DiamondRock Hospitality Company Reports Third Quarter 2010 Result

BETHESDA, Md., Oct. 19, 2010 - DiamondRock Hospitality Company (the "Company") (NYSE: DRH) today announced results of operations for its third fiscal quarter ended September 10, 2010.  The Company is a lodging focused real estate investment trust that owns twenty-three premium hotels in North America and holds a senior loan secured by another premium hotel.

Third Quarter 2010 Highlights

• Acquisition of Hilton Garden Inn Chelsea: The Company acquired the 169-room Hilton Garden Inn Chelsea located inNew York, New York for a total investment of $69 million.
• Acquisition of Renaissance Charleston: The Company acquired the 166-room Renaissance Charleston Historic District Hotel in Charleston, South Carolina for a total investment of $40 million.  
• New Credit Facility: The Company amended and restated its $200 million senior unsecured revolving credit facility that now matures in 2014, including a one year extension option.
• Frenchman's Reef Capital Investment Program: The Company is introducing plans to undertake a comprehensive $45 million renovation and repositioning of the Frenchman's Reef & Morning Star Marriott Beach Resort.
• Pro Forma RevPAR: The Company's Pro Forma RevPAR was $113.38, an increase of 5.0 percent from the comparable period in 2009.  Pro Forma RevPAR is calculated assuming the Company owned all of its 23 hotels for the entire third quarters of 2010 and 2009.
• Pro Forma Hotel Adjusted EBITDA Margins: The Company's Pro Forma Hotel Adjusted EBITDA margin was 23.75% an increase of 33 basis points from the comparable period in 2009.  Pro Forma Hotel Adjusted EBITDA margin is calculated assuming the Company owned all of its 23 hotels for the entire third quarters of 2010 and 2009.
• Adjusted EBITDA: The Company's Adjusted EBITDA was $33.0 million.
• Adjusted FFO: The Company's Adjusted FFO was $22.4 million and Adjusted FFO per diluted share was $0.15.  

Mark W. Brugger, Chief Executive Officer of DiamondRock Hospitality Company, stated, "The positive third quarter results reaffirm our conviction that a sustainable lodging recovery continues to build momentum.  Our results would have been even stronger but for difficult comparisons at the Westin Boston, which held back our RevPAR growth by 180 basis points and profit margins by 100 basis points.  However, our 2010 acquisitions performed exceptionally well.  The Hilton Minneapolis and the Hilton Garden Inn New York City both had robust RevPAR increases of over 20%.  Our third acquisition, the Renaissance Charleston had strong RevPAR growth of 13% during the quarter.  DiamondRock is well positioned to actively pursue additional attractive acquisition opportunities as a result of our strong balance sheet, new corporate revolver, thirteen unencumbered hotels, and over $90 million of unrestricted corporate cash at year end."

Operating Results

Please see "Certain Definitions" and "Non-GAAP Financial Measures" attached to this press release for an explanation of the terms "EBITDA," "Adjusted EBITDA," "Hotel Adjusted EBITDA Margins," "FFO" and "Adjusted FFO." Moreover, the discussions of "Pro Forma RevPAR" and "Pro Forma Hotel Adjusted EBITDA Margins" assume the Company owned all of its 23 hotels sinceJanuary 1, 2009.  All other discussions of RevPAR and Hotel Adjusted EBITDA Margins assume that the three acquired hotels were owned by the Company for the period of 2009 comparable to its 2010 ownership period.

For the third quarter beginning June 19, 2010 and ended September 10, 2010, the Company reported the following:

• Pro Forma RevPAR increase of 5.0% and Pro Forma Hotel Adjusted EBITDA margins increase of 33 basis points.
• Revenues of $151.1 million compared to $137.8 million for the comparable period in 2009.
• Adjusted EBITDA of $33.0 million compared to $27.5 million for the comparable period in 2009.
• Adjusted FFO and Adjusted FFO per diluted share of $22.4 million and $0.15, respectively, compared to $21.0 million and$0.19, respectively, for the comparable period in 2009.  
• Net loss of $3.5 million (or $0.02 per diluted share) compared to net income of $0.8 million (or $0.01 per diluted share) for the comparable period in 2009.

The Boston Westin, which had a difficult prior year comparison due to gaining 15 percent market share during the 2009 third quarter, negatively impacted the Company's Pro Forma RevPAR growth by 180 basis points and the change in Pro Forma Hotel Adjusted EBITDA margins by approximately 100 basis points.

