Deloitte Reco Hotel

Development of Growth &
Expansion Strategy for Client X.

Final Report Executive Summary
9 June 2008
Executive Summary Final Report
Dated 9 June 2008
Agenda
1. Approach
2. Industry overview
3. Sector analysis
4. Strategic options
5. Selected strategy
6. Next steps
2 2008 Deloitte & Touche LLP. Private and confidential

Dated 9 June 2008
Outline of the Project

The project consisted of four phases, culminating in final deliverables and board presentation
Phase 2 Review of Strategic Phase 3 Detailed analysis and Phase 4 Final Deliverables and
Phase 1 Strategy Validation
Options strategy formulation Board presentation
Purpose Bring Client X management up to Analysis of 3 strategic options Detailed analysis and formulation Define strategic initiatives and
same level of understanding of available to Client X of Client Xs strategy based on finalise findings
global and regional hotel industry Supporting Client X management the review of strategic options
Discussion of: in deciding on strategic option
market s and segments that
present opportunities for growth
Agree on preliminary list of
countries for further work
Growth opportunities via
M&A/JV/Alliance
Output Minutes from workshop Minutes from workshop Minutes of workshop Final Board presentation
List of markets and segments Chosen strategy and strategic Chosen strategy for Client X summarising data supporting
selected as priority growth initiatives strategic initiatives
Agreed final form of deliverable
opportunities Agreed priority for next phase for Board
List of priority targets
Agreed priorities for next phase
Actions Discussion by Client X Board to Discussion by Client X Board to Confirmation of agreed strategy [Implementation]
agree 3-5 options for further agree option for further study in
study in Phase 2 Phase 3
Agreement of options with Agreement of option with Deloitte
Deloitte

Dated 9 June 2008
Agenda
1. Approach
Market overview
Key considerations
3. Sector analysis
6. Next steps

Dated 9 June 2008
Industry Overview: The Shareholder Value Model

The five mega trends that will have the greatest impact in share holder value
Brand
Business model Emerging markets
Mega-trends
Technology Human assets

Dated 9 June 2008
Industry Overview: Operating Models

Whilst all forms of ownership model are employed at the bottom of the market segment scale, the
higher up the chain, the ownership model options narrow to owned and managed for reasons of
brand integrity. However the level of sensitivity to variations in market conditions increases with both
degree of ownership and market segment
Owned/leased
Degree of influence over asset/Ownership model
Managed
Degree of volatility1 based

Franchised
on market conditions
Rarely Rarely
used used
Mid- Upper Low High

Budget Economy Upscale Luxury
Market Upscale
Level of market segment

Note: 1. Volatility of profit to hotel branded chain, not individual hotel
Source: Deloitte Analysis

Dated 9 June 2008
Industry Overview: Organisational Structures

There are four organisational structure models. The choice of structure will depend on the stage of
development and suitability for the hotel portfolio given strategic goals
Regional Global / Functional Brand-centric Portfolio
Characteristics Organized on a region/country Organized on a functional basis- Organized by brand or grouping Businesses are self contained and
basisresources required to run most key functions reporting up of brandsmost key functional managed by holding company
business self-contained within through a centralized home office and geographic resources Portfolio companies usually have
geography structure required to run business are self substantially different propositions
Regions have profit-centre Standards tightly managed contained within brand grouping Companies often report directly to
responsibility throughout entire organization Standards within brand the holding company CEO and
Some admin/infrastructure Often have matrixed reporting organization tightly managed often separate from other holding
pushed down to local regions relationships to geographic and Brand grouping has profit-centre company properties
functional/brand leadership responsibility
Advantages Targeted focus on development Brand tightly managed and Each brand team has singular Minimal holding company attention
and execution in the local consistent throughout footprint focus and profit responsibilities required
marketplace Efficiencies drive lower costs Limits risk of any brand dilution or
through use of service centres, confusion in marketplace
common infrastructure, strategic Holding company has opportunity
sourcing, etc. to learn from portfolio company
Challenges Lack of brand standardization Dual reporting relationships can be Cross-brand sales or promotions Cross-brand sales or promotions
across geographies may dilute more difficult to manage are more difficult to coordinate or are more difficult (reservations,
brand value Central control of key functions implement (reservations, reward reward programs, etc.)
Missed opportunities to reduce may slow decision-making programs, etc.) Missed opportunities to reduce
costs through consolidation of Span of control at the executive Missed opportunities to reduce costs through consolidation of
functions and activities level is typically higher than costs through consolidation of functions and activities
regional models functions and activities
Examples

Dated 9 June 2008
Industry Overview: Demand & Supply Global

Europe continues to dominate regarding total spend by international visitors; however, forecasts for
Asia-Pacific focus countries and the Middle East and Africa show high growth by branded hotel room
supply and international visitors
International visitor demand vs. branded room supply, 2007-09
Growth in international visitors
Many deals already

completed in Middle
East, which may suggest
fewer opportunities
Asia Pacific
Middle East
and Africa
Potential in Location
A due to increase in
domestic travel
Europe
Latin America
North America
Total international visitor

spend, size = USD 60bn
Growth in branded rooms
Note: Supply data is based on all global and regionally branded hotels, international visitor spend data is based on average trip spend excluding spend on transport to destination
Source: Lodging Econometrics; World Travel and Tourism Council; Deloitte Analysis

Dated 9 June 2008
Industry Overview: Demand & Supply Intl Overnight and Dom. Trips
Location A leads Asia-Pacific with the largest number of both domestic and international trips
Domestic and International Trips by Country (2007)

Million Trips
Benchmark
Note: International demand is determined by international overnight trips for 2007. Domestic trips are for 2007 and are defined as travel of 50 miles or more, each way, which includes an
overnight stay. *Due to rounding of decimal places, totals might not always correspond exactly to the sum.
Source: Euromonitor; World Travel and Tourism Council; Deloitte Research & Analysis. Domestic International

Dated 9 June 2008
Industry Overview: Demand & Supply Domestic Trips

Leisure is the main driver for domestic travellers
Domestic Business and Leisure Trips (2007)

Million Trips
Benchmark
Data not
available
Note: International demand is determined by international overnight trips for 2007. Domestic trips are for 2007 and are defined as travel of 50 miles or more, each way, which includes an
overnight stay.
Source: Euromonitor; World Travel and Tourism Council; Deloitte Research & Analysis. Leisure Business

Dated 9 June 2008
Industry Overview: Demand & Supply Asia-Pacific

Growth in room supply and demand is expected in Asia-Pacific lead by Location A and India. These
also had the largest number of trips among the Asia-Pacific focus countries for 2007
Total Demand Growth vs. Branded Room Supply Growth (2007-09)

Percent
Growth in domestic and international trips
Growth in branded rooms
2007 Total number of

Note: Demand growth is international and domestic travellers Trips. Size = 250m
Source: Euromonitor; Mintel; Lodging Econometrics; World Travel and Tourism Council; Deloitte Research & Analysis.

Dated 9 June 2008
Industry Overview: Demand & Supply Penetration of Room Supply

Compared to the US and UK markets, there is potential within Asia-Pacific for increasing the current
penetration of branded rooms
Hotel Room Supply per Trip by Branded (2006) vs Total Rooms (2007)
Rooms per Thousand Trips
Benchmark
US Branded
UK Branded
Branded Rooms
Source: Euromonitor; Mintel; Lodging Econometrics; World Travel and Tourism Council; Deloitte Research & Analysis. Total Rooms

Dated 9 June 2008
Industry Overview: Demand & Supply UK Penetration in AP (1/2)

Location A, India and Indonesia currently need the most branded hotels to reach UK 2007 penetration
figures
Asia-Pacific Additional Hotel Rooms at UK penetration (2007) 1

Million Rooms
Branded Rooms
Note: 1. Data used: International trips and branded rooms as at 2007; domestic trips estimated for 2007; total rooms as at 2006

Dated 9 June 2008
Industry Overview: Demand & Supply UK Penetration in AP (2/2)

Looking forward to the year 2010, there is still a gap to reach UK 2010 penetration for branded rooms
among several of the Asia-Pacific countries, lead by Location A, India and Location D
Asia-Pacific Additional Hotel Rooms at UK penetration (2010) 1

Million Rooms
Branded Rooms
Note: 1. Data used as follows: International trips and domestic trips estimated for 2010; branded rooms as at 2007; total rooms as at 2006

Dated 9 June 2008
Industry Overview: Demand & Supply US Penetration in AP

There is capacity in Asia-Pacific lead by Location A for additional branded rooms in order to reach US
2007 penetration figures; and interestingly in fairly saturated markets such as Location D, there might
still be space for branded hotels
Asia-Pacific Additional Hotel Rooms at US penetration 1
Million Rooms
Branded Rooms
Note: 1. Data used: International trips and branded rooms as at 2007; domestic trips estimated for 2007; total rooms as at 2006

Dated 9 June 2008
Industry Overview: Demand & Supply Room Penetration

The majority of the Asia-Pacific focus countries have lower room supply penetration relative to
Europe and North America. Global and regional brands account for a smaller proportion of room
supply outside North America
Room Supply Penetration (2007)
Rooms per Thousand Inhabitants
Note: Supply figure for India does not include lower budget. Total Location D supply figure includes ryokans (Location Dese Inns)
Source: UN Estimates; National Statistics offices; Lodging Econometrics; Mintel; Deloitte Research & Analysis

Industry Overview: Demand & Supply Branded Rooms by Chain Dated 9 June 2008
Scale
The luxury segment accounts for c. 18% of total branded room capacity in Asia Pacific, which
compares to c. 3% and 4.5% in North America and Europe, respectively
Branded Supply by Chain Scale (2007)

Share of Branded Rooms
Regions Countries
Note: Supply data is based on all global and regionally branded hotels only
Source: Lodging Econometrics; Deloitte Research & Analysis

Dated 9 June 2008
Industry Overview: Demand & Supply Upper Upscale / Luxury Valuation

Hotel values have increased on average nearly 6% p.a. between 2002-06, with cities in Location A,
Malaysia, Indonesia and Singapore
Upper Upscale / Luxury Valuation per Key (2006)

USD Thousands 2006 vs CAGR 2002-06
$292k
5.6%
Source: 2007 Asia Hotel Valuation Index; Deloitte Research & Analysis

Dated 9 June 2008
Industry Overview: Global Hotel Operators Overview

Global hotel operators have achieved success by offering a portfolio of brands tailored to specific
customer segments, and creating operational efficiency by leveraging the size and scale of their
distribution.
Global Hotel Operators
Indicative
Competitor A Competitor B Competitor C Competitor D Competitor E
Number of brands 7 10 15 12 10
Dominant current
Franchise Franchise Managed Owned/Leased Managed
operating model
Dominant geographic
Americas Americas Americas EMEA Americas
position
Dominant market
Mid-market Budget Upscale Budget Upscale
segment
Dominant historical Initial growth through Initial growth through Initial organic growth and Several brands through Brand growth through
growth strategy acquisitions acquisitions acquisition of new segments acquisitions acquisition
Current growth strategy Managed and franchised Franchise Managed Owned/Managed Managed
System-wide number of
3,949 6,544 2,999 3,871 925
hotels
Pipeline as share of
40% 19% 24% 41% 44%
current supply
Dominant organisational
Regional Global/Functional Global/Functional Brand-centric Global/Functional
model
Source: Deloitte Research and Analysis

Dated 9 June 2008
Industry Overview: Global Hotel Operators Financial Summary

Global hotel operators have achieved high return on capital invested by focussing on management
contracts and real-estate transformation.
Financial Results and Key Performance Indicators (2007)

Indicative
Competitor A Competitor B Competitor C Competitor E Competitor D
Financial Results
Total Revenue, $m 1,768 4,360 4,415 6,153 11,132
Market Cap, $m 4,470 3,864 12,777 10,469 15,837
EV / EBITDA 10.5x 5.7x 12.0x 11.4x 9.2x
P/E 12.0x 10.3x 18.8x 19.8x 11.9x
Return on capital invested1, % 17 9 25 13 13.6
Key Performance Indicators2
RevPAR, $ 72 871 121 110 77
Occupancy, % 69.6 73.31 73.2 70.1 67.6
ADR, $ 103 1181 165 157 114
EBITDA, $m 437 892 1,385 1,164 1,905
EBITDA Margin, % 27.0 20.5 31.4 18.9 17.0
Note: 1 Due to information availability the figure is based upon the financial statements as at 2004 year end.
Source: Deloitte Research & Analysis

Dated 9 June 2008
Industry Overview: Regional Hotel Operators Overview (1/2)

APAC brands have traditionally grown from an iconic flagship properties, and were first required to
own a critical mass of their own hotels before expanding beyond APAC or into management
contracts.
Regional Hotel Operators
Indicative
AAAA BBBB CCCC DDDDD EEEE
Number of brands 2 1 2 2 2
Dominant operating
Owned Owned Owned Owned Owned
model
Dominant geographic
Location A Location A Hong Kong Thailand India
position
Dominant market
Upper upscale Luxury Luxury Luxury Upper Upscale/Luxury
segment
Grown from iconic

flagship property?
Dominant historical
Owned Owned Owned Owned Owned
growth strategy
Dominant current growth

Owned/Managed Managed Owned Owned/Managed Owned/Managed
strategy
Number of existing
52 21 9 22 102
hotels
Pipeline as a share of
100% 86% 9% 209% 88%
current supply

Dated 9 June 2008
Industry Overview: Regional Hotel Operators Overview (2/2)

APAC brands have traditionally grown from an iconic flagship properties, and were first required to
own a critical mass of their own hotels before expanding beyond APAC or into management
contracts.
Regional Hotel Operators (contd)
Indicative
AAA DDD BBB CCC EEE FFF
Number of brands 8 2 1 2 1 1
Dominant operating
Managed Owned Managed Owned Managed n/a1
model
Dominant geographic
Spain Location D APAC Location A Americas Indonesia
position
Dominant market
Mid-market/Upscale Upscale Luxury Budget Luxury Luxury
segment
Grown from iconic

flagship property?
Dominant historical
Acquisitions Owned Owned Owned n/a1 Owned
growth strategy
Dominant current
Owned/Managed Managed Managed Owned/Managed Managed Owned
growth strategy
Number of existing
328 63 8 232 80 18
hotels
Pipeline as a share of
10% n/a1 160% 15% 152% n/a1
current supply
Note: 1. No data/information could be obtained.


