Key Trends in the Meetings & Conventions Sector

Key Trends in the Meetings & Conventions Sector moderated by: Esra Calvert

Where are we?

Transient Performance: Demand Still Impressive, ADR Rising 4% 3% 2% 1% Demand % Change ADR % Change 0% Jan-16 Jan-17 Jan-18 *Transient Demand and ADR % Change, Luxury and Upper Upscale Class, 12 MMA, 1/2016 05/2018 2018 STR. All Rights Reserved. 4

Group Performance: A Spike in April, Thanks to Easter Shift 4% 3% 2% Easter Shift 1% Easter Shift 0% -1% Demand % Change ADR % Change Jewish Holiday Shift -2% Jan-16 Jan-17 Jan-18 *Group Demand and ADR % Change, Luxury and Upper Upscale Class, 12 MMA, 1/2016 05/2018 2018 STR. All Rights Reserved. 5

Segmentation ADR Showing A Pulse 5.0% 4.0% Transient ADR % Change Group ADR % Change 3.0% 2.0% 1.0% 0.0% Jan-16 Jan-17 Jan-18 *ADR % Change, Luxury and Upper Upscale Class, Transient & Group, 12 MMA, 1/2016 05/2018 2018 STR. All Rights Reserved. 6

Easter: Notable Calendar Shifts Impacting Lodging Performance Data in 2018: Shift from April to March (also affects Q1/Q2) Election Day 11/6: Likely low room demand the night before Halloween: Shift from TUE to WED, likely impacting full week Notable Market Level Events / Comps: Super Bowl: From Houston To Minneapolis San Francisco: Moscone Center Reopened, easy comps Q2/Q3 Washington, D.C.: Inauguration & Women s March (January 2017) Houston: Hurricane Harvey October and all of Q4 2017 Florida: Hurricane Irma October and all of Q4 2017 California: Wildfires in Q4 2017 2018 STR. All Rights Reserved. 8

YTD Market Performance : Group Occupancy Market OCC % OCC % Change Influenced By Miami/Hialeah, FL 22.7 +18 Philadelphia, PA 25.4 +17.6 Minneapolis/St. Paul, MN-WI 23.3 +11.5 Super Bowl Norfolk/Virginia Beach, VA 21.3 +8.1 Chicago, IL 23.8 +5.6 Seattle, WA 20-5.1 Los Angeles/Long Beach, CA 17.9-5.3 Moscone Renovations Washington, DC-MD-VA 27.7-5.3 Women s March/Inauguration Houston, TX 20.8-7.8 Super Bowl St. Louis, MO-IL 23.2-11.5 OCC % Change and absolute OCC in Top 25: 5 Best / 5 Worst Performing OCC % Change, May 2018 YTD, Luxury and Upper Upscale Classes 2018 STR. All Rights Reserved. 9

Markets with highest Group Occupancy % Transie nt Grou p Orlando, FL 41.5 40.9 Nashville, TN 35.6 40.2 Phoenix, AZ 37.6 37.8 San Diego, CA 42.3 35.7 New Orleans, LA 45.6 33 Absolute OCC in Top 25: 5 Best Group OCC, May 2018 YTD, Luxury and Upper Upscale Classes 2018 STR. All Rights Reserved. 10

U.S. Meetings B2B Exhibitions ALL* $466 billion ALL 1.9 million B2B Exhibitions** $91 billion B2B exhibitions > 9,400 *Source: 2018 Event Industry Council Economic Significance Study **Sources: CEIR Index and Census Data, US GDP contribution estimates updated per the EIC Study

IT S THE ECONOMY Growth in the CEIR Index for the Overall Exhibition Industry vs. GDP Growth

SOME SECTORS FARE BETTER THAN OTHERS CEIR Index by Sector, Percent Change, 2017

B2B EXHIBITIONS IN MARKETING MIX CAPTURES 41% OF MARKETING BUDGET 68% ALLOCATE TO 1+ DIGITAL CHANNELS MEDIAN OF 6 PER YEAR MEDIAN BOOTH SIZE = 100 NSF $20,000 MEDIAN SPEND PER EXHIBITION 2015 CEIR Marketing Spend Study

Outlook

Total United States Key Performance Indicator Outlook (% Change vs. Prior Year) 2018F 2019F Outlook Metric 2018 Forecast 2019 Forecast Supply 2.0% 1.9% Demand 2.4% 2.0% Occupancy 0.4% 0.1% ADR 2.5% 2.3% RevPAR 2.9% 2.4% 2018 STR. All Rights Reserved. 17

Total United States Chain Scale Key Performance Indicator Outlook 2018F by Chain Scale 2018 Year End Outlook Chain Scale Occupancy (% chg) ADR (% chg) RevPAR (% chg) Luxury 0.9% 2.9% 3.8% Upper Upscale 0.2% 2.1% 2.3% Upscale -0.1% 2.0% 1.8% Upper Midscale 0.1% 2.0% 2.1% Midscale 0.4% 2.4% 2.9% Economy 0.5% 2.7% 3.2% Independent 0.4% 2.7% 3.1% Total United States 0.4% 2.5% 2.9% 2018 STR. All Rights Reserved. 18

Total United States Chain Scale Key Performance Indicator Outlook 2019F by Chain Scale 2019 Year End Outlook Chain Scale Occupancy (% chg) ADR (% chg) RevPAR (% chg) Luxury -0.1% 2.2% 2.1% Upper Upscale 0.0% 2.3% 2.3% Upscale -0.2% 2.1% 1.9% Upper Midscale -0.1% 2.1% 2.0% Midscale -0.1% 2.0% 1.9% Economy 0.1% 2.0% 2.0% Independent 0.1% 2.1% 2.2% Total United States 0.1% 2.3% 2.4% 2018 STR. All Rights Reserved. 19