Including new acquisitions only for the Company's 2010 ownership period, third quarter RevPAR increased 4.4 percent (from$107.25 to $111.94) from the comparable period in 2009, driven by a 1.5 percentage point increase in occupancy (from 73.5 percent to 75.0 percent) and a 2.3 percent increase in the average daily rate (from $145.93 to $149.35).  Hotel Adjusted EBITDA margins increased 35 basis points (from 23.10% to 23.45%) from the comparable period in 2009.  

For the period from January 1, 2010 to September 10, 2010, the Company reported the following:

• Pro Forma RevPAR increase of 3.3% and Pro Forma Hotel Adjusted EBITDA margins increase of 42 basis points.
• Revenues of $415.1 million compared to $400.0 million for the comparable period in 2009.
• Adjusted EBITDA of $87.3 million compared to $80.5 million for the comparable period in 2009.
• Adjusted FFO and Adjusted FFO per diluted share of $56.0 million and $0.40, respectively, compared to $60.6 million and$0.60, respectively, for the comparable period in 2009.  
• Net loss of $11.0 million (or $0.08 per diluted share) compared to $2.1 million (or $0.02 per diluted share) for the comparable period in 2009.

Including new acquisitions only for the Company's 2010 ownership period, year-to-date RevPAR increased 2.7 percent (from$105.51 to $108.34) from the comparable period in 2009, driven by a 2.3 percent increase in occupancy (from 69.0 percent to 71.3 percent) partially offset by a 0.7 percent decrease in the average daily rate (from $152.98 to $151.94). Year-to-date Hotel Adjusted EBITDA margins increased 17 basis points (from 23.02% to 23.19%) from the comparable period in 2009.

2010 Acquisitions

On June 17, 2010, the Company acquired the 821-room Hilton Minneapolis in Minneapolis, Minnesota, for total consideration of approximately $157 million.  The Minneapolis hotel market continued its dynamic growth in the third quarter with Hilton Minneapolis RevPAR growth of approximately 20%.  The growth outlook for this hotel remains strong as evidenced by the 2011 booking pace up over 12% compared to the same time last year.    

On August 6, 2010, the Company acquired the 166-room Renaissance Charleston Historic District Hotel in Charleston, South Carolina for total consideration of approximately $40 million.  The "off-market" acquisition was sourced through the Company's strategic sourcing relationship with Marriott International, Inc.  The hotel is located in Charleston's historic district and is proximate to historical attractions, shopping and dining in downtown Charleston.  The hotel experienced RevPAR growth in the third quarter of approximately 13%. In addition, the demand from Boeing continued to accelerate during the third quarter as the construction on the Dreamliner production plant in Charleston progressed.

On September 8, 2010, the Company acquired the 169-room Hilton Garden Inn Chelsea located in New York City for total consideration of approximately $69 million.  The Company retained the existing manager subject to a new, short-term management agreement.  The hotel is recently constructed and opened during the fourth quarter of 2007. The hotel benefited from the continuing resurgence in the New York City hotel market, with RevPAR growth of over 20% in the third quarter.  Moreover, the hotel's outlook for the fourth quarter is very strong, as evidenced by the forecasted fourth quarter RevPAR growth of over 20%.

New Line of Credit

On August 6, 2010, the Company amended and restated its $200 million senior unsecured revolving credit facility for a new term of 36 months.  The interest rate for the credit facility ranges from 275 to 375 basis points over LIBOR, depending on the Company's leverage.  The credit facility has a LIBOR floor of 100 basis points.  The facility may be increased to $275 millionwith the lenders' consent.  The Company may extend the maturity date of the credit agreement for an additional year upon the payment of applicable fees and satisfaction of certain standard conditions.

Frenchman's Reef Capital Investment Program

The Company recently completed a comprehensive evaluation of a major capital investment program at the Frenchman's Reef & Morning Star Marriott Beach Resort.  The Company plans to undertake a $45 million renovation and repositioning program in order to enhance all aspects of the guest experience.  The Company expects the project to improve the operating performance of the hotel, which is expected to generate an internal rate of return on investment greater than 20%.  