Dated 9 June 2008
Industry Overview: Regional Hotel Operators Financial Summary

Asia Pacific chains have relatively high EV/EBITDA multiples and relatively low return on capital
invested as a result of their asset heavy strategies.
Financial Results and Key Performance Indicators (2007 unless otherwise stated)
Indicative
Financial Results
Total Revenue, $m 1,002* 558 582 211* 430* 1,583 607 253*
Market Cap, $m 8,341 1,635 2,095 696 1,873 3,700 1,946 3,800*
EV / EBITDA 23.6x 12.8x 19.3x 17.9x 14.7x 7.8x 14.1 No data available
P/E 22.4x 15.2x 5.1x 12.1x 38.7x 10.0x 20.4 58.2x
Return on capital invested1, % 7* 8 4 8* 10.1* 11 16 11.6
RevPAR, $ 102* 215 316 178* 34** 65 No data available No data available
Occupancy, % 70 74 68 65* 71** 69.5 No data available No data available
ADR, $ 146* 291 465 274* 48** 94 No data available No data available
EBITDA, $m 350* 190 194 70* 111 410 173 80*
EBITDA Margin, % 34.9* 34.1 33 33* 26 25.9 28 32*
Note: 1 Based on continuing operations, excluding special items; 2 Company operated; 3 Relevant data is not available for JAL, Raffles, and Four Seasons. * Figure is based on 2006
figures due to information availability. ** Jin Jiang figures are based upon their 3-Star brand. This provides a best estimate given the width of their offerings
Source: Company Data; Deloitte Research & Analysis

Dated 9 June 2008
Agenda
1. Approach
Market overview
Key considerations
3. Sector analysis
6. Next steps

Dated 9 June 2008
Key Considerations: Strategic Framework Initial Thoughts

We have identified a range of key considerations for Client X, which fall broadly into six categories
Operational
Operational Portfolio
Portfolio Play
Play to your
Location
Location Growth
Growth Patterns Talent
Talent
Excellence
Excellence Approaches
Approaches Strengths
Strengths
Most significant driver of A critical driver in delivering Single segment approach Home comfort Many hospitality Global and regional
guest hotel choice financial return With the exception of Four With the exception of Four organisations have natural hospitality organisations
Very few people choose a hotel No value in delivering low Seasons, all luxury single Seasons, all the major global strengths invest significantly in their
brand and then choose a profitability on high occupancy segment operators have built and regional players have Iconic properties talent
location and ADR growth on the foundation of one expanded close to home before
Strong brand names One of most significant assets
Poor performance can destroy or two iconic properties significant global expansion
Deep heritage particularly since property
benefits of strong brand and This is reflected in the assets typically disposed
Returns first, brand fit percentage of property Strong cultural links
location Luxury brands At the heart of operational
second portfolios in their domestic Corporate owners
A key consideration for owners Almost all luxury brands have efficiency
Led to most development markets Access to capital
when selecting operators extended into resorts and At the heart of delivering the
approaches being more tactical Second stage expansion is
than strategic residences (both owned and branded experience
often in overseas regions with
Organisations will have their Number 1 core competency fractional) Successful organisations Becomes more significant the
strong brand or cultural
desired location lists but market Vital that have strong core Resort developments are recognition have developed ways of higher the segment
opportunity often overtakes operations to support future aimed at capturing the leisure harnessing these strengths Large, high quality talent pool
growth organic or acquisition market of their customers required to support growth
Organic growth focused on
In the past 2 years the Home advantage Increasingly in short supply and
locations where there is All successful operators have
capacity within a segment either CEO or COO with many incorporation of a residential Easier to support new hotels predicted to get more so
years operational experience element has been required to from a logistical perspective as Recruitment and retention
Can create tension between
often with same organisation make new builds financially can leverage current suppliers,
Brand and Development
and often starting from very low viable staff redeployment is easier
Led to most brands having Its not just about operational
level and management can maintain
significant range of quality and closer oversight role. There are
Need stable central system to training
locations Multi segment approach also obvious time zone
support growth to enable new Staff engagement is just as
Only strongest brands can Many organisations have a advantages.
properties to be transitioned important feeling emotionally
adopt more strategic approach luxury brand to deliver a halo Need to build critical scale of
into the organisational smoothly connected to the organisation
In the absence of property effect operations before adding
Create pool of expertise that Structured career development
asset value increases, new The core business is mid- additional strains of distant
management contracts are one can be exported to new market and the luxury brand operations
of the key sources of increasing properties to ensure rapid delivers an aspiration for these
adoption of standard processes It is likely that there is stronger
financial return guests brand awareness in countries
and procedures
Development pipeline now THE Few organisations have mid- closer to home and also easier
most important KPI for the tier resort brands to build this brand awareness in
major listed hotel operators weaker countries due to
cultural similarities

Dated 9 June 2008
Agenda
1. Approach
3. Sector analysis
Region
Country
City
6. Next steps

Dated 9 June 2008
Region Analysis: Summary (1/2)

On a regional level, the ability for Client X to enter region in the short to medium term is high only in
Asia-Pacific
Ability for Client X to Enter Region in Short to Medium Term

Indicative
Middle East &

Requirements Europe North America Asia Pacific
Africa
Ability to develop management skills, detailed operating

procedures and central shared services
Ability for Client X to oversee operations from Location X
Ability to generate efficiencies from increased scale of

operations
Summary

Dated 9 June 2008
Region Analysis: Summary (2/2)

Demand and supply drivers are positive in both Asia-Pacific and the Middle East & Africa
Summary of Key Drivers

Indicative
Middle East &
Key Drivers Europe North America Asia Pacific
Africa
Demand drivers
Supply drivers
Historical performance
Ability for Client X to enter region in short to medium term
Investigate further?

Dated 9 June 2008
Region Analysis: Historical Performance Global

Luxury and upper upscale have outperformed the other segments on average in each region
ADR by Market (2005-07) Occupancy by Market (2005-07) RevPAR by Market (2005-07)

USD 2007 vs CAGR 2005-07 Occupancy 2007 vs PP Change 2005-07 USD 2007 vs CAGR 2005-07
67.3%
$136 $92
8.3% 0.9% 9.1%
Budget/Ec Mid-scale Upscale U. Upscale Luxury

Americas
Asia-Pacific
EMEA
Note: Growth rates based on local currency data

Source: Smith Travel Research; Deloitte Research & Analysis

Dated 9 June 2008
Agenda
1. Approach
3. Sector analysis
Region
Country
City
6. Next steps

Dated 9 June 2008
Country Analysis: Overview

The focus countries have been split into the top four, middle four and bottom three through the
quantification of key success factors and subsequent ranking of these
Quantification of key success factors Ranking of countries based on key success factors
The key success factors for Client X to be able to enter these countries The grouping has been determined by ranking the each country
have been identified as: from 1 to 11 based on the relative performance of the key drivers,
with 1 being the country with the best performance and 11 being
the country with the worst performance
Economic drivers
We have primarily ranked the growth metrics in order to identify

Demand drivers
markets where there is high potential for future growth
Supply drivers
Absolute metrics are included to show relative size of metric
Ability for Client X to implement
Historical performance
An analysis was performed determining the quantum of each of

these success factors

Dated 9 June 2008
Country Analysis: Ranking by Degree of Opportunity for Client X

The mid-market and upscale opportunity for Client X appears to be highest in Location A, followed by
Location B, Thailand, Location Y and the Philippines
Ranking of Mid-market and Upscale Country Markets

Indicative Opportunity
Country Rank
Location A 1
Location B 2
Thailand 3
Location Y 4
Philippines 5

Dated 9 June 2008
Country Analysis: Country Focus Location Summary (1/2)

Key forward-looking looking drivers have been assessed for each country
Summary of Key Forward-looking Drivers

Indicative
Location Z
Economy Demand Drivers Supply Drivers
Dep.
Country Intl Trips Domestic Domestic Dom. Tourism Dom. tourism Location Z Penetration
GDP Growth Intl Trips Growth Trips Trips Growth Spend1 spend growth departures Penetration (Rooms per
2007-15 2007 2007-15 2006 2007-11 2007 2007-15 2006 (Rooms per Million
(%) (Million) (%) (Million) (%) ($bn) (%) (Thousands) thousand trips) Inhabitants)
Location Y 4.9% 6.4 3.0% 102 1% 19.6 5.5% n/a 0.1 1.2k
Location D 2.3% 8.3 3.2% 341 1% 216.5 4.6% 1,908 0.3 12.1k
Location A 13.3% 74.7 6.4% 1,196 10% 105.4 16.8% 361 0.2 1.0k
India 11.8% 5.0 6.7% 445 17% 22.4 10.4% n/a 0.1 0.1k
Singapore 5.5% 8.3 4.3% 906 11% 1.2 7.1% 230 1.5 6.8k
Thailand 5.9% 14.4 4.2% 85 8% 8.5 7.0% 825 0.3 5.6k
Philippines 9% 3.1 5.8% 33 15% 3.6 7.1% 485 0.3 0.3k
Location B 13.8% 2.9 8.8% 17 16% 1.5 8.5% 299 0.3 1.5k
Malaysia 6.2% 21.0 7.7% 39 6% 2.1 8.9% 111 0.4 5.8k
Indonesia 12.3% 5.5 7.5% 226 7% 7.7 12.1% 100 0.1 1.2k
Maldives n/a 0.7 4.7% n/a n/a 0.01 0% n/a 1.4 n/a
Ranked
Note: 1. Excludes business spend as data unavailable
Source: See reference pack

Dated 9 June 2008
Country Analysis: Country Focus Location Summary (2/2)

followed by key historic drivers such as valuations, key performance indicators and profitability,
and Client Xs ability to implement
Summary of Key Historic Drivers

Indicative
RevPAR Performance1 RevPAR Growth in local currencies Profitability Valuation
Ability to Key Cities Upscale / Valuation Val. Growth
Country Key Cities Growth Luxury U. Upscale Mid-market Budget GOP Margin2 per Key per Key
implement
2007 2006-07 2005-07 2005-07 2005-07 2005-07 2006 2006 2002-06
(USD) (%) (CAGR) (CAGR) (CAGR) (CAGR) (%) (USD 000s) (CAGR)
Location Y Very high 138 6% 3% -4% n/a n/a n/a 387 4%
Location D High 119 8% 8% -2% 2% 4% 28% 831 5%
Location A High 118 3% n/a 0% -2% n/a 44 50% 389 8%
India Low 207 32% 28% 30% n/a n/a 56% n/a n/a
Singapore Medium 141 22% 23% 21% 31% n/a 42% 384 10%
Thailand High 80 1% 2% 8% 14% n/a 46% 194 (0.4)%
Philippines High 79 15% 16% 11% n/a n/a n/a 96 4%
Location B High 96 35% n/a 30% n/a n/a n/a n/a n/a
Malaysia High 63 10% 11% 15% n/a n/a 30% 131 9%
Indonesia High 56 34% 16% 12% 17% n/a 26-26% 116 4%
Maldives Medium 4301 n/a n/a n/a n/a n/a n/a n/a n/a
Ranked
Note: 1. Maldives figures for RevPAR and RevPAR growth are based upon Luxury and Upper Upscale hotels only; 2. GOP Margin is Income Before Fixed Charges based upon capital city
figures with the following exceptions: Location A (Beijing, Hong Kong and Shanghai), India (Mumbai), Indonesia (Jakarta, Bali)

Dated 9 June 2008
Country Analysis: Recap Location Drivers Ranking (1/2)

Location A and Location Y appears to provide the best opportunities for Client X
Ranking of Key Forward-looking Drivers

Indicative
Location Z
Economy Demand Drivers Supply Drivers
Dep.
Ability to
Country Location Z GDP Intl Trips Domestic Domestic Dom. Tourism Dom. tourism
implement
departures Growth Intl Trips Growth Trips Trips Growth Spend1 spend growth Penetration Penetration
2006 2007-15 2007 2007-15 2006 2007-11 2007 2007-15 Rooms/Trip Rooms/Popn
(Rank) (Rank) (Million) (Rank) (Million) (Rank) ($bn) (Rank) (Rank) (Rank)
Weighting Critical Very High High High High
Top 2
Location A High 4 2 74.7 5 1,1961 5 105.4 1 4 3
Location Y Very high n/a 9 6.4 11 102 10 19.6 9 2 4
Middle 5
Location B High 5 1 2.9 1 17 2 1.5 5 7 6
Philippines High 3 5 3.1 6 33 3 3.6 6 6 2
Thailand High 2 7 14.4 9 85 7 8.5 8 8 7
Indonesia High 8 3 5.5 3 226 6 7.7 2 3 5
Malaysia High 7 6 21 2 39 8 2.1 4 9 8
Bottom 4
India Low n/a 4 5 4 445 1 22.4 3 1 1
Singapore Medium 6 8 8.3 8 1 4 1.2 7 12 9
Location D High 1 10 8.3 10 341 9 216.5 10 5 10
Maldives Medium n/a n/a 0.7 7 n/a n/a 0.01 11 11 n/a

Note: Location A figures for phase 1 based on Greater Location A; 1. Domestic trips for Location A includes mainland Location A only

Dated 9 June 2008
Country Analysis: Recap Location Drivers Ranking (2/2)

Location A and Location Y appears to provide the best opportunities for Client X
Ranking of Key Historic Drivers

Indicative
RevPAR Performance RevPAR Growth in local currencies Profitability Valuation
Key Cities Growth 1
U. Upscale/ Valuation Val. Growth per
Country Key Cities Luxury Upscale Mid-market Budget GOP Margin2 per Key Key
2007 2006-07 2005-07 2005-07 2005-07 2005-07 2006 2006 2002-06
(USD) (Rank) (CAGR) (Rank) (Rank) (Rank) (Rank) (USD 000s) (Rank)
Weighting Medium Medium Medium Medium
Top 2
Location A 118 9 n/a 8 5 n/a 2 389 3
Location Y 138 8 7 10 n/a n/a n/a 387 6
Middle 5
Location B 96 1 n/a 2 n/a n/a n/a n/a n/a
Philippines 79 5 4 6 n/a n/a n/a 96 7
Thailand 80 10 8 7 3 n/a 3 194 8
Indonesia 56 2 3 5 2 n/a 7 116 5
Malaysia 63 6 5 4 n/a n/a 5 131 2
Bottom 4
India 207 3 1 1 n/a n/a 1 n/a n/a
Singapore 141 4 2 3 1 n/a 4 384 1
Location D 119 7 6 9 4 1 6 831 4
Maldives 4301 n/a n/a n/a n/a n/a n/a n/a n/a

Dated 9 June 2008
Country Analysis: Drivers Economic and Demographic

The selected countries boast encouraging demographic indicators and are forecast continued strong
demand growth
Summary of Key Forward-looking Economic and Demographic Drivers

Indicative
Economy Average Population Demographics and Spending Demand
Middle Class
Disposable Income Consumer Total Receipts
GDP per Capita Total Population Total Income held by Estimate (2007; PDI per Capita Expenditure Intl Receipts 2006 Growth 2006-112,3
Country (2007; USD) (Million) middle class1 (%) USD Billion) (2007; USD) (2007; USD) (USD Billion) (CAGR)
Location A2 2,450 1,291 35% 491.4 1,063 910 34.26 9.7%
Philippines 1,582 77 34% 21.9 706 1,098 2.77 7.4%
Location Y 19,680 49 42% 230.4 11,196 10,790 5.84 4.5%
Thailand 3,700 63 35% 42.2 1,814 1,980 10.51 5.5%
Location B 810 84 36% 11.4 369 510 2.30 1.4%
Note: 1. Percentage of income received by the 40% of households with middle bracket of income; 2. Location A figures for phase 2 focus on Mainland Location A
Source: UNICEF; Price Waterhouse Coopers; The Economic Intelligence Unit; Deloitte Research & Analysis

Dated 9 June 2008
Country Analysis: Drivers Investment in Tourism

Chinese investment in travel and tourism is both significantly larger and forecast to grow more
quickly than other focus countries
Capital Investment (2000-20)1 Capital Investment (2007): Public vs Private

$ Billions Percent
CAGR
125.8 1.7 15.3 3.8 1.5
Historic Forecast 2000-07 2007-20 Public
Location A 19.0% 10.1%
Private
Location Y 2.5% 6.4%

