PKF Study Shows Unit-Level Hotel Profits Grew 7.2 Percent in 2007

Profit Growth Expected to Slow to 2.9 Percent in 2008

ATLANTA, GA– PKF Hospitality Research (PKF-HR) announces the average hotel in its 2008 edition of Trends in the Hotel Industry survey enjoyed a 7.2 percent gain in Net Operating Income (NOI) in 2007.

While this bottom-line improvement was more than twice the pace of inflation for the year, the single-digit gain was the lowest year-over-year increase since 2004 and is further evidence of a projected slowdown in hotel income that PKF is forecasting for the near future.

“Throughout 2007, hotel owners and operators were increasingly concerned about downtrending occupancy levels compared to 2006 and a slower pace of ADR growth, and their potential impact on 2007 profitability. Despite these concerns, year-end results indicated that the typical U.S. hotel was able to achieve gains in revenue and profits above their respective long-term averages,” said Mark Woodworth, (top right photo) president of PKF Hospitality Research.

“2008 may be a different story in view of the difficult economic outlook for the remainder of this year, and the dampening effect it will have on U.S. hotel revenue growth. Managers will be hard pressed to grow profits in 2008.”

According to Smith Travel Research, RevPAR was up just 1.9 percent through the first quarter of 2008 compared to the same period in 2007.

With poor prospects for summer travel, the second quarter 2008 Hotel Horizons report of PKF Hospitality Research is forecasting an annual increase in RevPAR of just 1.5 percent. This RevPAR forecast is the result of a projected 2.5 percent decline in occupancy, combined with a 4.0 percent increase in ADR.

(The complete Trends report is available at PKF's web site, www.pkfc.com/USALIchanges. Additionally, a complete copy of the PKF news release may be obtained from the contacts below)

CONTACTS:

Julie Tullbane, Daly Gray Public Relations, T 703 435 6293, F 703 435 6297, julie@dalygray.com

Chris Daly or Jerry Daly (media), Daly Gray Public Relations, 620 Herndon Parkway, Suite 115, Herndon, VA 20170, T 703 435 6293

Mark Woodworth, President, PKF Hospitality Research, 3475 Lenox Road, Suite 720, Atlanta, GA 30326, T 404 842 1150, Ext. 222.

PKF-HR Revises 2008 Lodging Industry Outlook in New Report

Lower RevPAR Forecast Reflects Impact of Recession

ATLANTA, GA/PRNewswire/ -- PKF Hospitality Research (PKF-HR) today announced that it has lowered its 2008 forecast for a key hotel industry metric, revenue per available room or RevPAR, from up 4.5 percent to up a below-average 3.0 percent.

The new RevPAR forecast appears in the firm's recently released first quarter 2008 Hotel Horizons(SM) report. The change was based on revised projections by Moody's Economy.com, PKF-HR's primary economic forecasting agency, which now is calling for a U.S. recession this year due to deteriorating economic fundamentals.

Declining economic fundamentals, fueled by the turmoil in the capital markets and the escalating price of oil, portend a much weaker domestic economy for the months ahead, according to Economy.com.

Its 2008 estimate of Real Personal Income Growth, a key measure of lodging industry performance, now is only 1.6 percent, down from an estimate of 2.6 percent as recently as the fourth quarter of last year. While this is certainly not good news for lodging industry participants, PKF-HR still believes that the typical U.S. hotel will enjoy increases in both revenues and profits, but at a more modest pace.

"Our econometric forecasting model focuses on Real Personal Income and Total Employment as the primary indicators for lodging demand," said Mark Woodworth, (photo top right) president of PKF Hospitality Research. "These economic measures are forecast to exhibit minimal growth during the first part of 2008, but start to climb back to their equilibrium levels during the latter months of the year.

"Accordingly, we are forecasting the demand for lodging accommodations to inch up 0.9 percent in 2008. This pace of demand growth is approximately half of the long-term annual average, but still represents a net gain in accommodated room nights for the year. When looking at 2008, we believe that U.S. hotel owners and operators will struggle to grow their revenues and profits, but market conditions will not be as damaging as we saw back in 1991 or 2001."

Woodworth noted that the 2008 first quarter is expected to be moderately positive for hotels, but added that lodging performance will deteriorate as the year progresses. He suggested that the downswing should be relatively short-lived, however, with a turnaround expected in the

2009 first quarter.

Hotel Horizons reports are prepared for 50 major U.S. markets, as well as six national chain scales. Each report contains a six-year forecast of supply, demand, occupancy, ADR, and

RevPAR, as well as other valuable economic and hospitality information.

To purchase Hotel Horizon reports, visit the PKF-HR website at www.pkfc.com/store, or call (866) 842-8754. PKF Hospitality Research (PKF-HR), headquartered in Atlanta, is the research affiliate of PKF Consulting, a consulting and real estate firm specializing in the hospitality industry.

PKF Consulting has offices in Boston, New York, Philadelphia, Washington DC, Atlanta, Indianapolis, Houston, Dallas, Bozeman, Sacramento, Seattle, Los Angeles, and San Francisco.

Contacts:

Mark Woodworth

President

PKF Hospitality Research

1-404-842-1150, ext 222

Web site: http://www.pkfc.com/ /
3475 Lenox Road, Suite 720

Atlanta, GA 30326

Media:

Chris Daly
Vice President
Daly Gray Public Relations or

Jerry Daly, President
ph: 703-435-6293
chris@dalygray.com

jerry@dalygray.com

620 Herndon Parkway, Suite 115

Herndon, VA 20170