The repositioning program is projected to include the following key elements:

• Reinvented Pool – The Company is planning a major redesign of the pool with state of the art features, including multiple pools, cascading waterfalls, bali beds, a sundeck and a new swim-up bar to provide a premium resort experience.
• Guestroom Renovation – Each of the guestrooms and bathrooms is expected to feature new modern design elements to enhance lighting, comfort and feel. The renowned interior design firm, Leo Daly, is the designer for the new guestrooms and bathrooms.
• Spa Upgrade and Expansion – The Company plans to reinvent and double the size of the existing spa. The plans incorporate the creation of a dedicated spa pool, additional treatment rooms, and visual and sensual elements appropriate for a resort spa experience.
• Infrastructure Improvements – The Company intends to invest $15 million to comprehensively redesign the mechanical plant to allow the hotel to generate its own electricity, improve air flow in common spaces and replace packaged terminal air conditioners in the guestrooms with a central system. These enhancements are expected to greatly reduce the energy consumption and cost per kilowatt hour and generate a significant return on investment while dramatically improving guest comfort.
• Other Resort Upgrades – In addition to the above, the Company intends to provide for upgrades to the food and beverage outlets, renovation of the main ballroom, balcony upgrades, renovations to the boat dock and improvements to other facilities designed to enhance the guest experience.

The Company expects the majority of the renovation and repositioning will occur during the summer of 2011 when the Company will close two of the resort's four buildings (approximately 300 guestrooms) during the seasonally slow period between May and September.  During this time, the Company expects renovation disruption to operations resulting from the partial closure, decreasing the Company's EBITDA by several million dollars compared to the comparable period in 2010.

The Company intends to fund the renovation and repositioning program from available corporate cash and borrowings under its credit facility. Marriott International has agreed pursuant to a non-binding term sheet to fund a portion of the expense, demonstrating its commitment to Frenchman's Reef.  In addition to the funding from Marriott and existing escrow reserves, the Company expects its total cash expenditure to be approximately $35 million over the next two years.

Elements of the renovation and repositioning program began during the Company's fiscal third quarter 2010. In order to take advantage of the low occupancy summer months, the Company started several projects in the Sea Cliff tower in August 2010, including installation of a new roof, tile surrounds in the guest bathrooms and balcony upgrades. The hotel was damaged by Hurricane Earl, which hit the U.S. Virgin Islands during the Sea Cliff construction.  The remediation costs related to the damage caused by Hurricane Earl were below the Company's insurance policy deductible for damages from a named windstorm event.  The Company accrued $1.4 million during the third quarter for remediation costs from Hurricane Earl damage, which is being added back to Adjusted EBITDA and Adjusted FFO due to the unusual nature of these costs.

Frenchman's Reef Tax Agreement

The Company was party to a tax agreement with the USVI that reduced the income tax rate for Frenchman's Reef to approximately 4%.  This agreement expired in February 2010, at which time the income tax rate increased to 37.4%. On October 9, 2010, the USVI Economic Development Authority recommended the approval of the extension of our tax agreement for a period of 5 years, retroactive to February 2010 and subject to another renewal in February 2015.  The extension is expected to be sent to the Governor of USVI for final approval and execution.  If the agreement is not extended, Frenchman's Reef will continue to be subject to an income tax rate of 37.4%.

Allerton Mortgage Loan

The Company continues to pursue the foreclosure proceedings initially filed in April 2010 which would result in DiamondRock owning the hotel. However, no assurance can be given that the foreclosure proceedings will be successful.  The matter may be resolved without foreclosure if the borrower repays the senior loan in full.  Recognition of interest income on the Allerton loan is dependent upon having a reasonable expectation about the timing and amount of cash payments expected to be collected from the borrower.  Due to the uncertainty of the timing and amount of cash payments expected, the Company is not accruing any interest income on the Allerton loan.  However, the Company includes all cash received from the senior loan on the Allerton in its calculations of Adjusted EBITDA and Adjusted FFO.  As of the end of the third quarter, the Company had received cash interest payments from the borrower totaling $1.3 million.  Subsequent to the end of the third quarter, the Company received an additional $0.5 million in cash interest payments. The Company's 2010 Adjusted EBITDA and Adjusted FFO guidance assumes $2.5 million of cash received as payment of interest on the Allerton loan.

Balance Sheet

As of the end of the third quarter, the Company has approximately $61.3 million of unrestricted cash on hand and $782.7 million of debt outstanding, which consists solely of fixed rate, property-specific mortgage debt with no near-term maturities.  Thirteen of the Company's 23 hotels are unencumbered by mortgage debt and the Company's $200 million senior unsecured credit facility is unused.  The Company currently forecasts to end the year with approximately $90 million of unrestricted corporate cash.

The Company continues to maintain its straightforward capital structure.  As of September 10, 2010, the Company had no preferred equity outstanding and continued to own 100% of its properties directly.

Outlook and Guidance

The Company is providing guidance, but does not undertake to update it for any developments in its business.  Achievement of the anticipated results is subject to the risks disclosed in the Company's filings with the Securities and Exchange Commission.  The RevPAR guidance assumes that the acquired hotels were owned by the Company for the prior year comparable periods.