Thailand 4.5% 6.9%
Philippines (0.8)% 5.7%
Location B 14.0% 6.5%
Note: Private capital investment includes foreign investment

Source: World Travel and Tourism Council; Deloitte Analysis

Dated 9 June 2008
Country Analysis: Historical Performance RevPAR

RevPAR performance varies, both in absolute level and growth CAGR (2005-07), by both geography
and market segment
RevPAR by Market (2005-07)

USD 2007 vs CAGR 2005-07
Budget / Upscale /
Mid-/scale Luxury
Economy Upper Upscale
Location A
Hong Kong
India
Indonesia
Location D
Malaysia
$123 Philippines
Singapore
Location Y
Thailand
Location B
12.1%
Note: Location D Budget/Economy, Malaysia Upscale / Upper Upscale, and Philippines Upscale / Upper Upscale are all 2006-07 Percentage Change; Growth rates based on local currency data

Dated 9 June 2008
Country Analysis: Historical Performance Occupancy

However occupancy shows a more varied picture with a higher proportion of categories showing
negative change (2005-07)
Occupancy by Market (2005-07)

Occupancy 2007 vs Percentage Point Change 2005-07
Budget / Upscale /
Mid-/scale Luxury
Economy Upper Upscale
Location A
Hong Kong
India
Indonesia
Location D
Malaysia
71.8% Philippines
Singapore
Location Y
Thailand
Location B
1.9%
Note: Location D Budget/Economy, Malaysia Upscale / Upper Upscale, and Philippines Upscale / Upper Upscale are all 2006-07 PP Change; Growth rates based on local currency data

Dated 9 June 2008
Country Analysis: Drivers Business and Tourism Country Rating

The overall business environment and travel and tourism prioritisation scores appear to be strongest
in Location A, Location Y and Thailand
Business Environment and Travel and Tourism Prioritization Score Card (2007)
Rating (1 = low)
Government prioritization of Effectiveness of marketing and

Country Business Environment Rating1 Overall outlook
travel and tourism2 branding2
Location A 5.6 5.2 4.7
Philippines 5.9 5.1 4.4
Location Y 7.1 5.1 5.1
Thailand 6.7 6.1 5.9
Location B 4.8 5.4 4.7
Very Good Good Moderate Poor
Note: 1. The business environment rankings model examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities,
policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.
Government prioritization examines the level of government consideration given to travel and tourism in comparison to other industries. 2. The effectiveness of marketing and
branding relates to that used to attract tourists into the country. In both cases, the scale is from 1 to 7; The Business Environment rating scale is from 1 to 10
Source: World Economic Forum: The Travel & Tourism Competitiveness Report 2008; Economic Intelligence Unit: Country Forecast February 2008; Deloitte Research & Analysis

Dated 9 June 2008
Country Analysis: Rooms Supply, Pipeline and Penetration

Whilst Location B has the largest pipeline as a proportion of existing hotels, Location A has the
largest absolute number of hotels in the pipeline
Mid-Market/Upsc. Room Supply and Pipeline (2007-10) Change in Mid-Market/Upscale Room Supply
Percentage, Thousand Rooms Penetration (2007-09)
Rooms per Thousand International and Domestic Travellers
200,586 2,702 4,851 21,161 3,839

8,660 220 1,162
13,007 385 184 540
1,434
500 5,264
65,690
1,455
489
113,229 1,817 4,447 13,301 1,355
Current 2008 2009 2010+
Note: Supply data is based on all global and regionally branded hotels only

Dated 9 June 2008
Country Analysis: Key Performance Indicators

Location B, Thailand and Philippines have shown good RevPAR growth, predominantly driven by ADR
growth, with some occupancy gains in Location B
ADR by Country (2005-07) Occupancy by Country (2005-07) RevPAR by Country (2005-07)

USD 2007 vs CAGR 2005-07 Occupancy 2007 vs PP Change 2005-07 USD 2007 vs CAGR 2005-07
$94
$61
65%
9.7% (5.0)% 5.6%
Mid-Market Upscale
Location A
Philippines
Location Y
Thailand
Note: Average indicators are based on weighted average and therefore skewed to towards the large Location A mid-market/upscale room numbers Location B
Growth rates based on local currency data; Location B is a combination of upscale and upper upscale KPIs
Source: HotelBenchmark; Lodging Econometrics; Deloitte Research & Analysis

Dated 9 June 2008
Country Analysis: Profitability

Mid-Market/Upscale room profitability grew across all countries; the exception being Location Y
Room Revenue & Profitability by Country (2005-06)

Comparative RevPAR Index 2005, 2006 vs. GOP Margin 2005, 2006
2006
2005
Location Y
Location B
Average 2006: 77
Average 2005: 71 Thailand
Philippines
Locati
on A
Average 2005: 38.1% Average 2006: 40.4%
Note: USD RevPAR 2005 and equivalent USD RevPAR 2006 assuming local currency growth
Source: HotelBenchmark; Deloitte Analysis

Dated 9 June 2008
Country Analysis: Illustrative Supply Opportunity

Location A Mid-Market/Upscale opportunity drastically exceeds that of the other countries; with
Thailand and Location B showing a still sizeable opportunity
Illustrative Supply Opportunity (2009-18)

Thousand Mid-Market/Upscale Rooms
247.2k
250
245
240
Relative #
~1050 ~12 ~4 ~91 ~102
hotels:
Note: Estimates are based on a number of assumptions and should be seen as illustrative and not regarded or relied upon as a forecast by Deloitte of expected future market behaviour.
Actual outcome could be materially different to that shown
Source: World Travel & Tourism Council; Lodging Econometrics; Hotel Benchmark; Deloitte Research & Analysis

Dated 9 June 2008
Country Analysis: Illustrative Yields New Build Hotel

Location B offers the highest yields with the least investment. The increases in hotel IBFC in
Philippines and Thailand have been higher than the increases in construction costs, resulting in
increasing yields
Illustrative Mid-market Yield by Country (2005-06)
Construction Costs per Room Thousand USD vs. Relative Yield
2006
Location Y
2005
Thailand
Location B
Philippines
Location A
Construction costs increasing faster Construction costs increasing less

than increases in hotel IBFC than increases in hotel IBFC
Note: Construction costs exclude land costs; IBFC excludes ownership costs (rates, insurance, rent, interest, Annual Income before Fixed Charges per available room,
management fees, depreciation and taxes). Relative yield equals IBFC per key divided by construction costs per key expressed as a percentage of construction costs per Room
Source: Hotel Benchmark; Davis Langdon; Deloitte Research & Analysis

Dated 9 June 2008
Country Analysis: Location YHotel Market Overview

The Location Yinbound market remains stable, while the outbound and domestic market are growing
at high rates
Inbound Outbound Domestic Hotels Drivers
Except for the dent in 2003 Location Ys outbound tourism The domestic travel market The Location Z hotel market The evidence supports that the
which was caused by the market is growing at a dynamic has been growing at a rate of has been stable growing 3.2% outlook for the domestic hotel
outbreak of SARS, the rate of 10.4%, while 13% but is forecasted to slow with inflation at 3%. market is positive as GDP
Location Ytourism market is expenditure is growing at a down to 1.4%. Although the accommodation continues to grow along with
growing at a steady rate of even higher rate of 12% driven There was a dip when the supply is dominated by above PDI
4.2% and is forecasted to grow by the strong Location Z Won. Location Z Won strengthened, mid-market hotels, the budget Additionally a growing
at 4.5% in the near future. However, departure and which was balanced by an hotel sector has been growing number of people are
76% of all visitors come from expenditure growth is increase in international travel. at 17.6% rate for the past five eating out which will
nearby Asian countries such forecasted to slow to 4.4%. years. support hotels F&B
Domestic travel spend
as Location D (37%), Location Asian countries such as increased even when the Luxury/upper upscale hotels proposition.
A (14%) and Location C (5%) Location A, Location B, number of travellers decreased with more than 200 rooms The market for international
and also some from the U.S Location C and Location D indicating a higher spend per represent four percent of the travellers is likely to be remain
(10%). The strongest growth is remain the most popular trip. entire lodging supply only. stable without a fluctuation in
of Location A (16%) and countries to visit, representing the exchange rate.
Increase from 49 k won/trip Despite Client X market
Location C (24%). more than 75% of all outbound
in 2005 to 55.3 k won/trip leading position in Location X,
However, receipts from tourists trips.
in 2006 there are several competitors
of 5.6 Trillion Won is growing with similar propositions.
include the two biggest cities
at 3% which is lower than that Several of them have recently
of Location Z Location E and
of visitors, despite an undergone refurbishment
Location X, represent 50% of
increased length of stay, but programs.
all trips.
because of a decrease in
spend per night

Dated 9 June 2008
Country Analysis: Summary Key Decision-making Drivers

The summary of key decision-making drivers shows medium to high results for most countries
Summary of Key Decision-making Drivers

Indicative
Historical
Demand Location Z Illustrative Performance Investment in Business Illustrative Ability to
Key metrics
Drivers Arrivals opportunity (KPIs and Tourism Environment Yield implement
profitability)
Weighting Medium Medium High Medium Low Low High High
Location A
Philippines
Location Y
Thailand
Location B

Dated 9 June 2008
Country Analysis: Summary Ranking

Based on the 3 most important factors of illustrative opportunity, illustrative yield and ease to
implement, Location A appears to be the first choice for mid-market growth
Illustrative Total
Country Illustrative yield rating Ease to implement Ranking
opportunity rating (max. 30)
Location A 10 7 8 25 1
Philippines 2 5 4 11 5
Location Y 1 4 10 15 4
Thailand 5 7 6 18 3
Location B 5 10 5 20 2
Key Criteria Description High Low

Illustrative opportunity Based on the forecast increase in international and domestic demand to 2018, assuming constant occupancy and no increase in
rating penetration of hotels
Illustrative yield rating Illustrative yield for each location, based on investment cost required and indicative profitability 10 1
Ease to implement A subjective rating based on geographical proximity and Deloitte insight on local market conditions
Overall Ranking Relative positioning of locations based on equal weighting of 3 key criteria

Dated 9 June 2008
Agenda
1. Approach
3. Sector analysis
Region
Country
City
6. Next steps

Dated 9 June 2008
Gateway Cities: Ranking by Degree of Opportunity for Client X

Shanghai is first when ranked by degree of opportunity, and followed by Beijing, Bangkok, Ho Chi
Minh City and Singapore in the remaining top 5 positions
Ranking of Luxury Gateway Cities

City Rank
Shanghai 1
Beijing 2
Bangkok 3
Ho Chi Minh City 4
Singapore 5
Hong Kong 6
New York 7=
Tokyo 7=
London 9=
Paris 9=

Dated 9 June 2008
Gateway Cities: Why Luxury

Client X has an opportunity to enter the luxury hotel market abroad based on both external and
internal factors
Category Section Detail
Overall profitability of luxury hotels is higher than other market sectors both in terms of absolute quantum vs benchmark sample and overall
margin
Financials Luxury focused hotel chains have achieved historic growth in operating margin
Market As an indicator of both analyst and investor confidence in the sector, share prices of luxury hotels have outperformed the index for hotels
Luxury hotels tend to have higher yields than lower rated hotels
Performance of luxury hotels KPIs has shown growth above other segments and (by definition) higher RevPAR levels
KPIs
Historically, luxury segment has outperformed upscale segment throughout the cycle
Currently strong growth in luxury hotel supply in the AsiaPac market creates both opportunity and risk:
An opportunity to get involved in current development or flag an independent or speculative development (e.g. Hong Kong)
Timing Supply growth If the luxury market is not entered now, the increase in luxury product in the AsiaPac market will make it increasingly hard to find
development opportunities or acquisition opportunities at a reasonable price. Additionally it will become increasingly hard to create a new
brand based on competition versus already established brands
Growth in valuations per key of luxury hotels is based on increase in value of real estate and quality of location, brand and product
Real Estate Valuations Real estate of luxury hotels tends to be in prime locations and, if owned, tends to create a further opportunity for value creation. This is the
unique differentiator of luxury versus other segments as premier locations command prices beyond the economic multiples
Client X is a luxury brand, focusing on luxury product would be consistent with

Brand Potential to leverage both brand and
customer perception
experience into overseas growth, which is not
Current hotel experience is in the luxury segment, which is different to other possible for mid-market segment
Experience
segments
Client X
Vision Growth in luxury hotels is consistent with the vision of the senior management in Client X
Scale Lower number of luxury hotels (compared to mid-market) required to achieve critical mass

Dated 9 June 2008
Gateway Cities: Demand (1/2)

Most gateway cities analysed are forecast continued strong growth in domestic and international
tourism, which may drive future demand for hotels
Summary of Key Forward-looking Drivers

Indicative
Country Economic City Demand Illustrative
Country Demand Drivers
Indicators Drivers Opportunity
Avg. Trip Illustrative
Real GDP Per Tourist Intl Trips Domestic Domestic Average Trip Spend Growth additional u. upscale /
GDP Per Capita Growth Arrivals Intl Trips Growth Trips Trips Growth Spend luxury hotels required
Capita 2006 2006-13 2006 2006 2006-11 2006 2006-11 2006 2006-11 by 2018
Country (USD) (CAGR) (Million) (Million) (CAGR) (Million) (CAGR) (USD) (CAGR) (# hotels)
Bangkok 3,166 4.6% 10.4 14 4% 86 8% 847 5.6% 53
Beijing 2,012 8.9% 3.6 49 8% 1,196 8% 272 11.0% 123
Ho Chi Minh City 723 6.6% 2.3 2 13% 17 16% 893 (0.5)% 15
Hong Kong 27,499 4.1% 8.1 16 2% 6 4% 454 4.2% 46
London 39,681 1.8% 15.6 30 2% 129 (5)% 1,055 2.6% 58
New York 44,118 1.3% 6.2 51 5% 3,079 2% 2,090 2.1% 62
Paris 36,706 1.6% 9.7 79 3% 165 2% 234 2.6% 44
Shanghai 2,012 8.9% 4.3 49 8% 1,196 8% 272 11.0% 115
Singapore 31,028 3.4% 9.5 8 5% 1 10% 725 5.0% 14
Tokyo 34,264 1.8% 1.5 7 5% 341 1% 1,155 4.6% 20
Note: Growth rates based on local currencies


Dated 9 June 2008
Gateway Cities: Demand (2/2)

Historic RevPAR performance is encouraging for the gateway cities. Half the benchmark samples
having experienced double-digit growth in 2004-07, driven primarily by higher ADR
Summary of Key Historic Drivers

