CONFIDENTIAL 1

Fall PromotionFall Promotion

November 5, 2003

CONFIDENTIAL 2

Fall ObjectivesFall Objectives

Promotion Objectives Increase brand awareness for the Choice midscale brands Protect Choice’s market share, while giving hotels a

chance to significantly increase share Provide an incentive that attracts both leisure and

business travelers (medium and heavy users) Be a market leader by not only having a breakthrough

offer, but by offering the strongest program in the industry

Avoid the discounting trap by focusing on a value add that maintains rate integrity

CONFIDENTIAL 3

Estimated System ImpactEstimated System Impact

INCREMENTAL REVENUE - EXISTING CP MEMBERS

$18,230,784

INCREMENTAL REVENUE - NEW CP MEMBERS $13,478,400

TOTAL INCREMENTAL REVENUE $31,709,184

EST. INCREASE IN SYSTEM REVENUE 3.3%

EST. INCREASE IN OCCUPANCY 1.8

SYSTEM ROI 399%

CONFIDENTIAL 4

Hotel Performa Hotel Performa

Total - Four Months Average Month

INCREMENTAL HOTEL REVENUE

$12,196 $3,049

INCREMENTAL COST (+3.5% FROM 5% TO 8.5%)

$3,000 $750

AVERAGE INCREMENTAL ROOMNIGHTS PER HOTEL

192 48

COST PER INCREMENTAL ROOMNIGHT

$15.63 $15.63

CONFIDENTIAL 5

Next StepsNext Steps

CP subcommittee to work with Choice staff to review bi-weekly promotion performance

At 60 days, CP subcommittee will recommend whether the fee structure is appropriate

CONFIDENTIAL 6

Original Success Measures – 60 Day Review

Original Success Measures – 60 Day Review

Average Incremental Revenue Per Hotel – $2,000 Per Month

Average Incremental Hotel Sign-Ups – 20 Per Month

CONFIDENTIAL 7

Additional Success MeasuresAdditional Success Measures

Data used to illustrate gains in Promotion Months over Year-to-Date Totals

Same Store Sales Research Results Smith Travel Data Reservation Volume

CONFIDENTIAL 8

Current Fall Results(All Hotels)

Current Fall Results(All Hotels)

Average Choice Privileges Hotel Revenue September 2002- $10,213 September 2003- $13,755

October 2002- $8,425 October 2003- $15,923

$3,542 (versus Goal of $2,000)

$7,498 (versus Goal of $2,000)

CONFIDENTIAL 9

Current Fall Results(All Hotels)

Current Fall Results(All Hotels)

Average Hotel New Member Sign-ups September 2002- 8.3 September 2003- 61.5

October 2002- 16.5 October 2003- 48.1

53.2 (versus Goal of 20)

31.6 (versus Goal of 20)

CONFIDENTIAL 10

CP Applications 2002 vs. 2003CP Applications 2002 vs. 2003

0

50

100

150

200

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Month

# o

f A

pp

lica

tio

ns

2003

2002

CONFIDENTIAL 11

CP Application SourceMonthly Average

CP Application SourceMonthly Average

-

20,000

40,000

60,000

80,000

100,000

120,000

Source

# o

f A

pp

licati

on

s

Jan-Aug YTD Avg

Sep-03

Oct-03

CONFIDENTIAL 12

CP Application StatisticsCP Application Statistics

CONFIDENTIAL 13

Weekly CP RevenueWeekly CP Revenue

$4,000

$6,500

$9,000

TAI Date

Rev

enu

e ($

'000

)

2003

2002

2001

CONFIDENTIAL 14

CP Monthly Revenue 2002 vs. 2003

CP Monthly Revenue 2002 vs. 2003

$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Month

Rev

enu

e ('0

00)