For the fourth quarter 2010, the Company expects:

• RevPAR growth of 5.0 percent to 7.5 percent.

• Adjusted EBITDA of $47 million to $50 million.

• Adjusted FFO of $30 million to $32 million.

• Adjusted FFO per share of $0.19 to $0.21 based on 154.6 million diluted weighted average shares.

For the full year 2010, the Company increased its guidance as follows:

• RevPAR growth of 3 percent to 5 percent.

• Adjusted EBITDA of $135 million to $138 million.

• Adjusted FFO of $88 million to $90 million, which assumes income tax expense to range from $1.5 million to $2.5 million.

• Adjusted FFO per share of $0.61 to $0.62 based on 144.4 million diluted weighted average shares.

Earnings Call

The Company will host a conference call to discuss its third quarter results on Tuesday, October 19, 2010, at 10:00 a.m. Eastern Time (ET).  To participate in the live call, investors are invited to dial 888-713-4215 (for domestic callers) or 617-213-4847 (for international callers).  The participant passcode is 20971758. A live webcast of the call will be available via the investor relations section of DiamondRock Hospitality Company's website at www.drhc.com. A replay of the webcast will also be archived on the website for one year.

About the Company

DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that is an owner of premium hotel properties.  The Company owns 23 hotels with over 10,700 rooms and holds the senior loan on a 443-room hotel.  For further information, please visit DiamondRock Hospitality Company's website at www.drhc.com.

This press release contains forward-looking statements within the meaning of federal securities laws and regulations. These forward-looking statements are identified by their use of terms and phrases such as "believe," "expect," "intend," "project," "forecast," "plan" and other similar terms and phrases, including references to assumptions and forecasts of future results.  Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made.  These risks include, but are not limited to: national and local economic and business conditions, including the potential for additional terrorist attacks, that will affect occupancy rates at the Company's hotels and the demand for hotel products and services; operating risks associated with the hotel business; risks associated with the level of the Company's indebtedness; relationships with property managers; the ability to compete effectively in areas such as access, location, quality of accommodations and room rate structures; changes in travel patterns, taxes and government regulations which influence or determine wages, prices, construction procedures and costs; risks associated with the foreclosure proceedings on the Allerton Hotel; risks associated with the planned renovation and repositioning of the Frenchman's Reef & Morning Star Marriott Beach Resort and other risk factors contained in the Company's filings with the Securities and Exchange Commission. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All information in this release is as of the date of this release, and the Company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations.

Reporting Periods for Statement of Operations

The results reported in the Company's consolidated statements of operations are based on results of its hotels reported by hotel managers. The Company's hotel managers use different reporting periods. Marriott International, the manager of most of the Company's properties, uses a fiscal year ending on the Friday closest to December 31 and reports 12 weeks of operations for the first three quarters and 16 or 17 weeks for the fourth quarter of the year for its domestic managed hotels. In contrast, Marriott International for its non-domestic hotels (including Frenchman's Reef), Davidson Hotel Company, manager of the Westin Atlanta North, Vail Resorts, manager of the Vail Marriott, Hilton Hotels Corporation, manager of the Conrad Chicago and the Hilton Minneapolis, Westin Hotel Management, L.P., manager of the Westin Boston Waterfront and Alliance Hospitality Management, manager of the Hilton Garden Inn Chelsea report results on a monthly basis. Additionally, the Company, as a REIT, is required by U.S. federal tax laws to report results on a calendar year basis. As a result, the Company has adopted the reporting periods used by Marriott International for its domestic hotels, except that the fiscal year always ends on December 31to comply with REIT rules. The first three fiscal quarters end on the same day as Marriott International's fiscal quarters but the fourth quarter ends on December 31 and full year results, as reported in the statement of operations, always include the same number of days as the calendar year.

Two consequences of the reporting cycle the Company has adopted are: (1) quarterly start dates will usually differ between years, except for the first quarter which always commences on January 1, and (2) the first and fourth quarters of operations and year-to-date operations may not include the same number of days as reflected in prior years.