Indicative
Upper Upscale / Luxury Upper Upscale / Luxury
Upper Upscale / Luxury Benchmark Performance
Benchmark Profitability Market Valuation
Occupancy GOP Margin Valuation Val. Growth
Occupancy Change ADR ADR Growth RevPAR RevPAR GOP Margin Growth per Key per Key
2007 2004-07 2007 2004-07 2007 2004-07 2006 2005-06 2006 2002-06
Country (%) (p.p. 1 p.a.) (USD) (CAGR) (USD) (CAGR) (%) (p.p. 1) (USD 000s) (CAGR)
Bangkok 70.5% (1.9)% $168 5.5% $118 2.8% 44.6% (0.1)% 195 1.7%
Beijing 68.9% (0.7)%2 $141 5.0%2 $77 3.9%2 53.7% 1.7% 229 7.0%
Ho Chi Minh City 75.8% 5.0%2 $116 38.8%2 $88 48.6%2 52.4% 3.4% n/a n/a
Hong Kong 83.0% 0.5% $227 10.8% $189 11.6% 40.2% 2.1% 624 4.5%
London 79.5% 1.7% $477 1.7% $379 11.2% 42.8% 4.2% 724 2.7%
New York 83.1% 0.7% $397 13.7% $330 14.7% 37.4% (1.9)% 540 4.0%
Paris 77.9% 2.8% $533 5.8% $415 9.9% 33.1% 4.4% 664 1.6%
Shanghai 68.6% (2.4)% $196 7.8% $135 4.2% 47.1% (0.7) 315 7.5%
Singapore 81.4% 1.8% $187 16.6% $152 19.3% 38.9% 2.5% 384 3.9%
Tokyo 76.1% (2.2)%2 $232 6.3%2 $177 3.3%2 28.3% 0.9% 831 4.2%
Note: Growth rates based on local currencies. 1

Average percentage-point change per annum. 2
Based on figures from 2006-07

Dated 9 June 2008
Gateway Cities: Current and Pipeline Supply

The largest pipelines both in terms of total rooms and as share of current supply are found in the
Chinese cities
Current (2007) and Pipeline (c. 2008-10) Upper Upscale / Luxury Supply by City
Thousand Rooms
Predominantly
independents
Pipeline: 8.7% 15.9% 12.8% 33.6% 5.5% 11.3% 2.8% 24.1% 2.1% 0.8%
Current Supply Pipeline


Dated 9 June 2008
Gateway Cities: Key Performance Indicators

New York, Singapore and Ho Chi Minh City have experienced above-average growth in RevPAR 2004-
07
Benchmark RevPAR by Market

USD 2007 vs CAGR 2004-07
Average: $206
Average: 12%
Note: Ho Chi Minh City growth rate for 2005-07; Beijing and Tokyo are 2006-07
Source: Hotel Benchmark; Deloitte Research & Analysis

Dated 9 June 2008
Gateway Cities: Profitability

Luxury hotels in Beijing, Ho Chi Minh City increased their profitability from 2005 to 2006 with little
addition to overall RevPAR. Bangkok and Shanghai did not experience profit growth
Room Revenue & Profitability by City (2005-06)

Comparative RevPAR Index 2005, 2006 vs. GOP Margin 2005, 2006
2006
2005
Average 2006: 210
Average 2005: 182

Low Cost
Average 2005: 35.8% Average 2006: 39.0%
Note: USD RevPAR 2005 and equivalent USD RevPAR 2006 assuming local currency growth
Source: Hotel Benchmark; Deloitte Research & Analysis

Dated 9 June 2008
Gateway Cities: Illustrative Supply Opportunity

The Chinese gateways appear to have the largest opportunity, driven by growth in demand
Illustrative Supply Opportunity (2009-18)

Thousand Upper Upscale / Luxury Rooms
Relative #
~53 ~123 ~15 ~46 ~58 ~62 ~44 ~115 ~14 ~20
hotels:
Note: Estimates are based on a number of assumptions and should be seen as illustrative and not regarded or relied upon as a forecast by Deloitte of expected future market behaviour.
Actual outcome could be materially different to that shown
Source: World Travel & Tourism Council; Lodging Econometrics; Hotel Benchmark; Deloitte Research & Analysis

Dated 9 June 2008
Gateway Cities: Valuations

Hotels in Shanghai and Beijing are experiencing the greatest level of growth in property value of
properties across the gateway cities
Upper Upscale / Luxury Valuation per Key (2006)

USD Thousands 2006 vs Local Currency CAGR 2002-06
Average: $501k
Average: 4.1%
Note: USD Valuation 2005 and equivalent USD Valuation 2006 assuming local currency growth. Valuations based on Upper Up-Scale and Luxury only. Figures for Ho Chi Minh City
unavailable. 1 CAGR 2002-06 shows low valuation due to 9/11. New York value taken from 2000-06
Source: HVS International; Deloitte Research & Analysis

Dated 9 June 2008
Gateway Cities: Yields Acquisition

Thailand and Chinese cities offer the highest yields at relatively low investment levels
Illustrative Acquisition Upper Upscale / Luxury Yield by City (2005-06)

Valuation Thousand USD vs. Benchmark Percentage Return per Annum
2006
2005
Tokyo
Paris
Hong Kong
New York
Relatively high return and low investment costs
Singapore Shanghai
Locati
on X
Bangkok Beijing
Market valuations increasing faster Market valuations increasing less

Note: Valuation figures not available for Ho Chi Minh City; IBFC excludes ownership costs (rates, insurance, rent, interest, Annual Income before Fixed Charges per available room,
management fees, depreciation and taxes). Relative yield equals IBFC per key divided by valuation per key expressed as a percentage of valuation per Room
Source: Hotel Benchmark; HVS International; Deloitte Research & Analysis

Dated 9 June 2008
Gateway Cities: Yields New Build

The three Chinese cities appear to offer the highest yield relative to construction costs. New build
yields are higher than acquisition yields because of the lower costs
Illustrative New Build Upper Upscale / Luxury Yield by City (2005-06)

Construction Costs per Room Thousand USD vs. Relative Yield
2006
2005
Tokyo
Location X
Hong Kong
Singapore
Bangkok Beijing
Shanghai
Ho Chi Minh
Construction costs increasing faster Construction costs increasing less

Note: Construction costs exclude land costs; IBFC excludes ownership costs (rates, insurance, rent, interest, Annual Income before Fixed Charges per available room,
management fees, depreciation and taxes). Relative yield equals IBFC per key divided by construction costs per key expressed as a percentage of construction costs per Room
Source: Hotel Benchmark; Davis Langdon; Deloitte Research & Analysis

Dated 9 June 2008
Gateway Cities: Summary Key Decision-making Drivers

The summary of key decision-making drivers shows the majority of Asia-Pacific cities with medium to
high results
Summary of Key Decision-making Drivers

Indicative
Ho Chi Hong
Key Drivers Bangkok Beijing London New York Paris Shanghai Singapore Tokyo
Minh City Kong
Demand drivers
Location Z Arrivals
Supply drivers
Historical KPI performance
Historical profitability
Illustrative opportunity
Illustrative yield unknown unknown
Ability to implement

Dated 9 June 2008
Gateway Cities: Summary Ranking

The Chinese cities of Shanghai and Beijing, followed by the other five gateway cities in Asia-Pacific
are all attractive options for luxury gateway market entry
City Illustrative opportunity rating Illustrative yield rating Ease to implement Total (max. 30) Ranking
Bangkok 6 9 8 23 3
Beijing 10 10 5 25 2
Ho Chi Minh City 2 91 7 18 4
Hong Kong 5 5 5 15 6
London 6 51 2 13 9=
New York 6 6 2 14 7=
Paris 5 6 2 13 9=
Shanghai 10 8 9 27 1
Singapore 2 7 8 17 5
Tokyo 3 3 8 14 7=

Illustrative opportunity Based on the forecast increase in international demand to 2018, assuming constant occupancy and no increase in penetration of hotels
rating
Note: Rating 10 = high, 1 = low. 1. Proxy based on construction cost and local market knowledge

Dated 9 June 2008
Agenda
1. Approach
3. Sector analysis
Overview
Organic
M&A
6. Next steps

Dated 9 June 2008
Strategic Options: Overview

At the highest level, Client X has to chose from 3 strategic options
Current Value Realisation Status Quo Growth Strategy
Sell Client X Fix Client X operations

Real estate manager with Defend against marketplace
new brand

Dated 9 June 2008
Strategic Options: Pros & Cons

Growth in luxury hotels in gateway cities carries high investment cost and significant risk factors.
The mid-market option is potential very attractive under the franchise-in option
Option 1: Mid-Market Countries Option 2: Luxury Gateway Cities Options 3: M&A
Growth opportunities Existing brand Proven brands

Existing development partners Economies of scale with current Speed
Gain platform in a master franchise product Acquire expertise
Growth opportunities Current market discount
Advantages Equity capability. Choice of segment
No sector experience Current capital investment requirement Credit markets

Potential to devalue Client X brand Current operational performance Post Merger Integration risk
Investment requirement or need to Implementation risk
acquire skills Skills requirement.
Disadvantages

Dated 9 June 2008
Strategic Options: Organic Growth Available Operating Models

Client X will need to follow an owned/leased operating model in both the mid-market and luxury
sector in the short to medium term, until it is able to prove its ability to operate hotels profitably to
owners
Mid-market in focus countries Luxury in gateway cities
Owned/Leased
under Client X
Brand or Client X Entering the mid-market with a Client X brand would If Client X is willing to commit significant investment
Brand Family be high risk due to the lack of an existing brand, and capital into owned/leased hotels, it will be able to
lack of experience and skills in the mid-market. enter gateway cities in the luxury sector
Managed
under Client X
Brand or Client X For the above reasons it would be highly risky to Client X will only be able to secure management
Brand Family attempt to manage hotels under a Client X mid- contracts in the luxury sector in gateway cities (other
market brand. Furthermore, returns are likely to be than potentially in Location X) once it has a proven
higher under a franchised in brand. track record. This will be in the medium to long term.
Owned/Leased
under franchised in
brand Depending availability within each country, Client X Not applicable as luxury operators do not franchise
has the potential to franchise in a global brand and out their brands.
capitalise on their brand, operational experience and
procedures, sales and marketing platform, etc.
Managed
under franchised in
brand Not applicable in short to medium term until Client X Not applicable as luxury operators do not franchise
can prove to owners that it can operate effectively. out their brands.
= Operating models available to Client X in the short to medium term
Source: Deloitte Research & Analysis 67 2008 Deloitte & Touche LLP. Private and confidential
Dated 9 June 2008
Strategic Options: Key Components of a Platform for Profitable Growth

Client X will need to ensure it has the necessary platform to ensure profitable growth
Global or regional sales and marketing team driving reservations

Participation in global marketing strategies and programmes (e.g. promotions, yield management)
Sales
Sales and
and marketing
marketing
Access to a globally recognised guest loyalty program (driving 30% - 50% of paid room nights)
Strong cost effective distribution systems including website and GDS
Standard operating procedures

Improving hotel operating margins through procurement savings
Operations
Operations Providing shared services
Providing access to training
Brand standards
Architecture and construction services
Development
Development
Providing local development expertise
Financial modelling
Real
Real estate
estate Expertise in maximising real estate values

Dated 9 June 2008
Strategic Options: Focus Country International Arrivals

Based on number of international arrivals (line width) and historical growth (%), Location A and
Location B appear to be the most attractive country options. However, this will depend on risk/reward
aptitude
Suggested countries of focus
Location B
Location A 12%
18% 20%
16% 51%
4% Rep. of
Location Z 30%
3% 15%
22% 16%
Philippines
Thailand
13% Approx. # Intl Arrivals
3.0m
11% 1.0m
0.5m
Historical growth &
Note: Reflects major population flows between focus countries only 3% International Arrivals
Source: Euromonitor; Deloitte Research & Analysis 2002-06

Dated 9 June 2008
Strategic Options: Approach Luxury Gateway Cities

Viable approach but requires development of operational platform and recruitment of a development
team. Consequently rollout rate will be slow at c. 8-10 hotels in 10 years
Begin development activity (sourcing opportunities) in top target cities simultaneously with a view to opening 1
property in year 3, second in year 4, third in year 5.
Top target cities Shanghai, Beijing, Bangkok, Ho Chi Minh City
Approach Based on current analysis Phase Two opportunities in Years 5-10 should focus on Hong Kong, Singapore and Tokyo
Approach
Market analysis should be repeated within first five years to refine development activity
Need experienced Development Team and this will take time and money to recruit with inherent risk
Due to lack of brand awareness outside of Location Z the management contract model is not appropriate and so the
ownership model is the most viable option
Due to lack of brand awareness outside of Location Z it will be more difficult to acquire assets in these competitive
cities
The expenditure/revenue profile will show:
Comment/Caveat
Comment/Caveat Significant capital outlay in years 1 2 with no revenue
Significant capital outlay in years 3 5 with limited revenue
Significant capital outlay in years 5 8 with moderate revenue
Lack of experienced management talent pool to manage new properties
Lack of stable and efficient operating platform to deliver profitable growth

Dated 9 June 2008
Strategic Options: Approach Mid-market Countries

Franchising in Location A offers the most attractive opportunity for growth both in terms of speed
and building a reliable operational platform
Initial focus on Location A in years 1 5 with a target of 5 hotels

Three potential approaches:
- Major brand franchise and building assets
- Acquire small portfolio of hotels ( 5 10 properties)
- Acquire and convert single 4* properties
Approach
Approach
Years 5 7 focus on Location B and Thailand through single asset development
Need to begin Location B development activity in year 3 due to long lead time
Begin Thailand development activity in year 4
Results in portfolio of 15 20 hotels within 10 years
Lack of operational platform to support profitable growth which is particularly important for the mid-market
Franchise option most attractive as will gain the most important elements of platform such as brand standards,
standard operating procedures, training, central reservations and global marketing
Remaining elements are the easiest to implement locally such as centralised IT systems
Lack of experienced management pool to support growth
Lack of experienced development team
Opportunity to build on existing relationship with Suning
Comment/Caveat
Comment/Caveat
Opportunity for rapid growth through acquisition of small portfolio and moderate growth through conversion of existing
properties in Location A
Precise location in Location A very important as not all secondary cities offer the best opportunities
Review geographical options in year 4 before beginning phase 2

Dated 9 June 2008
Strategic Options: Approach M&A

Offers best option for growth with sector choice dependent on Client Xs growth ambitions
Mid-market segment offers potentially larger more stable growth

Sector
Sector Dynamics
Dynamics Luxury segment offers greater return in a growing market but greater risk in a declining market and less opportunity
for growth in scale
Cultural fit to Client X

Geographic location of headquarters
Implementation
Implementation Capabilities acquired talent, platform, property assets
Considerations
Considerations
Synergies with current Client X brand and operations
M&A provides quickest, least risky option for growth

Comment/Caveat
Comment/Caveat Returns will clearly be dependent on exact nature of acquisition target
Choose segment based on vision

Select targets based on fit (return, culture, footprint)
Approach
Approach
Implement via tactical delivery of JV / majority stake / minority stake, as possible

Dated 9 June 2008
Strategic Options: Summary

In summary, Client X should build on the strengths of Client X, obtain an experience CX team to drive
forward and focus on expansion close to home
Category Detail
Valuable asset in Client X that needs realising to full potential

Build on strengths Operational improvement and capital investment
Increase returns and become showcase for growth strategy
To realise potential in current portfolio

Obtain experienced CX team
To drive forward chosen growth strategy
Easier to manage, can leverage existing operations, brand awareness

Start close to home
Most major multinational and regional players adopted this approach
The luxury segment in AsiaPac is out performing other regions and there is still plenty of future growth
Trust the data
Shanghai, Beijing, Bangkok, HCMC, Singapore, Hong Kong offer best market opportunities

Dated 9 June 2008
Agenda
1. Approach
3. Sector analysis
Overview
Organic
M&A
6. Next steps

