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TRANSCRIPT
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Life Cycle Strategy
2007 Performance
Outlook
Summary
Agenda
Value Creation Strategy
OperationsAcquisitions
Dispositions
Life Cycle
Driving Long-Term Earnings GrowthDriving Long-Term Earnings Growth
Development
Value Augmentation
20 Hotels and Resorts 9,044 Rooms
20 Hotels and Resorts 9,044 Rooms
Paris, France
Hamburg, Germany
Prague, Czech Republic
Chicago
Mexico City
Punta Mita Resort
Phoenixat Civic Plaza
Lincolnshire Resort
Miami
Half Moon Bay
Mexico City
Punta Mita Resort
Miami
Half Moon Bay
Mexico City
Punta Mita Resort
Chicago
Miami
Santa Monica Beach Hotel
Half Moon Bay
La Jolla
Washington, D.C.
St. Francis
Laguna Niguel
London, England
Scottsdale
Paris, France
Portfolio OverviewDisciplined Acquisition Process
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Fairmont Chicago
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Marriott Grosvenor Square
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Four Seasons Washington, D.C.
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Ritz-Carlton Half Moon Bay
Hotel del Coronado
Four Seasons Punta Mita
Four Seasons Punta Mita
Westin St. Francis
20 Hotels and Resorts 9,044 Rooms
20 Hotels and Resorts 9,044 Rooms
Paris, France
Hamburg, Germany
Prague, Czech Republic
Chicago
Mexico City
Punta Mita Resort
Phoenixat Civic Plaza
Lincolnshire Resort
Miami
Half Moon Bay
Mexico City
Punta Mita Resort
Miami
Half Moon Bay
Mexico City
Punta Mita Resort
Chicago
Miami
Santa Monica Beach Hotel
Half Moon Bay
La Jolla
Washington, D.C.
St. Francis
Laguna Niguel
London, England
Scottsdale
Paris, France
Portfolio OverviewDisciplined Acquisition Process
Food and beverage systems
Labor management systems
Management contract compliance
Aggressive asset management oversight
Operations
Case StudyFairmont Scottsdale Princess
($ in millions)
Food Cost Savings Program Beverage Cost Savings Program Labor Cost Savings Program
2007 Food Revenues: $23.1 2007 Beverage Revenues: $8.7 2007 Total Revenues: $94.5Implementation Date: Sept. 06 Implementation Date: Oct. 06 Implementation Date: Sept. 06
Pre-SH&R Food Cost: 25.2% Pre-SH&R Beverage Cost: 17.5% Total Hours Saved: 95Post-SH&R Food Cost: 22.4% Post-SH&R Beverage Cost: 16.2% Rate Per Saved Hour: $15.34Food Cost Savings: 2.8% Beverage Cost Savings: 1.3% Labor Cost Savings: $1.5
Food Cost Savings: $0.6 Beverage Cost Savings: $0.1 Labor Cost Savings: $1.5GOP Margin Improvement: 68 bps GOP Margin Improvement: 12 bps GOP Margin Improvement: 154 bps
Total Cost Savings: $2.2Total GOP Margin Improvement: 234 bps
Market research
Develop master plan
Identify discrete projects
Execute in context of cycles
RedevelopmentMaster Planning Drives Reinvestment Strategy
Case StudyFour Seasons Washington, D.C.
Revenue management
Expand hotel
– 11-room expansion
Reposition Clientele
– Michael Mina restaurant
– ENO wine tasting room
– Lobby renovation
– Rooms renovation
Closing Gap to NYC PricingClosing Gap to NYC Pricing
Value Augmentation
Hotel del Coronado
– Beach Club
– Condominium hotel units
– Retail
Four Seasons Punta Mita
– Expansion land (La Solana, H5)
– Fractional and whole ownership residential
– Retail, spa and food and beverage upgrades
It’s Not Just About the Rooms!It’s Not Just About the Rooms!
Life Cycle Strategy
2007 Performance
Agenda
2007 PerformanceNorth American Same Store Portfolio
2006 2007
Total RevPAR $281.90 9.9% $309.88
RevPAR $157.15 9.5% $172.05
GOP Margin 36.1% 220 bps 38.2%
FFO / Share $1.40 17.1% $1.64
Execution Capital Projects Completed in 2007
Four Seasons Punta MitaRetail
InterContinental ChicagoENO Wine Room
ProjectFour Seasons Punta Mita Fitness Center Expansion
Coral Suite - 5 Additional GuestroomsOasis Room & River Pool - 23 Additional Guestrooms
Hotel del Coronado Spa & Fitness Center / Beach ClubRestaurant RenovationGuest Room Renovation - 311 GuestroomsBeach Village - 78 Additional GuestroomsENO Wine Room
InterContinental Chicago StarbucksGuestroom Renovation
Ritz-Carlton Half Moon Bay Suite Renovation
Ritz-Carlton Laguna Niguel ENO Wine RoomSuite Conversion - 3 Additional RoomsMeeting Space Renovation
Westin St. Francis Room Renovation
Marriott Hamburg Lobby & Bar Renovation
Marriott Paris Restaurant RenovationTotal Delivery: $122 million
Execution Capital Projects Under Construction for Delivery in 2008
Fairmont ChicagoSpa & Fitness Center
Fairmont ScottsdaleBourbon Steak Restaurant
ProjectFairmont Chicago Spa & Fitness Center
ENO Wine RoomLobby RenovationGuestroom Renovation
Fairmont Scottsdale General Manager House ConversionStone Rose Bar / Pool DeckVilla RenovationBourbon Steak RestaurantGuestroom Renovation
Four Seasons D.C. Guestroom & Presidential Suite Renovation11-Room Expansion
InterContinental Miami Spa & Fitness CenterMarriott Grosvenor Square Restaurant Renovation and Private Dining Rooms
Reception / Lobby / ForecourtGuestroom Renovation & ExpansionConcierge Club AdditionHealth Club AdditionAdditional Meeting and Office Space
Rennaisance Le Parc Systems, Signage & Re-FlaggingRitz-Carlton Half Moon Bay Fire & Wine Concept
LightingWine Room ExpansionSoft Goods Renovation
Westin St. Francis Lobby Bar Total Delivery: $115 million
2007 Key Achievements
Consistent and reliable guidance
Residential sales at the Hotel del Coronado
Capital recycling
Operating initiatives
Establish platform for growth
Beach Village UnitHotel del Coronado
Hotel Le Parc
Balance Sheet Review
$500 million credit facility
Non-cross collateralized mortgages
No maturities until 2011
81% fixed rate debt
5.4% average interest rate
Life Cycle Strategy
2007 Performance
Outlook
Agenda
2008
Total RevPAR Growth 2.0% - 5.0%
Margin Expansion 0 – 50 bps
FFO / Share Growth 3.9% - 13.6%
2008 GuidanceNorth American Same Store Portfolio
Life Cycle Strategy
2007 Performance
Outlook
Summary
Agenda
Building Long-Term Earnings GrowthBuilding Long-Term Earnings Growth
Life cycle based strategy
Seasoned team and intensive asset management
Responsive, proven contingency programs
Pipeline of internal growth investments
Summary
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