While the reporting calendar the Company adopted is more closely aligned with the reporting calendar used by the manager of most of its properties, one final consequence of the calendar is the Company is unable to report any results for Frenchman's Reef, Westin Atlanta North, Vail Marriott, Conrad Chicago, Westin Boston Waterfront, Hilton Minneapolis or Hilton Garden Inn Chelsea for the month of operations that ends after its fiscal quarter-end because none of Vail Resorts, Davidson Hotel Company,  Hilton Hotels Corporation, Westin Hotel Management, L.P., Alliance Hospitality Management and Marriott International make mid-month results available. As a result, the quarterly results of operations include results from Frenchman's Reef, Westin Atlanta North, Vail Marriott, Conrad Chicago, Westin Boston Waterfront, Hilton Minneapolis and Hilton Garden Inn Chelsea as follows: first quarter (January and February), second quarter (March to May), third quarter (June to August) and fourth quarter (September to December). While this does not affect full-year results, it does affect the reporting of quarterly results.

Ground Leases

Five of the Company's hotels are subject to ground leases: Bethesda Marriott Suites, Courtyard Manhattan Fifth Avenue, Salt Lake City Downtown Marriott, Westin Boston Waterfront and Hilton Minneapolis.  In addition, part of a parking structure at a sixth hotel and the golf courses at two additional hotels are also subject to ground leases.  In accordance with U.S. generally accepted accounting principles, the Company records rent expense on a straight-line basis for ground leases that provide minimal rental payments that increase in pre-established amounts over the remaining term of the ground lease.  For the third quarter 2010, contractual cash rent payable on the ground leases totaled $1.5 million and the Company recorded approximately $3.1 million in ground rent expense.  The non-cash portion of ground rent expense recorded for the third quarter 2010 was $1.5 million.

Non-GAAP Financial Measures

The Company uses the following four non-GAAP financial measures that it believes are useful to investors as key measures of its operating performance: (1) EBITDA, (2) FFO, (3) Adjusted EBITDA and (4) Adjusted FFO.

EBITDA represents net (loss) income excluding: (1) interest expense; (2) provision for income taxes, including income taxes applicable to sale of assets; and (3) depreciation and amortization. The Company believes EBITDA is useful to an investor in evaluating its operating performance because it helps investors evaluate and compare the results of its operations from period to period by removing the impact of the Company's capital structure (primarily interest expense) and its asset base (primarily depreciation and amortization) from its operating results.  The Company also uses EBITDA as one measure in determining the value of hotel acquisitions and dispositions.

The Company computes FFO in accordance with standards established by NAREIT, which defines FFO as net (loss) income determined in accordance with GAAP, excluding gains (losses) from sales of property, plus depreciation and amortization. The Company believes that the presentation of FFO provides useful information to investors regarding its operating performance because it is a measure of the Company's operations without regard to specified non-cash items, such as real estate depreciation and amortization and gain or loss on sale of assets.  The Company also uses FFO as one measure in assessing its results.

The Company also evaluates its performance by reviewing Adjusted EBITDA and Adjusted FFO because it believes that the exclusion of certain additional recurring and non-recurring items described below provides useful supplemental information regarding the Company's ongoing operating performance and that the presentation of Adjusted EBITDA and Adjusted FFO, when combined with the primary GAAP presentation of net income (loss), is beneficial to a complete understanding of the Company's operating performance. The Company adjusts EBITDA and FFO for the following items, which may occur in any period, and refers to these measures as Adjusted EBITDA and Adjusted FFO:

• Non-Cash Ground Rent: The Company excludes the non-cash expense incurred from straight lining the rent from its ground lease obligations and the non-cash amortization of its favorable lease assets.
• The impact of the non-cash amortization of the unfavorable contract liabilities recorded in conjunction with the Company's acquisitions of the Bethesda Marriott Suites and the Chicago Marriott Downtown.  The amortization of the unfavorable contract liabilities does not reflect the underlying performance of the Company.
• Cumulative effect of a change in accounting principle: Infrequently, the Financial Accounting Standards Board (FASB) promulgates new accounting standards that require the consolidated statement of operations to reflect the cumulative effect of a change in accounting principle.  The Company excludes these one-time adjustments because they do not reflect its actual performance for that period.
• Gains from Early Extinguishment of Debt: The Company excludes the effect of gains recorded on the early extinguishment of debt because it believes that including them in EBITDA and FFO is not consistent with reflecting the ongoing performance of its hotels.
• Impairment Losses: The Company excludes the effect of impairment losses recorded because it believes that including them in EBITDA and FFO is not consistent with reflecting the ongoing performance of its assets.  In addition, the Company believes that impairment charges are similar to depreciation expense, which is also excluded from EBITDA and FFO.
• Gains or Losses on Dispositions: The Company excludes the effect of gains or losses on dispositions from EBITDA because it believes that including them is not consistent with reflecting the ongoing performance of its remaining assets.  In addition, gains and losses on dispositions are excluded from the calculation of FFO in accordance with NAREIT standards.
• Acquisition Costs:  The Company excludes acquisition transaction costs expensed during the period because it believes that including these costs in EBITDA and FFO is not consistent with the underlying performance of the Company.
• Mortgage Loan Interest Payments Received:  The Company includes cash payments received on its senior loan secured by the Allerton Hotel in Adjusted EBITDA and Adjusted FFO. GAAP requires the Company to record the cash received from the borrower as a reduction of its basis in the mortgage loan due to the uncertainty over the timing and amount of cash payments on the loan.  The Company believes that these cash payments reflect its return on its investment in the mortgage loan and should be included in Adjusted EBITDA and Adjusted FFO as they relate to the operating performance of the Company.
• Other Non-Cash and / or Unusual Items:  The Company excludes the effect of certain non-cash and/or unusual items because it believes that including these costs in EBITDA and FFO is not consistent with the underlying performance of the Company.  The Company excluded the remediation costs incurred in connection with the Hurricane Earl damage to Frenchman's Reef & Morning Star Marriott Beach Resort due to the unusual nature of the hurricane damage.