Dated 9 June 2008
Organic: Gateway Cities Ranking Recap

The Chinese cities of Shanghai and Beijing, supported by SE Asias Bangkok and HCMC appear to be
the best opportunities for luxury gateway market entry
City Illustrative opportunity rating Illustrative yield rating Ease to implement Total (max. 30) Ranking
Bangkok 6 9 8 23 3
Beijing 10 10 5 25 2
Ho Chi Minh City 2 91 7 18 4
Hong Kong 5 5 5 15 6
London 6 51 2 13 9=
New York 6 6 2 14 7=
Paris 5 6 2 13 9=
Shanghai 10 8 9 27 1
Singapore 2 7 8 17 5
Tokyo 3 3 8 14 7=

Illustrative opportunity Based on the forecast increase in international demand to 2018, assuming constant occupancy and no increase in penetration of hotels
rating
Note: Rating 10 = high, 1 = low. 1. Proxy based on construction cost and local market knowledge

Dated 9 June 2008
Organic: Gateway Cities Ranking Opportunity Recap

The top 6 cities in the ranking represent attractive options for Client X which should be pursued to
provide good regional coverage

City Rank
All top 6 cities represent attractive and interesting
Shanghai 1 options for Client X to operate hotels in based on
illustrative opportunity, yield and ability to implement,
Beijing 2 The long term goal must remain to have properties in
each of the top 6 cities to provide strong regional
Bangkok 3 coverage across key gateway cities.
Ranking suggests an ideal order based on perfect
Ho Chi Minh City 4 market situation. However given pragmatic realities, it
may not be possible to approach the cities in this order
Singapore 5 and Client X will need to opportunistic as to which
options are achievable in what order
Hong Kong 6
New York 7=
Tokyo 7=
London 9=
Paris 9=

Dated 9 June 2008
Agenda
1. Approach
3. Sector analysis
Overview
Organic
M&A
Overview
Majority stake corporate targets
Strategic partnership targets
Iconic property targets
6. Next steps
Dated 9 June 2008
M&A: Overview of M&A Options

Deloitte have analysed 4 majority stake corporate targets, 8 minority acquisition targets and 4 iconic
property targets
Majority
Majority stake
stake corporate
corporate targets
targets Strategic
Strategic partnership
partnership targets
targets Iconic
Iconic property
property acquisition
acquisition
Existing properties:
Aman deal with DLF

now believed to be
complete. Unlikely to
be able to take
majority stake
Development opportunity:

Dated 9 June 2008
M&A: Illustrative Time-line

It is vital that any approach to potential targets is fully thought out and a strategy formulated before
the target is contacted
Months
Task 0 6 12 18
Evaluation of appropriateness of M&A strategy
Client X is still at the very
- Determine Client X's overall vision and strategy early stages of an M&A
- Determine capacity to invest process. No final decision
on targets can be made at
- Determine aim of M&A strategy (operations, brand, growth)
this stage,
- Evaluate the type of potential M&A targets
Plan M&A
- Appoint management team
- Appoint advisors
- Complete targeting and acquisitions search and analysis
- Formulate an approach strategy
- Agree a preliminary view on valuation and financial structuring Approach only takes
Execution place after careful
planning
- Approach the target using top level contacts
- Initial discussions and determining targets requirements
- Obtaining and analysing targets management information
- Financial due diligence and commercial due diligence
- Negotiations & completion
Post merger integration
- Integrate management teams
- Execute growth strategy
Dated 9 June 2008
M&A: Key Success Factors of M&A Transactions

M&A transactions are difficult to execute. Key success factors differ from deal to deal. However, the
following represent some of the key success factors for most deals.
The timing of any acquisition significantly effects acquisition prices.

Completing M&A deals in the current market is extremely challenging unless the acquirer is
Timing
Timing
willing to pay a significant premium above quoted market values.
In order to justify any M&A transaction you need to be able to show how the transaction will
Value-added
Value-added generate value for the combined new entity / group. For example, providing access to new
markets or providing investment capital for expansion,
The acquirer will need to be able to demonstrate the capacity to do the deal. This includes
Capacity
Capacity to
to do
do deal
deal
securing both the necessary debt and equity requirements.
The acquirer needs to understand the needs of the vendor, i.e. Whats in it for me in order
Understanding the vendor to be able to present a proposition they will be interested in discussing. For example, is the
vendor looking to exit the business completely, are they looking to expand, etc.
The acquirer and the vendor will need to be able to work together in order to successfully
Chemistry
Chemistry complete a transaction. This is even more important when the vendor has an ongoing interest
in the company (e.g. Joint Venture)

Dated 9 June 2008
Agenda
1. Approach
3. Sector analysis
Overview
Organic
M&A
Overview
6. Next steps
Dated 9 June 2008
Majority Stake: Potential Deal Structures

In order to perform a majority acquisition Client X will require significant investment capital and be
willing to pay in excess of current market prices
Majority acquisition on own Majority acquisition with real estate partner
Client X acquires more than 50% of the target company and therefore Client X acquires the target together with a partner. Subsequent to the
Description acquires brands, operations and real estate transaction the real estate is spun off into a propco.
Examples: Competitor A, Competitor D, Competitor E and Competitor C Examples Prince Alwaleed & Four Seasons
Significant investment capital A partner interested in acquiring the real-estate and wanting to partner with
Requirements Client X. In the short to medium term the partner would need to be Samsung
Required to pay 20% - 30% more than current market prices
related (until Client X proves themselves).
Complete control of transaction Significantly reduces acquisition costs for Client X as it acquires operations
only
Acquisition of proven brands and operations
Pros Provides base for future growth if partner continues to invest in real-estate of
Fastest method of expansion new developments
Partner can have real-estate or development expertise
If target is listed Client X will be required to make an offer for 100% of the No real estate appreciation for Client X
equity of the target as a result of most stock exchange regulations
Cons Will need to pay a significant premium over current market prices in order to
Will need to pay a significant premium over current market prices in order to secure majority control.
secure majority control.
Dated 9 June 2008
Majority Stake: Screening Long List of Potential Targets

4 Luxury/Upper Upscale companies were identified as potential majority stake acquisitions
Luxury
Luxury // Upper
Upper Upscale
Upscale Upscale
Upscale // Mid
Mid Market
Market
Long
Long List
List of
of
targets 36 38
targets
Minimum Investment Criteria
Targets
Targets
meeting
meeting
minimum
minimum 8 9
investment
investment
criteria
criteria
Value Creation Criteria
Short
Short list
list of
of Client X has indicated
4 5
targets they do not wish to
targets
pursue a mid-market
M&A strategy
Note: (1) enterprise values is c.$1bn or less; (2) Based on targets brand equity, operational experience and geographical presence in focus countries/cities

Dated 9 June 2008
Majority Stake: Alternative Strategies for Engaging Identified Targets

Client X is restricted to a minority or JV investment unless it is able to increase the funds available
for investment.
1
Possibility of a majority acquisition is Unlikely to be a possibility as recently Unlikely to be a possibility unless Client
unknown until approach is made. acquired by DLF who have significant X has access to over $1bn for
Majority Will require the payment of a significant expansion plans. investment. The Hunt family and Maritz
premium. Wolff each own 50% and therefore both
investment
would need to be bought out.
Will need to observe stock exchange
rules (offer to acquire 100% of stock)
Possibility of JV acquisition is unknown This is unlikely to be a possibility as DLF This is a possibility, however, Client X
but likely to be challenging given that have significant funds available for would still need to have access to c.
Joint Banyan is a listed company with a large investment (dont need investment $0.5bn+.
number of investors. partner) and already have a presence in Client X would need to demonstrate the
Venture
Client X would need to prove value-add. Asia Pacific. value it would add to an M&A deal (e.g.
expansion in Asia).
Banyan is a listed investment therefore This is unlikely to be a possibility as DLF Possibility of a minority investment is
minority investment can be acquired have significant funds available for unknown until an approach is made.
through purchasing on the open market investment (dont need investment Client X would need to demonstrate the
or through off-market purchases from partner) and already have a presence in value it would add to an M&A deal (e.g.
Minority significant investors. Asia Pacific. expansion in Asia).
investment Price premium can be limited by careful Client X would need to demonstrate the
planning of open market acquisitions. value it could add to the deal.
Stock exchange rules require disclosure
of interests in excess of thresholds (e.g.
5%)
Note: Morgans has not been included in the above analysis and Client X indicated they do not consider it to be an attractive target. 1. DLF believed to have completed deal to acquire
controlling interest in Aman Resorts group
Dated 9 June 2008
Majority Stake: Acquisition Target (1/4)

Aman resorts HQ: Haryana, India
Portfolio Overview Ownership and Share Price

100% Resorts Significant shareholders: DLF limited, Adrian Zecha
Operating Model: Total # of Hotels # of New Hotels Enterprise value band: c.$400m (last transaction value)
Key executives: Adrian Zecha
Share Price: N/A
Owned
Hotels: 18 existing
Rooms: 806
Number of Employees: N/A Number of New Hotels Total Number of Hotels
Key Performance Indicators

Geographical Distribution Brand Distribution
07 06
% of # of hotels % of # of rooms
Occupancy Rate
ADR $778
Other1 RevPAR
Thailand Return on Capital Employed
Philippines
Cambodia Return on Equity
Bora Bora
Bhutan Aman EBITDA Margin
India
Profitability Revenue, EBITDA (US$ million)
Sri Lanka
09E 08E 07 06 05 04 03 02
Indonesia Revenue
EBITDA
Note: 1. France (1), Morocco(1), U.S.(1), Turkey (1)


Dated 9 June 2008

HQ: Singapore, Singapore

82% Resorts Significant shareholders: Ho Kwon Ping (36.5%), Chiang See
Ngoh Claire (36.5%)
Operating Model: Total # of Hotels # of New Hotels
Enterprise value band: c.1$bn (current) - c.1.6$bn (June 2007)
Key executives: Ho Kwon Ping, Ariel P Vera, Chiang See Ngoh
1997 Asian Claire
Financial
Managed Crisis
Share Price:
3.0
Share price (S$)

Owned
2.5
2.0
Hotels: 23 existing & 49 pipeline 1.5
Rooms: 2,330 1.0
Number of Employees: 7,068 Number of New Hotels Total Number of Hotels 0.5
Sep 06 Jan 07 May 07 Sep 07 Jan 08

07 06
Occupancy Rate 67% 63%
ADR $ 235 $ 215
Indonesia
Angsana RevPAR $ 157 $ 135
APAC other1
Return on Capital Employed 10% 15%
Location A
Banyan Return on Equity 18.8% 9.9%
Other2 Tree EBITDA Margin 29.0% 33.2%
Maldives Profitability Revenue, EBITDA (US$ million)

Laguna 09E 08E 07 06 05 04 03 02
Thailand
Revenue 396.8 309.5 280.2 211.1 112.6 159.4
EBITDA 124.0 93.0 81.3 70.1 20.9
Note: 1. India(1), Sri Lanka(1), Laos(1); 2. Seychelles(1), Morocco(1), Australia(1), Bahrain(1); 3. Data on shaded area not available as Banyan Tree went public in only June 2006
Source: Deloitte Research & Analysis, CIMB Report, Yahoo Finance

Dated 9 June 2008

HQ: New York, NY

36% Resorts Significant shareholders: Morgan Stanley & Co (17.66%), Fidelity
Management & Research (14.78%), Blackrock Advisors (6.38%)
Enterprise value band: $1.2bn (current) - $1.4bn (June 2007)
Key executives: David Hamamoto (Chairman), Fred J.Kleisner
(CEO), Richard Szymanski (CFO)
JV Share Price
Owned
30
Share price (US$)

25
Went public
20 in February
2006
Hotels: 12 existing & 6 pipeline
15
Rooms: 6,800
Number of Employees: 1,9501 Number of New Hotels Total Number of Hotels 10
Jan 04 Jan 05 Jan 06 Jan 07 Jan 08

07 06
Occupancy Rate 80.1% 77%
ADR $ 396 $ 319
Scottsdale Hard Rock
San Fran. Shore Club RevPAR $ 317 $ 246
L.A. Sanderson Return on Capital Employed 3% 7%
Las Vegas St.Martins Return on Equity -9% -10%
London Clift
Hudson EBITDA Margin 35.1% 30.5%
Delano Profitability Revenue, EBITDA (US$ million)
Miami
Royalton
Morgans 09E 08E 07 06 05 04 03 02
New York Revenue 389.0 345.6 323.0 278.6 260.4
Mondrian
EBITDA 149.3 111.7 113.2 85.1 79.5
Note: 1. As of December 31, 2006 does not include employees of joint venture restaurants
Source: Deloitte Research & Analysis, Yahoo Finance, Oppenheimer

Dated 9 June 2008

HQ: Dallas, Texas, United States

55% Resorts Significant shareholders: Hunt family (50%) and Maritz, Wolff &
Operating Model: Total # of Hotels # of New Hotels Company (50%)
Enterprise value band: c.1$bn+
Key executives: John Scott (President & CEO), Susan Aldrige
Owned (SVP & General Counsel), Bob Boulogne(COO), Jim Brackensick
Managed (SVP Purchasing), George Fong (SVP Architecture & Design),
Ernest Glidden (SVP Finanace), Alex Alt (Diretor- Development
& Strategy), Sheri Line (HR Director)
Hotels: 17 existing & 6 pipeline Share Price: N/A
Rooms: 1,939
Number of Employees: c.5,000 Number of New Hotels Total Number of Hotels

07 06
Occupancy Rate
King Pacific ADR
Tokyo San Ysidro
Middle East
Cordevalle
Jumby Bay
RevPAR
Anasazi
Peachtree Las Ventanas Return on Capital Employed
Caribbean Seiyo Ginza
Caneel Bay Return on Equity
Latin Al Khozoma
America EBITDA Margin
Carlyle
Al Faisaliah Profitability Revenue, EBITDA (US$ million)
North 09E 08E 07 06 05 04 03 02
America Rosewood
Revenue 350
EBITDA
Note: 1. Five hotels including Rosewood Corniche, Rosewood Mansion on Turtle Creek, Rosewood Crescent Hotel, Rosewood Little Dix Bay, Rosewood Mayakoba

Dated 9 June 2008
Agenda
1. Approach
3. Sector analysis
Overview
Organic
M&A
Overview
6. Next steps
Dated 9 June 2008
Strategic Partnership: Investment Plan

A strategic partnership investment plan would allow Client X to acquire an immediate stake in the
target with a view of acquiring a majority stake at a later stage
Deal description
Client X enters into a strategic partnership with a

target whereby value is created for both partners:
Client X acquires a minority share (10% - 20%) in
the target company and negotiates a position on the
board.
Client X transfers management of its existing
hotels to the target company in exchange for the
target investing repositioning capex.
Client X co-invests in real estate of new hotel
developments that bear the brand of the target.
Client X helps source the opportunities using
Samsungs muscle/contacts/network/own customer
base of it's employees
Client X will be well positioned to acquire a majority
stake if the opportunity presents itself in future years.
Pros Cons
Opportunity to acquire an immediate stake in target (with minimum Only have minority interest in target therefore have limited control over its
premium) and positions Client X well to acquire a majority stake in the direction and strategy.
future.
Value generated by improved performance at existing Client X hotels as a Risk of losing control of Client X Brand.
result of access to targets platform and operational excellence.
Opportunity remains to expand Client X brand (e.g. co-brand with target Potential negative impact on shareholders view of the value of the
where it makes sense. company (i.e. no longer runs its own hotels).
Client X ideally positioned invest in prime hotel real estate projects.