2003

2002

CONFIDENTIAL 15

CP ADR 2002 vs. 2003CP ADR 2002 vs. 2003

$60.00

$62.00

$64.00

$66.00

$68.00

$70.00

jan feb mar apr may jun jul aug sep oct nov dec

Month

AD

R 2003

2002

CONFIDENTIAL 16

CP Revenue data- same store hotels*

CP Revenue data- same store hotels*

*2,017 hotels compared

CONFIDENTIAL 17

CP ADR data- same store hotels*

CP ADR data- same store hotels*

*2,017 hotels compared

CONFIDENTIAL 18

CP Room Night Data- same store hotels*

CP Room Night Data- same store hotels*

*2,017 hotels compared

CONFIDENTIAL 19

Airline Stays 2002 vs. 2003Airline Stays 2002 vs. 2003

250030003500

4000450050005500

60006500

8/29

/03

9/5/

03

9/12

/03

9/19

/03

9/26

/03

10/3/

03

10/10

/03

10/17

/03

10/24

/03

TAI Date

# o

f S

tays 2003

2002

United, Southwest, and America West excluded from this analysis

CONFIDENTIAL 20

Airline Stays 2002 vs. 2003Airline Stays 2002 vs. 2003

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2003

2002

Includes all Airlines

CONFIDENTIAL 21

Consumer Research Regarding Promotion

Consumer Research Regarding Promotion

Existing New

Members Members

Stayed due to promotion 17% 25%

Would have stayed anyway 83% 75%

Influence of Promotion

on Hotel Selection

Major Factor 34% 51%

Minor Factor 24 19

Not a Factor 42 30

Source: WRA Research

Sample contains 418 interviews

CONFIDENTIAL 22

Consumer Research Regarding Promotion

Consumer Research Regarding Promotion

Source: WRA Research

Sample contains 418 interviews

Existing New

Members Members

This Promotion Compared to Other Hotel Promotions

Much Better 47% 29%

Somewhat Better 24 25

About the Same 14 18

Worse 2 2

Not Sure 13 25

CONFIDENTIAL 23

2003 Reservation System Bookings Growth

2003 Reservation System Bookings Growth

October contains Preliminary data

-3%

11%9%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

Time Period

% c

han

ge

fro

m p

revi

ou

s ye

ar

Jan-Aug YTD

Sep

Oct

CONFIDENTIAL 24

CP Revenue vs. OSS Revenue% increase

CP Revenue vs. OSS Revenue% increase

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

Jan-May

Jun-Aug

Sept

CP % increaseOSS % increase

CONFIDENTIAL 25

Preliminary Performance Evaluation Same Store Analysis

Preliminary Performance Evaluation Same Store Analysis

Includes Best Western, Days Inn, Fairfield, Hampton, Holiday Inn, Holiday Inn Express and Ramada

Source: Smith Travel Research

Sept 2003 Change

from 9/02

Jan-Aug

2003 Difference

Choice Midscale Occupancy 57.9% +1.2% -2.3% +3.5%

Competitive Set* Occupancy 57.0 +0.5 -1.7% +2.1%

Choice Midscale ADR $64.11 -0.6% -0.1% -0.7%

Competitive Set ADR $69.82 +0.1 -0.2% +0.3%

Choice Midscale RevPar $37.12 +0.7 -2.2% +2.9%

Competitive Set RevPar $39.79 +0.6 -1.9% +2.5%

Choice midscale brands improved their occupancy performance versus competition in September 2003.

CONFIDENTIAL 26

Preliminary September 2003 PerformancePreliminary September 2003 Performance

2003 2002 changeChoice Midscale RevPar 36.59$ 36.18$ 1.1%Midscale with food 39.65$ 39.48$ 0.4%Midscale without food 42.32$ 41.19$ 2.7%

Choice Midscale Occupancy 57.2% 56.3% 1.6%Midscale with food 54.9% 54.3% 1.1%Midscale without food 61.9% 60.3% 2.7%

Source: Smith Travel Research, OSS