Pro Forma Financial Information

The following table presents selected consolidated quarterly financial information on a pro forma basis.  The pro forma financial information below includes the operating results for all of the Company's 23 hotels as if they were owned sinceJanuary 1, 2009.

Certain Definitions

In this release, when we discuss "Hotel Adjusted EBITDA," we exclude from Hotel EBITDA the non-cash expense incurred by the hotels due to the straight lining of the rent from our ground lease obligations, the non-cash amortization of our favorable lease assets, the non-cash amortization of the unfavorable contract liabilities recorded in conjunction with the acquisitions of the Bethesda Marriott Suites, the Chicago Marriott Downtown and the Renaissance Charleston and the unusual hurricane damage at the Frenchman's Reef & Morning Star Marriott Beach Resort. Hotel EBITDA represents hotel net income excluding: (1) interest expense; (2) income taxes; and (3) depreciation and amortization. Hotel Adjusted EBITDA margins are calculated as Hotel Adjusted EBITDA divided by total hotel revenues.

Operating Statistics – Third Quarter (1)
		ADR				Occupancy				RevPAR				Hotel Adjusted EBITDA Margin
		3Q 2010	3Q 2009	B/(W)		3Q 2010	3Q 2009	B/(W)		3Q 2010	3Q 2009	B/(W)		3Q 2010	3Q 2009	B/(W)
Atlanta Alpharetta		$       117.07	$       116.95	0.1%		69.0%	62.2%	6.8%		$          80.72	$         72.70	11.0%		22.55%	24.91%	-236bps
Westin Atlanta North (2)		$       102.37	$         99.34	3.1%		72.0%	71.8%	0.2%		$          73.72	$         71.32	3.4%		13.43%	11.69%	174bps
Atlanta Waverly		$       120.96	$       124.54	(2.9%)		63.7%	66.2%	(2.5%)		$          77.04	$         82.40	(6.5%)		47.07%	23.23%	2384bps
Renaissance Austin		$       137.25	$       130.90	4.9%		57.5%	60.1%	(2.6%)		$          78.89	$         78.67	0.3%		22.79%	25.72%	-293bps
Bethesda Marriott Suites		$       152.06	$       148.26	2.6%		67.6%	64.2%	3.4%		$        102.87	$         95.22	8.0%		20.71%	14.96%	575bps
Boston Westin (2)		$       184.80	$       194.03	(4.8%)		79.9%	83.0%	(3.1%)		$        147.72	$       161.01	(8.3%)		25.37%	31.88%	-651bps
Renaissance Charleston (4)		$       148.55	$       140.39	5.8%		84.4%	82.7%	1.7%		$        125.31	$       116.12	7.9%		29.44%	24.54%	490bps
Hilton Garden Inn Chelsea (5)		-	-	-		-	-	-		-	-	-		-	-	-
Chicago Marriott		$       175.41	$       168.19	4.3%		84.7%	85.9%	(1.2%)		$        148.52	$       144.53	2.8%		23.71%	24.68%	-97bps
Chicago Conrad (2)		$       198.78	$       183.85	8.1%		89.4%	84.2%	5.2%		$        177.66	$       154.72	14.8%		31.85%	31.15%	70bps
Courtyard Fifth Avenue		$       247.56	$       209.56	18.1%		84.7%	91.5%	(6.8%)		$        209.72	$       191.84	9.3%		23.72%	21.49%	223bps