Dated 9 June 2008
Strategic Partnership: Screening Long List of Potential Targets

Eight Luxury/Upper Upscale companies were identified as potential minority stake acquisitions
Long
Long List
List of
of
targets
targets
Within Client X investment capacity(1)
Targets
Targets within
within
Client
Client X 20
investment
investment hotels
capacity
capacity
Brand fit with Client X(2)
Short
Short list
list of
of 9
targets
targets hotels
Note: (1) required investment to obtain a 10% interest must be less than $300m; (2) Client X fits within target brands and M&A transaction likely to generate value

Dated 9 June 2008
Strategic Partnership: Potential Targets
HQ: Singapore
82% Resorts Significant shareholders: Ho Kwon Ping (36.5%), Chiang See
Ngoh Claire (36.5%)
Enterprise value band: c.1$bn (current) - c.1.6$bn (June 2007)
Key executives: Ho Kwon Ping, Ariel P Vera, Chiang See Ngoh
1997 Asian Claire
Financial
Managed Crisis
Share Price:
Owned 3.0
Share price (S$)

2.5
2.0
Hotels: 23 existing & 49 pipeline 1.5
Rooms: 2,330 1.0
Number of Employees: 7,068 Number of New Hotels Total Number of Hotels 0.5
Sep 06 Jan 07 May 07 Sep 07 Jan 08

07 06
ADR $235 $215
Indonesia
Angsana RevPAR $157 $135
APAC other1
Return on Capital Employed 10% 15%
Location A
Banyan Return on Equity 18.8% 9.9%
Other2 Tree EBITDA Margin 29.0% 33.2%
Maldives Profitability Revenue, EBITDA (US$ million)

Laguna 09E 08E 07 06 05 04 03 02
Thailand
Revenue 396.8 309.5 280.2 211.1 112.6 159.4
EBITDA 124.0 93.0 81.3 70.1 20.9
Note: 1. India(1), Sri Lanka(1), Laos(1); 2. Seychelles(1), Morocco(1), Australia(1), Bahrain(1); 3. Data on shaded area not available as Banyan Tree went public in only June 2006
Source: Deloitte Research & Analysis, CIMB Report, Yahoo Finance

Dated 9 June 2008
HQ: Hong Kong, Location A

Portfolio Overview Ownership and Share Price1
10% Resorts Significant shareholders:
Enterprise value band: $2.5bn (current)
Key executives: Ka Shiu Lo (Chairman of the Board, managing
director) Yiu Wah So (Hotel executive vice president)
Share Price
Owned 40
30
Share price (HK$)

20
Hotels: 10 existing & 4 pipeline 10
Rooms: 5,580
4
Number of Employees: 4,044 Number of New Hotels Total Number of Hotels Jan 04 Jan 05 Jan 06 Jan 07 Jan 08

07 06
ADR $189.8 $169.8
London Eaton
RevPAR $149.4 $133.8
Thailand
Delta Return on Capital Employed1 14.5% 1.92%
Pacific
Return on Equity 1
15.5% 2.0%
EBITDA Margin1 39.7% 37.6%
Americas
Langham Profitability Revenue, EBITDA (US$ million)1
09E 08E 07 06 052 042 03 02
Hong Kong
Revenue 536.1 485.6 452.8 363.5 312.2 329.5
EBITDA 212.6 182.7 1,750 499.0 70.1 94.8
Note: 1. information of Great Eagles Holdings Limited, which owns Langham Hotels International Limited;2. The EBITDA is high due to the large increase in fair value changes on
investment properties

Dated 9 June 2008

0% Resorts Significant shareholders: Jardine Strategic and its subsidiaries
(73.58%)
Key executives: Edouard Ettedgui (Group CEO, Director), John
Leased
Witt (Finance Director)
JV Share Price
Owned
3
Share price (US$)

Managed
Went public
2
in February
2006
Hotels: 21 existing & 18pipeline
1
Rooms: 10,000
03 04 05 06 07 08

07 06
Occupancy Rate 72.1% 72.9%
ADR $ 381 $ 331
Europe RevPAR $ 286 $245
Return on Capital Employed 10.4% 13.8%
Americas Return on Equity 10.1% 8.0%
Mandarin EBITDA Margin 19% 14%
Oriental
Asia1 09E 08E 07 06 05 04 03 02
Revenue 1,007 850.3 815.4 667.3 541.2 547.5
EBITDA 190.2 116.4 124.0 99.0 68.8 78.0
Note: 1. Bangkok, Chiang Mai, Hong Kong (3), Jakarta, Kuala Lumpur, Macau, Manila, Singapore, Tokyo; 2. Data available only for those with significant ownership
Source: Deloitte Research & Analysis, Reuters

Dated 9 June 2008
HQ: Bangkok, Thailand

Ownership and Share Price
61% Resorts Significant shareholders: Minor Corporation Plc. (17%), Minor
Total # of Hotels1 # of New Hotels
Holdings (Thai)Ltd. (17.28%), William E. Heinecke (7.10%)
Operating Model:
Key executives: Michael Sagild
Went Share Price2:
public in
JV 1988
Share price (THB$)

20
Owned
18
16
14
Rooms: 2,654
Number of Employees: c.18,000 12
Number of New Hotels Total Number of Hotels Jan 08 Feb 08 Mar 08 Apr 08 May 08

07 06
Naladhu
ADR US$ 307 US$ 215
Location B Bodu Hura
Serendib
Sri Lanka Sigiriya RevPAR US$ 196 US$ 142
Club Dolphin Harbour View
Maldives Anantara Return on Capital Employed3 9.2% 7.1%
Four Seasons Return on Equity3 18% 18%

EBITDA Margin3 21% 21%
Profitability Revenue4, EBITDA (US$ million)
Thailand
Competitor 09E 08E 07 06 05 04 03 02
C
Revenue 216 201 193 123
EBITDA 47 42 40 26
Note: 1. Data unavailable for one JV hotel; 2. Available data only; 3. Data of entire group; 4. Data of hotel operations only
Source: Deloitte Research & Analysis, The Stock Exchange of Thailand

Dated 9 June 2008
HQ: New York, NY

36% Resorts Significant shareholders: Morgan Stanley & Co (17.66%), Fidelity
Management & Research (14.78%), Blackrock Advisors (6.38%)
Enterprise value band: $1.2bn (current) - $1.4bn (June 2007)
Key executives: David Hamamoto (Chairman), Fred J.Kleisner
(CEO), Richard Szymanski (CFO)
JV Share Price
Owned
30
Share price (US$)

25
Went public
20 in February
2006
15
Rooms: 6,800

07 06
Occupancy Rate 80.1% 77%
ADR $ 396 $ 319
Scottsdale Hard Rock
San Fran. Shore Club RevPAR $ 317 $ 246
L.A. Sanderson Return on Capital Employed 3% 7%
Las Vegas St.Martins Return on Equity -9% -10%
London Clift
Hudson EBITDA Margin 35.1% 30.5%
Delano
Miami Profitability Revenue, EBITDA (US$ million)
Royalton
Morgans 09E 08E 07 06 05 04 03 02
New York Revenue 389.0 345.6 323.0 278.6 260.4
Mondrian
EBITDA 149.3 111.7 113.2 85.1 79.5
Note: 1. As of December 31, 2006 does not include employees of joint venture restaurants
Source: Deloitte Research & Analysis, Yahoo Finance, Oppenheimer

Dated 9 June 2008

Portfolio Overview Ownership and Share Price1
11% Resorts Significant shareholders: Bermuda Trust Company Limited (55%),
The Mikado Prviate Trust (50%), Bermuda Trust (Cayman)
Limited (30.6%), Acorn Holdings Corporation (29.6%)
Key executives: The Hon.Sir Michael Kadoorie (Chairman),
Clement King Man Kwok (CEO)
Owned Share Price 20
Share price (HK$)

15
10
Rooms: 2,874 5
Number of Employees: Number of New Hotels Total Number of Hotels 3


07 06
Quail ADR $465 $369

Manila Lodge RevPAR $316 $266
Tokyo
Return on Capital Employed 5.5% 6.0%
Bangkok
Return on Equity 16.2% 12.0%
Location A EBITDA Margin 33% 34.2%
Peninsula
US 09E 08E 07 06 05 04 03 02
Revenue 582 479 421 400 323 332
EBITDA 192.1 163.8 139.8 127.4 93.3 95.8
Source: Deloitte Research & Analysis, Company website

Dated 9 June 2008
HQ: Dallas, Texas, United States

55% Resorts Significant shareholders: Hunt family (50%) and Maritz, Wolff &
Operating Model: Total # of Hotels # of New Hotels Company (50%)
Enterprise value band: c.1$bn+
Key executives: John Scott (President & CEO), Susan Aldrige
Owned (SVP & General Counsel), Bob Boulogne(COO), Jim Brackensick
Managed (SVP Purchasing), George Fong (SVP Architecture & Design),
Ernest Glidden (SVP Finanace), Alex Alt (Diretor- Development
& Strategy), Sheri Line (HR Director)
Hotels: 17 existing & 6 pipeline Share Price: N/A
Rooms: 1,939
Number of Employees: c.5,000 Number of New Hotels Total Number of Hotels

07 06
Occupancy Rate
King Pacific ADR
Tokyo San Ysidro
Cordevalle RevPAR
Middle East Jumby Bay
Anasazi
Peachtree Las Ventanas Return on Capital Employed
Caribbean Seiyo Ginza
Caneel Bay Return on Equity
Latin Al Khozoma
America EBITDA Margin
Carlyle
Al Faisaliah Profitability Revenue, EBITDA (US$ million)
North
09E 08E 07 06 05 04 03 02
America Rosewood
Revenue 350
EBITDA
Note: 1. Five hotels including Rosewood Corniche, Rosewood Mansion on Turtle Creek, Rosewood Crescent Hotel, Rosewood Little Dix Bay, Rosewood Mayakoba

Dated 9 June 2008
HQ: Hong Kong

14% Resorts Significant shareholders: Kerry Group Limited3 (49.6%),
JPMorgan Chase & Co.(5.0%)
Enterprise value band: US$9.9bn
Key executives: Khoon Ean Kuok (Chairman), Khoon Loong Kuok
(President and CEO), Man Shing Lui (Deputy Chairman)
Managed
Share Price
Share price (HK$)

Owned 25
20
Hotels:52 15
Rooms: 20,299 10
Number of Employees: 29,6001 Number of New Hotels Total Number of Hotels Jan 04 Jan 05 Jan 06 Jan 07 Jan 08

Geographical Distribution Brand Distribution2
07 06
Other2 ADR $152 $135
Other Asia
Thailand Traders RevPAR $105 $96
Philippines Singapore Return on Capital Employed 14.0% 11.6%
Malaysia Return on Equity 9.5% 7.1%
EBITDA Margin 39.2% 34.9%
Location A Shangri-La
(inc Hong
Kong) 09E 08E 07 06 05 04 03 02
Revenue 1,219 1,003 842 726 540
EBITDA 478 350 265
Note: 1. Headcount of all the groups managed hotels and resorts; 2. Includes brands of managed hotels; 3. Owned by the Kuok family
Source: Deloitte Research & Analysis, Company website, Yahoo Finance

Dated 9 June 2008
HQ: Singapore
15% Resorts Total # of Hotels2 # of New Hotels
Significant shareholders: DBS Nominees Pte Ltd(16.05%), C Y
Operating Model: Wee & Co Pte Ltd (13.25%), Wee Investments Pte Ltd (10.12%),
Tye Hua Nominees Pte Ltd (9.34%), Citibank Nominees
Singapore Pte Ltd (7.14%)
Owned
Enterprise value band: US$3bn +
Managed
Acquired Pan Pacific in 2007 for US$4.3 million
Key executives: Wee Cho Yaw (Chairman), Gwee Lian Kheng

Hotels: 28 (Group President and CEO)
Rooms: 9,646
Number of Employees: 1,1051 Number of New Hotels Total Number of Hotels

07 06
Occupancy Rate 75%
Novotel
ADR
Australia Crowne Plaza
Sofitel RevPAR
North Sheraton
America4 Return on Capital Employed
Parkroyal Return on Equity 19% 11%
EBITDA Margin
Asia 3
Pan pacific
09E 08E 07 06 05 04 03 02
Revenue 474 381 304 273 267
EBITDA
Note: 1. In Singapore only; 2. As of Dece0ber 31, 2007; 3. Singapore (4), Location D(3), Malaysia(3), Location B(3), Thailand(1), Indonesia(1), Philippines(1), Bangladesh(1),
Myanmar(1), Location B(1), Location A(1); 4. Canada(3), US(2)
Source: Deloitte Research & Analysis, company website

Dated 9 June 2008
Agenda
1. Approach
3. Sector analysis
Overview
Organic
M&A
Overview
6. Next steps
Dated 9 June 2008
Iconic M&A: Iconic Property Approach

Whilst acquiring an iconic property is a proven approach, it is not currently viable for Client X.
However Client X could acquire a Tier 2 iconic property
Proven
Proven approach
approach Not
Not viable
viable for
for Client
Client X
X Could
Could acquire
acquire Tier
Tier 2
The strategy of buying a truly iconic However, this would appear not to be a There are a number of 2nd tier iconic
property and then building a portfolio viable approach for Client X: properties in Asia that with the right
using the name of this property as the investment and approach could form
brand has been popular in the recent All the truly iconic properties around the part of the organic development
past globe are either part of corporate groups strategy:
or owned by individuals embarking on a
similar strategy
Dorchester Collection Accelerates the increase in the portfolio
Langham
If one was available it is likely that the
Le Crillon Could bring platform and management
valuation would consume most of the
Plaza Athenee experience if independently owned
$1bn investment capital leaving very
Raffles little to fund the growth programme
Waldorf = Astoria Could bring guests as often property
more well known than operator
The high valuation is likely to reduce the
yield to below 4%
Competition for assets is with sovereign

wealth funds who are investing for
national good not just financial returns

Dated 9 June 2008
Iconic M&A: Gateway Cities Ranking Opportunity Recap

The top 6 cities in the ranking represent attractive options for Client X which should be pursued to
provide good regional coverage

Market entry strategy based on insight from local

City Rank from phase 2 Potential timeline
THL experts and identified opportunities
Shanghai 1 New build Year 3
Beijing 2 New build Year 4
Bangkok 3 Acquire existing hotel or new build Year 2
Ho Chi Minh City 4 New build Year 5
Singapore 5 Acquire existing hotel or convert Year 1
Hong Kong 6 Acquire existing hotel or convert Year 6
New York 7= Acquire existing hotel Medium to long term
Tokyo 7= Acquire existing hotel or convert Medium to long term
London 9= Acquire existing hotel or convert Medium to long term
Paris 9= Acquire existing hotel Medium to long term

Dated 9 June 2008
Iconic M&A: Acquisition Target (1/4)

