In Total Revenue And Expenses Source: PKF/HRG Trends in the Hotel Industry

8. U.S. Resorts Annual Change In Net Income* Note:* - Before capital reserve, rent, debt service, income taxes, amortization, and depreciation Source: PKF/HRG Trends in the Hotel Industry

9. Comparative Operating Performance Other Property Types Source: PKF/HRG Trends in the Hotel Industry

10. Comparative Operating Performance Comparable Full-Service Hotels Source: PKF/HRG Trends in the Hotel Industry

11. Definition “bench-mark-ing” Noun (1976): the study of a competitor’s product … in order to improve the performance of one’s own company “bench-mark-ing” Noun (1976): the study of a competitor’s product … in order to improve the performance of one’s own company n Merriam-Webster’s Collegiate Dictionary v

12. When & Who Started Hotel Benchmarking? n Harris Kerr & Foster [PKF Consulting] n Laventhol & Horwath n Smith Travel Research n The Hospitality Research Group [HRG] Benchmarker ® v

13. The COMP Set n Competitive - Sub Market Geography - Top Line - Market Share n Comparable / Criteria - Also Geography - Occ – ADR – RevPAR - Mix of Revenues - Bottom Line Comparison * Segment * Size * Location v vs.

14. How To Benchmark! v

15. Loan Application Loan Application Insurance – loss Insurance – loss Tax - reduction Tax - reduction Measure management Measure management Budgeting Budgeting Why Use Benchmarking? v

16. Applying Financial Benchmarking To The Hotel Industry

17. Uniform System of Accounts for the Lodging Industry 9 th Edition – Current 9 th Edition – Current 10 th Edition –Release in 2004 For Use in 2005 Common Language v

18. nOperating Departments –Rooms, Food, Beverage, Minor Operated, Rental and Other Income nUndistributed Departments –A&G, Marketing, P.O.M., Utilities nFixed Charges –Management Fees, Property Taxes, Insurance Uniform System of Accounts v

19. n Total Dollars n Percent of Department Revenue n Percent of Total Revenue n Dollars Per Available Room n Dollars Per Occupied Room Methods of Financial Comparison v

20. Comparable Property Selection Criteria v Subject Hotel Comparable Criteria Property Type ResortResort GeographyFloridaSoutheast Affiliation Chain Affiliated Rooms252 200 - 300 Occupancy67.6% 60% - 70% A.D.R.$294.60 $275 - $325

21. Comparable Property Selection Criteria v Subject Hotel Comparable Criteria RecreationTennis No Golf Tennis Other Operated Dept. % Of Total Revenue % Of Total Revenue6.8% 5% - 15%

30. The Hospitality Research Group of PKF Consulting Benchmarker ® …of Hotel Profits v

31. Benchmarker ® n Customer selects properties n Choice of 7 segments n All U.S. cities n 24 hour delivery n $175 on up n Excel XLS format v

34. Thank You Contact Information (404) 842-1150 mark.woodworth@pkfc.com robert.mandelbaum@pkfc.com