Courtyard Midtown East		$       235.92	$       197.48	19.5%		87.4%	90.4%	(3.0%)		$        206.26	$       178.47	15.6%		28.91%	24.51%	440bps
Frenchman's Reef (2)		$       175.16	$       174.86	0.2%		85.6%	90.1%	(4.5%)		$        149.90	$       157.63	(4.9%)		5.01%	16.08%	-1107bps
Griffin Gate Marriott		$       127.74	$       122.72	4.1%		71.2%	73.6%	(2.4%)		$          90.99	$         90.31	0.8%		28.90%	27.34%	156bps
Los Angeles Airport		$       100.33	$       101.34	(1.0%)		85.3%	73.1%	12.2%		$          85.59	$         74.12	15.5%		13.81%	11.35%	246bps
Hilton Minneapolis (3)		$       143.61	$       137.14	4.7%		85.9%	75.2%	10.7%		$        123.43	$       103.15	19.7%		37.89%	29.88%	801bps
Oak Brook Hills		$       109.28	$       113.70	(3.9%)		61.5%	58.4%	3.1%		$          67.25	$         66.41	1.3%		17.55%	25.17%	-762bps
Orlando Airport Marriott		$         86.92	$         92.47	(6.0%)		65.1%	68.1%	(3.0%)		$          56.60	$         63.01	(10.2%)		7.35%	15.00%	-765bps
Salt Lake City Marriott		$       133.49	$       135.67	(1.6%)		53.6%	51.9%	1.7%		$          71.58	$         70.35	1.7%		21.81%	20.73%	108bps
The Lodge at Sonoma		$       214.37	$       207.44	3.3%		86.1%	82.1%	4.0%		$        184.52	$       170.32	8.3%		27.59%	25.85%	174bps
Torrance Marriott South Bay		$       101.60	$       106.15	(4.3%)		79.0%	79.0%	0.0%		$          80.24	$         83.82	(4.3%)		19.55%	21.66%	-211bps
Vail Marriott (2)		$       183.45	$       151.36	21.2%		65.7%	57.6%	8.1%		$        120.61	$         87.15	38.4%		23.24%	12.26%	1098bps
Renaissance Worthington		$       156.29	$       150.65	3.7%		54.9%	58.3%	(3.4%)		$          85.78	$         87.78	(2.3%)		16.52%	18.24%	-172bps
Total/Weighted Average		$       149.35	$       145.93	2.3%		75.0%	73.5%	1.5%		$        111.94	$       107.25	4.4%		23.45%	23.10%	35bps
(1)     For the 2010 acquisitions, the operating statistics include the results of operations of the hotels under previous ownership for the comparable prior year period to the Company's 2010 ownership period. (2)     The hotel reports results on a monthly basis.  The data presented is based upon the Company's reporting calendar for the third quarter and includes the months of June, July and August. (3)     Hilton Minneapolis was acquired on June 16, 2010 and reports operations on a calendar month and year basis.  The fiscal quarter ended September 10, 2010 includes the operations of the hotel from June 16, 2010 to August 31, 2010. (4)     Renaissance Charleston was acquired on August 6, 2010.  The fiscal quarter ended September 10, 2010 includes the operations of the hotel from August 6, 2010 to September 10, 2010. (5)      Hilton Garden Inn Chelsea reports operations on a calendar month and year basis.  The fiscal quarter ended September 10, 2010 excludes the operations of the hotel since it was acquired on September 8, 2010.