HQ: Hong Kong, Location A1
Overview
Ownership
Market Position: Luxury
Significant shareholders: HKR International, Payson Cha.
Location: Bangkok, Thailand
Management
Rooms: 210
General Manager Duncan Palmer who previously managed
Built: 1988 two hotels for The Savoy Group. Prior to that he spent twelve
Remodeled in: 2007 years in senior management roles with the Mandarin Oriental
Dining: 7 restaurants & 1 bar Hotel Group
Conference/Banquets: 17 meeting rooms & 2 ballrooms Key Performance Indicators
Spa: Yes 07 occupancy rate: 71%
Other: Squash and tennis courts
Awards
Ranked 8th in Asia for Overseas Leisure Hotels and 10th for
Overseas Business Hotels in the Conde Nast 2003 Readers
Travel Awards
Best business hotel in Thailand by Business Asia Thailand
Note: 1. Headquarters of HKR International


Dated 9 June 2008
Overview
Ownership
Significant shareholders: Ng family
Location: Singapore
Managed by: Sino Group of Hotels
Rooms: 400
Opened: January, 2001
Built in: 1928
Dining: 4 restaurants & 1 bar
Conference/Banquets: 7 meeting rooms & 3 ballrooms
Spa: Yes
Other: The straits room and roof garden
Redevelopment
Acquired by Sino Land Company Ltd from Urban Redevelopment
Authority with US$72.9 million (S$100million) in 1997.
Renovation to convert the historic building into a hotel and
development of 1 Fullerton commercial complex cost US$291.5
million (S$400million) and opened in 2001.
Awards
2008, 2007: Conde Nast Traveller Gold List Hotel
July 2007: Leading Hotels in the World in Travel & Leisures
Worlds Best Awards
October 2006: Ranked #1 in Asia by Conde Nast Traveller

Dated 9 June 2008
Iconic M&A: Acquisition Target (3/4), Conversion Opportunity

HQ: Singapore
Overview
Ownership
Market Position: A fully member-oriented club
Owned by the National Parks Board of Singapore
Location: Singapore
Leased by: The Legends Fort Canning Park Pte.Ltd., which is
Managed by: Owners owned by: Ms.Goh Min Yen (Executive Chairman daughter
Rooms: None of Mr. Goh Eng Wah), Mr. Oh Chee Eng (CEO), Mr.Goh Eng
Built: 1926 Wah (founder of Eng Wah Organisation)
Remodeled in: 2002 The family is also behind listed cinema operator Eng Wah
Organisation
Dining: 4 restaurants & 2 bars
Conference/Banquets: 8 function rooms & 1 ballroom
Management
Spa: Yes Mr. Oh Chee Eng (CEO), Mr.Herbert M. Hofer (GM)
Other: Tennis courts, members lounge, card rooms
Acquired
The National Parks Board granted the new owners with a 30-
year lease on the 11,148 sq m site for SGD85 million in 2002
Affiliation
Members attain access to The Legends Golf & Country
Resort in South Carolina, US

Dated 9 June 2008

HQ: Hong Kong, Location A1
Overview
Ownership
Significant shareholders: HKR International, Payson Cha
Location: Sentosa, Singapore
Rooms: 215
07 Occupancy rate: 68%
Opened: 1991 as The Beaufort Hotel
Renamed in: 2002 as Sentosa Resorts & Spa
Dining: Two restaurants & two bars
Conference/Banquets: 24 meeting rooms & 3 ballrooms
Spa: Yes
Other: Golf club, Seven Eden Wellnes Centre
Relaunch
Previously known as the Beaufort Singapore, it was renamed
as The Sentosa Resort & Spa after a US$10 million
upgrading of the property.
This includes Singapores first destination spa, Spa Botanica
Sentosas branding strategy is to align itself closely to the
destination in which it is located and to earn itself an
independent identify
Note: 1. Headquarters of HKR International


Dated 9 June 2008
Agenda
1. Approach
3. Sector analysis
Foundation stage
Growth stage
Financial implications
6. Next steps

Dated 9 June 2008
Selected Strategy: Key Decision Making Questions

There are 4 key questions that Client X needs to answer that will help determine which strategy to
chose
Question Organic (inc. potential property Strategic partnership

acquisition)
1. Is your vision to be a hotel and brand operator? If yes, then need to follow an organic growth Possible in long term if able to purchase a
strategy majority stake
2. Are you willing to recruit an external CX team inc: If yes, then possible to follow an organic growth If no, Client X will have to pursue strategic
strategy partnership as the risk of failure in organic
- Provide them with autonomy? will be very high given current management
experience
- Provide them with a commensurate package?
- Provide suitable incentives, inc. equity?
- Incorporate and HQ the company outside
Location Y?
3. What is your risk appetite? Requires appetite to be high given uncertainty of Require lower risk as investment in
organic development established company
4. What is your investment capability? Investment capability will determine the approach Level of investment will determine the scale
either pure organic or accelerated growth via of company that can be invested in and the
property acquisitions and therefore the level of amount of control within that company
returns Additionally will determine how much
further investment is available for sliver
equity in real estate development, and
therefore how attractive to a strategic
partner Client X will be

Dated 9 June 2008
Selected Strategy: Strategic Options Overview

Deloitte are suggesting an initial 2 dual track strategy for c. 3 months to determine which route is
going to fit with Client X objectives and provide the best option longer term
Strategic Partnership
Initial exploration of potential for strategic partnership
ip with luxury hotel company
n ersh
art Estimated timeline of c. 3 months to know whether or
gi cP not this option will achieve Client X goals
ate
Dual track strategy Str
Client X can initially pursue a dual track
strategy, with key benefits:
Ensure that Client X moves on
Outlay of costs during the initial phase is
minimal
Creates maximum impact in short Organic Development (inc. potential property acquisitions)
timeframe Org
an ic D
Organic development including potential for acquisition
eve of c. 2 properties in key gateway cities
lopm
e nt Initial activity will be low cost and create positive growth
platform even if strategic partnership is deemed
achievable after initial 3 month period

Dated 9 June 2008
Selected Strategy: Roadmap Proposed Approach

Whichever track is followed Client X will need to follow a 3 stage approach. 1. Foundation Stage -
Initial fix of core product; 2. Initial growth stage - lay foundations for growth either via organic
approach (inc. possible acquisition of tier 2 iconic properties) or strategic partnership; 3. Secondary
growth stage which may include full corporate M&A
1. Foundation Stage
Recruit CX team Fix Division X Brand research Corporate governance activity Based on
pragmatic/
opportunistic
implementation,
Organic Iconic Strategic Partner Corporate activities may
3. Secondary growth stage

2. Initial growth stage
overlap between
New luxury hotel product by Acquisition of well known Investment in minority stake Acquisition of a luxury
within corporate chain corporate chain stages
Greenfield/Brownfield iconic hotel
Includes management of
development, property Icons fall into 2 categories: existing hotels by partner
conversion, lower grade hotel Tier 1 Globally recognised and sliver investment in
upgrade brand future real estate pipeline
May also include reflagging of Tier 2 Locally recognised
luxury property/ies via product based on
architecture, location, Potential to convert strategic
acquisition (overlap with
service, history partnership into full corporate M&A via
corporate)
majority acquisition in longer term

Dated 9 June 2008
Selected Strategy: Key Growth Drivers and Success Factors

The key growth drivers for each strategy is the addition of hotels into Client X portfolio and the level
of investment available. Success is determined by experience within either management or advisors
Option Key Growth Driver(s) Key Success Factors Examples
Organic Growth is going to be driven by number of new properties added Strong and experienced CDO Mandarin
Development to the existing portfolio, either by Greenfield/ Brownfield Availability of locations Oriental
development, conversion or acquisition and upgrading of existing Shangri-La
Efficient development process from origination through to
properties
completion
Size of growth will depend on choice of location (and achievable
RevPAR) along with size of hotel(s) and extra revenue generating Acceleration of ramping period to mature operation
facilities
Choice of location may be based on factors such as forecast
demand and supply, current penetration levels and ease of entry
into market
Iconic Acquisition Availability of locations Value add proposition for acquisition Dorchester
Acquisition of assets to add into Client X portfolio Strong M&A negotiation skills Collection
Ability to execute funds and credit Langham
Speed of completion and integration with Client X
Corporate Availability of targets Timing and approach Four

Acquisition - Type and make up of corporate acquisition Value add proposition for acquisition Seasons
Majority Strong M&A negotiation skills
Price
Availability of equity and credit
Post merger integration activity (e.g. 100 day plan)
Strategic Size of investment Timing and approach Rosewood

Partnership Availability of funds for investment in real estate Rationale for acquisition and WIIFM1 Aman
Rationale could include investment in rollout properties, which would
Impact of brand and operations on Division X
require further capex investment
Effective contract negotiations for matters relating to operations
and leverage of expertise to improve Client X performance
Board seat(s)
Note: 1. Whats in it for me

Dated 9 June 2008
Selected Strategy: Available Funds

The funds available to Client X have a significant impact on the strategies that can be pursued in the
short term, although subject to timing of funds long term all 3 strategies are possible
Funds available Implications
Our understanding of Client X fund availability: Available funding in years 1 and 2 is not enough to
Year 1-2: $300million (Equity and Debt) purchase either a corporate or an iconic property (tier 1 or
2), suggesting that initially only 2 potential options are
Year 3-5: $700million (Equity and Debt)
available:
Year 5+: Unknown 1. Organic growth
2. Strategic partnership
Greater funds may be made available subject to need, but Accessing external funds would require Client X to meet
will require access to external funding sources investment criteria of external sources. This would limit the
ability of Client X to invest in iconic properties that may be
the basis of a rollout, given the low IRR that would be
achieved based on the premium price required
Subject to timing of funding in year 3-5 it may be possible to
follow all 3 strategic options
Note: Renovation funds for Division X are separate that noted above

Dated 9 June 2008
Selected Strategy: Comparison of Strategic Options

Whilst a higher risk option than strategic partnership, organic growth would enable Client X to remain
a hotel operator
Organic (inc. potential property acquisition) Strategic Partnerships
Implementation Risk People High Low
Implementation Risk Investment High Medium/low

$1bn [Yr 1-7] $1bn [Yr 1-7]
Returns IRR 22% [15x] TBD
Recruit CEO and Team Yes ?

Will require hotel real estate asset management expertise
Autonomous hotel business Yes ?

Required to attract top team and enable value creation Subject to specifics of strategic partnership
OpCo/PropCo structure Yes Yes

Maximum flexibility for debt financing and asset value over time Driven by tax benefits
(leverage asset business)
Client X full potential Yes [10/10] R/E = Yes, Ops = No [Yr 1-5]
Minimises investment requirement
Brand awareness Yes Yes

Key criteria for selection of strategic partner
Growth of hotel company will increase power and value of brand
Platform for growth in operations Yes Possibly over longer term subject to JV/majority investment
Brand ownership Yes Own a share of brand, but not direct control
End State in yr 5/10 10/10 10/10

OpCo and PropCo OpCo
Minority Yr1-5
Majority Yr 5 ++
PropCo
4 @ yr 5
10 @ yr10

Dated 9 June 2008
Agenda
1. Approach
3. Sector analysis
Foundation stage
Growth stage
6. Next steps

Dated 9 June 2008
Foundation Stage: Key Recommendations Summary

There are 5 foundation steps that Client X needs to undertake prior to any growth strategy
Category Detail
Experienced both in operational efficiency and growth through development and M&A
1. Recruit experienced CEO
Will recruit CX team particularly COO, CDO and CMO
Separate legal, accounting and reporting entity

2. Create autonomous hotel business
CEO reports to Mr Sung
Real estate requires deep skills to maximise value and challenge operations
3. Create Op Co/Prop Co structure within
Operational focus gravitating towards brand as key driver of shareholder value
hotel business
Enables leverage of PropCo
Improve GOP through operational efficiencies

4. Realise the potential of Division X
Complete refurbishment to global 5 star standards
5. Conduct brand awareness research in Need to ascertain true strength of Client X brand in the identified key markets
AsiaPac Will directly impact nature of growth strategy

Dated 9 June 2008
Foundation Stage: Corporate Governance Ownership Structure

As a subsidiary Client X Company Ltd. can demand the right level of support, continuity and visibility
with adequate independence and autonomy for the growth and expansion strategy with responsibility
for new CX team
Business Unit Subsidiary Spin-Off Joint Venture
Client
Samsung
X Corp.. Client X JV
Samsung
Partner
Client X Client X Hotel Co. Ltd.

Current Client X Hotel Co. Ltd.
Client X
CEO Divisions
CEO
Current
Client X
Divisions CDO CFO CMO COO CDO CFO CMO COO
Client X reports to Client X board Client X reports to Client X CEO Client X is a separate legal entity but Client X reports to Client X board and JV
Description
reports to a Client X Corp entity Partner
Simple structure Gives hotel development visibility Indicates the importance and scale of Gives clear indication of the importance
the strategy and scale of the strategy
No change to current operations and Simplifies hierarchy by having Client X
management of group report only into the CEO Provides clear governance: source of Might have positive market buy-in by
funding, responsibility and ownership of linking of iconic M&A activity to JV
Smooth transition Dotted line allows for sharing of strategy Partner
information, co-ordination and
Pros consistency of Client X brand name Provides dual sources of resources such
as funding / budgeting
Gives flexibility in choosing operating
model (OpCo/PropCo etc.)
Gives flexibility in expanding to different
locations
Insufficient visibility and support for Need to manage relationship with Client Restructuring needed to shift current Restructuring needed to shift current
building a luxury hotel portfolio X board although they are not officially hotel portfolio into new structure hotel portfolio into new structure
linked to Client X
Need for more structure in case of multi- Need for co-ordination when using Client Divides governance between JV Partner
Cons market and multi-hotel expansion Need to ensure that visibility with CEO X name across the business units and Client X
provides the necessary support an
Harder to maintain Client X brand
relays the importance of the growth
consistency with separation of portfolio
strategy regardless of option: organic or
M&A
Note: Current Client X Divisions: Duty Free, Fitness / Direct Sales, New Business, Management Administration, Strategy, Internal Audit
Source: Hotels Magazine; Deloitte Research & Analysis

Dated 9 June 2008
Foundation Stage: Corporate Governance Operating Model

An OpCo/PropCo operating model can give Client X Company Ltd. the structure needed for long term
and sustainable growth and expansion but local tax considerations are paramount
External Sale and Leaseback
OpCo / PropCo OpCo / PropCo Joint Venture
(S&LB)
Assets
Property Investor
Rent
EBITDA
Hotel Client X
Co. Ltd.
Involves Client X. disposing of commercial property for its fair Client X. would transfer commercial property to a new subsidiary Client X. would transfer commercial property to a new subsidiary
market value and immediately taking a long lease back from (PropCo) for its fair market value. PropCo services the debt using (PropCo) for its fair market value. PropCo sells equity to a JV
Description the purchaser. Client X. would retain operational control for rental received from the operating company (OpCo). Client X Co. partner. Third parties can contribute cash, skills etc., while Client
the duration of the lease would retain operational control and, via the PropCo, property X. Would retain operational control and, via the PropCo, property
equity upside equity upside
Crystallise value leveraging any differential between Retain ownership of property and capital appreciation upside Retain interest in property; capture residual value
corporate and property valuations
Retain operational control Retain operational control
Cash available to de-gear/distribute/re-invest etc.
Reduce WACC Benefit from third party expertise, cash etc.
Pros Lease payments should be less than debt interest
Independent exits for OpCo and PropCo Reduce WACC and any development risk
Retain operational control of the hotel portfolio
Independent exits for OpCo and PropCo JV
Reduce WACC and financial risk
Loss of freehold interest in favour of lease Possible arbitrage - property/corporate valuations Possible arbitrage - property/corporate valuations
Loss of capital appreciation upside Only a portion of property assets investment value is realised Only a portion of property assets investment value is realised
(dependent on gearing) dependent on gearing
Increased operational gearing
Cons Highly geared structure with banking covenants over both OpCo Highly geared structure with banking covenants over both OpCo
and PropCo and PropCo JV
Full banking and property due diligence required Shareholder agreement to regulate JV relationship
Full banking and property due diligence required
Not viable for a long term growth strategy regardless of option: Can be used for iconic M&A, corporate M&A and hybrid growth Can be used for organic growth option in order to gain that third
Impact -
organic, iconic M&A, corporate M&A, hybrid options where third party skill and experience is already assumed party investment and expertise while mitigating risk
Growth to be gained in the acquiring of these hotels and can also be
Options leveraged for organic hotels