Forecast Summary (STR as of May 2018, CBRE and PWC as of February 2018) 2018 as Supply 2.0% 2.0% 2.0% Demand 2.4% 1.8% 2.2% Occupancy 0.4% -0.1% 0.2% ADR 2.5% 2.6% 2.4% RevPAR 2.9% 2.5% 2.7% 2019 Supply 1.9% 1.9% Demand 2.0% 1.9% Occupancy 0.1% 0.0% ADR 2.3% 2.0% RevPAR 2.4% 2.0% 20

EXPANSION IS THE WORD, BARRING BLACK SWANS CEIR Index for the Overall Exhibition Industry, 2014=100 108.2 109.2 First Quarter 2018 Growth Rates YOY Are On Track Overall 1.8% Organizer revenues 2.8% # of attendees 1.8% NSF 2.0% # of exhibitors.7%

OUTLOOK FOR 2018 CEIR Index by Sector, Percent Change, 2018

130 125 120 115 110 105 100 95 90 85 Business Services (BZ), Consumer Goods & Retail (CG) and Education (ED) Have Been on a Secular Decline Since 2000 2000 2001 2002 2003 2004 2005 2006 2007 2014=100 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 130 125 120 115 110 105 100 95 90 85

Limited Service Construction Is The Name Of The Game 72% 58.6 61.8 21.7 21.5 8.7 11.9 Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Unaffiliated 1.2 *US Pipeline, Rooms In Construction, 000s Rooms, by Scale, March 2018 2018 STR. All Rights Reserved. 25

New Hotels w/50,000+ SF of Meeting Space 9 8 5 6 5 2 2 2 3 2 2 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018* 2019* Total U.S. Count of New Hotels with 50,000+ square feet of meeting space by year, 2008- April 2018 and projected for the remainder of 2018 and 2019 2018 STR. All Rights Reserved. 26

More Meeting Planners are Looking For. Destination Characteristic Percentage of Meeting Planners who find it Very Important Increase in Survey Very Important responses Safe Environment 85 + 22 Clean/Attractive Place 80 + 11 Scenic Setting/Scenery 30 + 7 Friendly Residents 27 + 10 Good Place for Attendees to Bring Families 25 + 15 Source: 2017 STR DestinationMAP Survey 2018 STR. All Rights Reserved. 28

Meeting Planners Don t Care as Much about Destination Characteristic Percentage of Meeting Planners who find it Very Important Decline in Survey Very Important responses Easy for Delegates to get to 77% -10% Convenient Airline Service 73% -10% Value for the Money 74% -9% Popular Place 30% -16% Convention Bureau/DMO Support 28% -7% Source: 2017 STR DestinationMAP Survey 2018 STR. All Rights Reserved. 29

Meeting Planners Don t Care as Much about Convention Center Characteristic Percentage of Meeting Planners who find it Very Important Decline in Survey Very Important responses Reasonable Facility Rentals 78% -7% Adequate Breakout Rooms 73% -7% Reasonable Exhibit Setup/Services Cost Attractive Conference Hotels Convention Hotel at or near Convention Center Source: 2017 STR DestinationMAP Survey 64% -10% 60% -13% 53% -15% 2018 STR. All Rights Reserved. 30

Disruptors

Online Friend or Foe? Trade Shows Temporary, Impactful Marketplaces Sales Visits Overtaken in part by Digital 33

When Integrating Digital

Enhancement of Engagement via Digital 96% of attendees use a mobile device on a show floor Source: CEIR Digital Toolkit

ABILITY TO ENGAGE WITH MOBILE DEVICES IS A BIG DISRUPTOR SoLoMo Social Local Mobile Seizing the power of proximity and relevance Moie http://dmresourcecenter.com/unit- 3/geofencing/

RETAILER EXPERIMENTATION WITH DIGITAL

Support the Power of Participant Ability to Livestream David Saef, GES

Interest in New Models in Near Term? Connecting Exhibitors and Attendees Differently, exclude pipe and drape Organizers, 24% Exhibitors, 21% Smaller, more personalized, curated Organizers, 16% Exhibitors, 20%

Human Touch & Technology

Attendees What Brings Them Back Source: CEIR 2016 Attendee Retention Insights, Part One

WHY EXHIBITORS USE THE CHANNEL Source: CEIR 2016 Attendee Show Floor Engagement Study, Preliminary Findings

Engagement is Pathway to Success Source: CEIR 2017 Attendee Show Floor Engagement Study

Where the Rubber Hits the Road Attendee Importance Ratings Align with Exhibitors Source: CEIR 2015 Exhibitor ROI and Performance Metrics Practices Study

Competitiveness

Voted Top 5 Destinations for a Business Meeting Rank Destination 1. Vancouver, Canada 70% Percentage of Meeting Planners 2. San Diego, CA 68% 3. Hawaii 64% 4. Orlando, FL 60% 5. Tampa, FL 59% Based on Top 40 destinations in US/Canada, Survey results from 2017 DestinationMAP 2018 STR. All Rights Reserved. 51

Upside and Downside Upside Comparatively safer market - security-wise Strong economy, GDP outlook attractive market, strong domestic travel Lower corporate tax rate GDPR making US more attractive as place to do business? Downside Provocations saw anecdotal decline of international participation at some internationally focused events last year Trade war threats in play with allies Strong U.S. dollar US share of international travel market declined to 11.9% in 17 vs. 13.6% Brand USA funding under threat