Please comment on the impact of the current economic trends on 1st
quarter business 

�The Maxwell Hotel is actually ahead of last year�s first quarter. Some
properties are on par with last year, however most will fall short of our first
quarter projections, and a few will not exceed last year�s actual results.� Ingrid
Summerfield � Joie de Vivre Hospitality Management

�Transient demand is low due to the economic scene mostly from the high
tech/IT and financial houses. City-wide conventions are lower in number than
last year, so there is little compression. This impacts hotels outside the city
center as well.� Campbell Black � General Manager, Mark Hopkins
Intercontinental

�March will finish down from our forecast and below March 2000. However our average daily rate has remained stable from last year. Our branded properties have not suffered from the downturn in demand as much as our independent hotel. We have also experienced a decline in our international wholesale markets, yet there has been an increase in Internet booked wholesale rooms.
Savvy consumers are �shopping� for low rates for travel in April. � Marty Cerles
- Reneson Hotel Group

What are your projections for the 2nd Quarter and the remainder of 2001? Are you anticipating any changes in demand? 

�April�s booking pace is behind last year (2000). During the first three weeks we
have no citywide convention activity, this creates limited compression in the
Union Square area. Our pre-bookings appear strong from May onwards into the
fall. It is unknown, at this time, if the leisure market will be softer for the
remainder of 2001.� Ingrid Summerfield � Joie de Vivre Hospitality Management

�Demand will remain sluggish for the remainder of the year. The citywide conventions have not created the same demand as in the past. Business travel is being curtailed at present due to the uncertainty of the economy. The perception of the California power crisis may impact convention and meetings travel. Problems in Europe with agriculture may help the summer demand as the American vacation market may stay at home this year.� Cambpell Black �
General Manager, Mark Hopkins Intercontinental

�Our international business for April has declined and this pattern looks as
though it will continue through May. Our domestic travel business has held
steady for our flagged properties but has dropped in our independent hotel. The
branded hotels receive the bulk of the market share.� Marty Cerles - Reneson
Hotel Group

Do you feel the changes in the economy have had an impact on travel?  If so, in what way (s)? Have you seen an effect on business or leisure travel or both?

�Changes in the economy, always have an impact on travel. The hospitality
industry is usually a lead/ lag indicator. This industry feels it first, and many
times is slower to recover. Oil prices, natural gas, electricity, stock market
confidence, Airline strikes, and first term presidential years affect the economy,
travel and the hospitality industry. There has been talk of sluggish start to the
year, yet several people are saying they can still make the budgetary goals for
the year. 2001 should be compared to 1997 and 1999 to determine how 2001
might end up.� Don Timbie; Former Regional VP of Destination Hotels &
Resorts 

�The economic climate has definitely had an impact on travel. We see the biggest impact in our leisure segment. Our travelers are more value conscious, and the corporate expense accounts are on hold.� Ingrid Summerfield _Joie de Vivre Hospitality Management. 

�We are experiencing slower business and less transient demand. Rather than
two-day meetings, the meetings are scheduled as one-day events; corporate
spending is down. However, there has been little to no change in leisure
demand. However, it is possible that leisure spending may lessen as
confidence in the economy declines.� Campbell Black � General Manager,
Mark Hopkins Intercontinental 

What, if any, are the trends that you are seeing from Hotels and the travel industry in general reacting to the changes in the market? Please comment on sell strategy patterns: have you seen an effect on rates offered throughout the Bay Area? 

�We have seen competitors dropping rates more readily during certain weak
periods. This rate strategy is being implemented more frequently than last year
and at with lower rates.� Marty Cerles � Reneson Hotels

�Our properties are reasonably priced, offer great service, and are in locations
that are convenient to both the business and leisure traveler. We believe �back
to basics� is a sound strategy. During these softer periods we implement lower
rates and offer special packages. �SF on Sale� for the spring months is a joint
promotion that addresses this year�s soft period. We call this a Win- Win
promotion that has been very successful during the winter months.� Ingrid
Summerfield _Joie de Vivre Hospitality Management

�Hotels are analyzing costs. There has been such a tremendous demand for hotel rooms that is reflected in the growth of the industry over the past years.  As that demand subsides, hotels need to look at doing business differently.  Additionally, with the current lay-off�s in the dot -com sector, there may be an increase in labor supply to the service sector. This will be good as the hospitality industry has been in need of a new supply of labor. 

�From a strategy perspective, rates seem to be softening throughout the
Market. The trend now is to gain more market share from already established
business sources.� Campbell Black � General Manager, Mark Hopkins
Intercontinental

Please comment on whether on not, you think, the current energy crisis has had any effect on travel to California and the Bay Area. Are there any other current conditions that you think are creating a significant impact on travel?

�The energy crisis has probably had a very small affect on business at this
point. There will probably be a much greater impact this spring and summer if
the rolling blackouts become more regular. The energy crisis has also been
hidden somewhat by the falling stock market, where people are losing half their
investments, and real cash. The economy is still strong, but it needs consumer
confidence.� Don Timbie � Former Regional VP of Destination Hotels & Resorts

�People in other parts of the country do talk about the energy crisis. Meeting planners want to know what we would do if we lost power. A number of hotels have implemented an energy surcharge. This is a temporary measure to help offset the cost of the crisis and heighten awareness among the travelers.�
Campbell Black � General Manager, Mark Hopkins Intercontinental

�We do not believe that the energy crisis has had a significant effect on travel.
However, we are implementing conservation measures to do our share. As a
society, we have become focused on the stock market, and we use it as a
mechanism to determine consumer confidence. As we begin to see some
stability in the market, our guests will continue to visit our City (San Francisco)
in greater numbers.� Ingrid Summerfield _Joie de Vivre Hospitality Management

�The energy crisis has definitely affected our bottom line, but we have decided
not to add on an energy surcharge. The energy crisis probably will not hurt the
leisure business as much as the corporate business. Overall, the next month
will set the travel mood. If consumer confidence continues to go up, then we
should have a good Summer and Fall.� Marty Cerles � Reneson Hotels