Operating Statistics – Year to Date (1)
		ADR				Occupancy				RevPAR				Hotel Adjusted EBITDA Margin
		YTD 2010	YTD 2009	B/(W)		YTD 2010	YTD 2009	B/(W)		YTD 2010	YTD 2009	B/(W)		YTD 2010	YTD 2009	B/(W)
Atlanta Alpharetta		$       118.63	$       124.47	(4.7%)		67.5%	60.1%	7.4%		$          80.07	$         74.79	7.1%		24.55%	25.72%	-117bps
Westin Atlanta North (2)		$       102.40	$       102.07	0.3%		71.4%	68.5%	2.9%		$          73.14	$         69.93	4.6%		15.00%	12.55%	245bps
Atlanta Waverly		$       126.66	$       133.06	(4.8%)		64.7%	63.8%	0.9%		$          81.93	$         84.88	(3.5%)		29.65%	23.26%	639bps
Renaissance Austin		$       141.71	$       146.44	(3.2%)		61.7%	62.2%	(0.5%)		$          87.46	$         91.02	(3.9%)		28.68%	29.58%	-90bps
Bethesda Marriott Suites		$       162.00	$       168.94	(4.1%)		67.2%	63.2%	4.0%		$        108.83	$       106.75	1.9%		23.89%	23.83%	6bps
Boston Westin (2)		$       186.39	$       191.91	(2.9%)		69.6%	68.7%	0.9%		$        129.65	$       131.80	(1.6%)		23.54%	27.03%	-349bps
Renaissance Charleston (4)		$       148.55	$       140.39	5.8%		84.4%	82.7%	1.7%		$        125.31	$       116.12	7.9%		29.44%	24.54%	490bps
Hilton Garden Inn Chelsea (5)		-	-	-		-	-	-		-	-	-		-	-	-
Chicago Marriott		$       176.48	$       169.30	4.2%		71.7%	73.9%	(2.2%)		$        126.48	$       125.07	1.1%		18.63%	19.72%	-109bps
Chicago Conrad (2)		$       176.17	$       180.41	(2.4%)		77.7%	73.6%	4.1%		$        136.93	$       132.85	3.1%		21.88%	22.58%	-70bps
Courtyard Fifth Avenue		$       235.93	$       208.92	12.9%		86.1%	89.4%	(3.3%)		$        203.18	$       186.80	8.8%		24.29%	21.15%	314bps
Courtyard Midtown East		$       221.64	$       201.73	9.9%		85.6%	85.6%	0.0%		$        189.62	$       172.60	9.9%		28.40%	25.25%	315bps
Frenchman's Reef (2)		$       232.26	$       222.47	4.4%		84.8%	87.9%	(3.1%)		$         197.00	$       195.52	0.8%		25.80%	26.46%	-66bps
Griffin Gate Marriott		$       124.17	$       122.79	1.1%		63.7%	62.8%	0.9%		$          79.11	$         77.06	2.7%		22.62%	23.26%	-64bps
Los Angeles Airport		$       102.44	$       108.71	(5.8%)		82.4%	74.4%	8.0%		$          84.45	$         80.92	4.4%		15.65%	16.28%	-63bps
Hilton Minneapolis (3)		$       143.61	$       137.14	4.7%		85.9%	75.2%	10.7%		$        123.43	$       103.15	19.7%		37.89%	29.88%	801bps
Oak Brook Hills		$       106.83	$       117.40	(9.0%)		52.6%	42.9%	9.7%		$          56.22	$         50.42	11.5%		10.09%	14.49%	-440bps
Orlando Airport Marriott		$         97.65	$       105.46	(7.4%)		71.6%	75.0%	(3.4%)		$          69.90	$         79.12	(11.7%)		19.34%	26.94%	-760bps
Salt Lake City Marriott		$       134.00	$       134.94	(0.7%)		54.0%	53.5%	0.5%		$          72.32	$         72.22	0.1%		26.10%	22.85%	325bps
The Lodge at Sonoma		$       192.22	$       189.98	1.2%		68.1%	61.6%	6.5%		$        130.99	$       116.96	12.0%		14.36%	11.18%	318bps
Torrance Marriott South Bay		$       100.73	$       112.02	(10.1%)		81.4%	71.2%	10.2%		$          81.96	$         79.77	2.7%		19.76%	22.38%	-262bps
Vail Marriott (2)		$       232.48	$       211.05	10.2%		65.8%	64.0%	1.8%		$        152.94	$       135.05	13.2%		32.46%	24.87%	759bps
Renaissance Worthington		$       158.77	$       161.74	(1.8%)		66.2%	64.9%	1.3%		$        105.07	$       104.90	0.2%		29.87%	28.57%	130bps
Total/Weighted Average		$       151.94	$       152.98	(0.7%)		71.3%	69.0%	2.3%		$        108.34	$         105.51	2.7%		23.19%	23.02%	17bps
(1)     For the 2010 acquisitions, the operating statistics include the results of operations of the hotels under previous ownership for the comparable prior year period to the 2010 ownership period. (2)     The hotel reports results on a monthly basis.  The data presented is based upon the Company's reporting calendar and includes the months of January through August. (3)     Hilton Minneapolis was acquired on June 16, 2010 and reports operations on a calendar month and year basis.  The period from January 1, 2010 to September 10, 2010 includes the operations of the hotel from June 16, 2010 to August 31, 2010. (4)     Renaissance Charleston was acquired on August 6, 2010.  The period from January 1, 2010 to September 10, 2010 includes the operations of the hotel from August 6, 2010 to September 10, 2010. (5)     Hilton Garden Inn Chelsea reports operations on a calendar month and year basis.  The period from January 1, 2010 to September 10, 2010 excludes the operations of the hotel since it was acquired on September 8, 2010.