Dated 9 June 2008
Foundation Stage: Corporate Governance Organisational Structure

Whichever strategic option is chosen, the high-level organisation structure remains the same, but the
roles within the structure vary as will the consequent job description
CEO
Executive Development Finance Sales & Marketing Operations

Management (CDO) (CFO) (CMO) (COO)
Project
Product Investment & Communications & Organisational
Development & Finance Sales Technology
Development Strategic Planning PR Effectiveness
Area of Construction
responsibility
Real Estate Marketing
Construction of hotels including external space Coordinate budgeting process Determine brand architecture, brand plan Allow for seamless processes throughout hotel
portfolio through use of technology
Refurbishments and renovations Define purchasing strategy and policies in order Build relationships with and develop insight into
Option A: to obtain synergies and cost efficiency customers (end users / intermediaries) Supply chain / inventory management
Take strategic direction from Brand
Organic Investment approval CAPEX, ROI Analyse competitor information Run hotels within brand expectations
Take budget direction from Finance
Manage promotions, pricing and distribution
Responsible for real estate management
Maintain facilities and standard of brand Drive development capability for M&A Determine how to use iconic brand (reverse Maintain level of operations
branding)
Option B: Hotel refurbishments / renovations Investment approval CAPEX Run hotel within brand expectations
Leverage existing relationships with customers
Iconic M&A Coordinate budgeting process, ROI Leverage iconic operations with Client X
(end users / intermediaries)
Assess value of brand and other intangibles
Development economies of scale Drive development capability for M&A Determine brand architecture, brand plan Use and improve on operations from M&A and
Option C: incorporate throughout Client X
Hotel refurbishments / renovations Investment approval CAPEX Leverage existing relationships with customers
Corporate (end users / intermediaries) Run hotel within brand expectations
Direct existing development capability Assess value of brand and other intangibles
M&A
Analyse competitor information
Maintain consistency in constructions, Drive development capability for JVs, M&A and Determine brand architecture, brand plan Allow for seamless processes throughout hotel
refurbishments and renovations throughout managed hotels portfolio through use of technology
Leverage and integrate existing relationships
Client X portfolio
Option D: Coordinate budgeting process with customers (end users / intermediaries) Supply chain / inventory management
Development economies of scale
Hybrid Purchasing economies of scale Analyse competitor information Manage relations with hotel managers
Support development capability
Investment approval CAPEX, ROI Run hotel within brand expectations
Responsible for real estate management
Source: Hotels Magazine; Deloitte Research & Analysis

Dated 9 June 2008
Foundation Stage: Marketing Strategy Brand Strategy

Brand name and architecture formation requires market research to understand cultural name
implications across entry and customer source markets for the strategic options chosen
Keep Separate Names Merge or Link Names Create a New Name Choose One Name
Acquired brand already has a Each brand has unique and Support a repositioning strategy The acquired brand is weak or
strong, established image and complementary values When brand value is not significant narrow
identity The brand is the result of a joint or out of line with target markets The Client X brand adds significant
Client X brand would not add value venture If brand value of purchased hotel value
Reasons to
choose There are potential risks to Client X Each company maintains has significant negative The acquisition is being integrated
brand image by linking to acquired significant ownership in joint connotations into an existing Client X. brand
individual,
linked or new brand venture portfolio
Note:
brand names Example: Example: Example:
Rarely done and requires immense
Mandarin combined
acquired brand spend
with The Oriental
rebranded
Indicative strategy for brand name change on Client X growth and expansion strategy options
n/a n/a If after conducting market research, One corporate name (such as Client X.)
Option A: Client X is regarded as an inappropriate can be utilised in the case of organic
name for international use, option would growth
Organic be to create a new name
Iconic brand name should be kept Iconic brand name can be used for n/a Leverage iconic brand name to Client X
Option B: separate reverse branding of or linking to Division
X e.g. Client X by The Ritz Carlton
Iconic M&A
Perhaps, in order to retain Client X brand Depending on the brand purchased the If after conducting market research, Depending on the brand purchased the
Option C: strength in Location Z Division X and / name can be merged with Client X e.g. Client X / M&A brand are deemed not name can be used for reverse branding
or Jeju names can remain unchanged The Rosewood Client X appropriate names, option would be to of The Client X. Portfolio or vice versa
Corporate M&A create a new name
Iconic brand name should be kept Brand architecture would have to be n/a Iconic brand name can be used for
Option D: separate created to classify the different hotel reverse branding of The Client X.
types within the portfolio Portfolio or vice versa
Hybrid
Note: Brand architecture refers to the collection of brands within a brand portfolio; Choosing of brand name would need to be conducted via focus groups across the gateway cities and
customer source markets

Dated 9 June 2008
Foundation Stage: Marketing Strategy Distribution Strategy

For luxury hotel expansion, there are several direct and indirect distribution channels that must be
efficiently utilised, but use of channels vary by growth option
Option A: Option B: Option C: Option D:

Distribution Strategy
Organic Iconic M&A Corporate M&A Hybrid
Initially the sales force plays an Customers are driven directly to Sales force, website, email and Opportunity to leverage website of
important role in creating this brand telephone would be important iconic brand to cross-sell
awareness and consideration for channels especially when
Sales force, website, email and Re-direct traffic from corporate
the brand convincing customers of the M&A
telephone would be important M&A direct sales channels
impact and/or reverse branding
CRM / sales force As portfolio grows, CRS would be channels especially when
Common sales force, CRM system,
Website one way to have seamless convincing customers of the M&A Integrate Client X into existing CRS
website, email and telephone would
Telephone distribution throughout group impact and/or reverse branding
Direct Use CRS for cross and up selling be channels used to communicate
Walk-ins
Email In the longer term brand recognition Use website of iconic brand to link across Client X. new portfolio with customers on both the M&A
CRS and a larger luxury portfolio should to Client X impact and to advertise new and
Leverage CRM system
drive customers to direct re-branded properties (whether
Leverage CRM system
distribution Train sales force to cross sell through organic growth or corporate
Train sales force to cross sell M&A)
To create awareness in the luxury Leverage GDS to improve Link GDS to internal inventory Leverage the increased importance
space GDS and alliances should be awareness of Client X and/or management systems for efficient of the larger group for existing
formed and leveraged including reverse branding and accurate customer bookings indirect channel relationships as
LHW, GHA etc. previously separately honed by
Other channels have less impact Depending on size of acquired
Client X, the iconic brand, and the
Global distribution Initially promotions should be for an iconic brand but can also be company, leverage existing direct
corporate M&A target
system targeted at travel agencies, tour leveraged to raise awareness of relationships with channels
Indirect Travel agencies operators, e-channels etc. specific Client X and/or reverse branding
Tour operators to the markets
E-channels
Alliances

Dated 9 June 2008
Foundation Stage: Marketing Strategy Promotions Strategy

The reason for executing promotions and the channels used to deliver the promotions differ
depending on organic or M&A strategy
Promotions Option A: Option B: Option C: Option D:

Strategy Organic Iconic M&A Corporate M&A Hybrid
Creating awareness for the brand in gateway city Link existing promotions of Link existing promotions of M&A Link existing promotions of iconic brand
markets for both domestic and international travelers iconic brand to Division X brand to Division X to Division X
Use PR and high marketing budget spend to drive Link existing promotions of Link existing promotions of Division Until re-branded, link promotions of
potential customers directly to website Division X to iconic brand X to M&A brand corporate M&A properties to iconic
brand
Use promotional budget to convince GDS players Use PR that comes from Use PR that comes from M&A to
Promotions
and opinion leaders/trend setters to recommend buying the iconic brand to increase awareness for other luxury Use PR that comes from buying the
objectives
Client X hotels increase awareness for other hotels in Client X portfolio iconic brand and the corporate to
luxury hotels in Client X increase awareness of and create
Use hotel investment, luxury and
portfolio and create positive positive associations between the iconic
luxury THL events as a platform to
association brand and Client X brand
gain market buy-in and approval
Engage indirect distribution network through forming Focus on direct distribution Focus on direct distribution network Focus on direct iconic brand distribution
relationships rather than pricing promotions e.g. network for formulating for formulating promotions network for formulating promotions and
through holding THL and luxury PR events promotions cross-selling
Use combination of ATL (creating
Entice luxury trendsetters to convince the wider Focus on BTL channels for awareness of the new group of Focus on BTL channels for creating
market of the new hotel group creating cross and up selling hotels and management); BTL cross and up selling
channels and CRS (for fostering
Use ATL marketing channels to create awareness Use CRM to determine the Use ATL marketing channels to create
cross and up selling)
Promotions and consideration for the brand (television, luxury segmentation of the customers awareness and consideration for the
channels magazines) and motivation for staying at Use CRM to determine the organic growth properties (television,
iconic brand and at other Client segmentation of the customers and luxury magazines) and its positive
Use emerging channels to promote brand e.g. hotel
X luxury hotels and determine motivation for staying at M&A brand association with the iconic brand
alliances, hospitality complementary alliances (rental
the right type of promotion to and at other Client X luxury hotels
cars, airlines, trains etc)
offer (room, service, and determine the right type of
Apply search engine optimisation; key words such complementary gift, loyalty) promotion to offer (room, service,
as: luxury, [gateway city] etc. bring up Client X complementary gift, loyalty)
hotels
Note: ATL = above the line marketing e.g. mass media campaigns; BTL = below the line marketing e.g. email and word-of-mouth marketing

Dated 9 June 2008
Foundation Stage: Marketing Strategy Pricing Strategy

Price setting, execution and optimisation can vary across the different growth options
Pricing Option A: Option B: Option C: Option D:

Strategy Organic Iconic M&A Corporate M&A Hybrid
Rack rate based on the price points of other recently Understand rack rate of Understand rack rate of competitive Iconic brand rate remains the same; corporate M&A and organic
constructed luxury hotels in close proximity competitive set of hotels in city; set of hotels in city; but most likely brands should be priced consistently across Client X. new
but most likely leave rates leave rates untouched (not advised to portfolio
Assess price reaction of other hotels that might use
untouched (not advised to decrease rates)
Client X market entry as a reason to raise prices Assess price reaction of other hotels that might use Client X
Price Setting1 decrease rates)
resulting in a smaller gap than expected between Link existing CRM data used for market entry as a reason to raise prices resulting in a smaller
lower scale segments and luxury Assess existing CRM data determining segments and rate card gap than expected between lower scale segments and luxury
used for determining segments to existing system for Client X to allow
Use comparative CRM data for determining Link existing M&A CRS and CRM data used for determining
and rate card which might be for cross and up selling
segments and rate card segments and rate card to existing system for Client X and new
leveraged for current Client X
organic hotels to allow for consistency and cross and up selling
portfolio
Carefully construct promotions and distribution Assess and remove any Assess and remove any unnecessary Assess and remove any unnecessary promotions/incentives
frameworks unnecessary promotions/incentives
Use larger portfolio of hotels as bargaining power with indirect
promotions/incentives,
For sales force promote incentives based on distribution
generally not needed for an
Price value/quality of customer
iconic brand Create select arrangements where possible
Execution For indirect sales, promote incentives based less on
Use cross and up selling across hotels as a means of executing
fees and more on actual sale
prices and reducing revenue leakage across Client X.
Systematically use market knowledge and forecast Assess existing pricing and Assess existing pricing and revenue Systematically use market knowledge/historical data and
information for room and services demand planning revenue management management software; and demand forecast information for room and services demand planning
e.g. using competitive rate knowledge to pull software; decide if to replicate planning e.g. using competitive rate knowledge to pull customers by
customers by manipulating price at strategic times within Client X manipulating price at strategic times
Link with CRS, CRM, GDS and
Develop interlinked CRM, GDS and pricing software Assess historical and forecast replicate within Client X Company e.g. Assess existing CRS, pricing and revenue management
Price (revenue/occupancy management) to determine data for demand planning using competitive rate knowledge to software of M&A corporate hotels
optimisation best rates pull customers by manipulating price
Software can seamlessly and automatically produce rates
at strategic times
Software can seamlessly and automatically produce based on minimal manual interpretation (segment, occupancy)
rates with minimal manual interpretation (segment,
occupancy)
Note: Assumes that markets chosen have positive economic forecast e.g. GDP, business index etc. (See analysis from workshops 1 and 2); Existence of
1.
CRS/CRM/software/segmentation etc. is dependent on hotel purchased


Dated 9 June 2008
Agenda
1. Approach
3. Sector analysis
Foundation stage
Growth stage
6. Next steps

Dated 9 June 2008
Growth Stage: Key Recommendations Summary

There are 3 key areas of focus in the initial growth stage (subject to the outcome of the dual track
strategy during the foundation stage)
Strategic
Strategic Partnership
Partnership (subject
(subject to outcome
Organic
Organic Development
Development Tier
Tier 22 Acquisitions
Acquisitions
of
of dual
dual track
track in
in foundation
foundation stage)
stage)
Begin active identification of development Begin active investigations into the identified Implement partnership with hotel company
opportunities in the prioritised Asian gateway 2nd tier iconic properties in Asia identified during foundation stage
cities Probable initial locations Bangkok, Singapore Support development of hotel pipeline:
Both Greenfield/Brownfield and conversion and Hong Kong Financial investment in hotels under
Probable locations Shanghai, Beijing and Research suggests there are no suitable hotel development; and/or
HCMC properties in Shanghai, Beijing or HCMC Support entry of strategic partner into AsiaPac
Issue mandate to advisors region (subject to type of company)
Key benefit of an acquisition strategy is the
acceleration of growth and lower risk of
development
Within 10 years aim to open: Within 8 years aim to open : Within 10 years aim to open :
8 stabilised1 organically developed properties 2 iconic properties and 6 other stabilised 10 properties with minority investment
organically developed properties
Note: 1. New-build properties typically take 2 years from opening to stabilise revenue

Dated 9 June 2008
Growth Stage: Strategic Initiatives Timeline overview

Whilst the initial priority is to get the management team in place, and the main push on organic
development will be done by the new management, there are activities that can start immediately
across all areas
0-3 months 3-6 months 6-12 months 12-24 months 24 months +
Mandate to head-hunters Recruit CEO and additional Additional recruitment of team Recruitment of management
Management
Foundation Stage
team based on CEO if/as required for hotels as required

team requirement
Begin initial operational Research strategic activities, New management team to Continuation of room Question regarding Client X
improvements quick wins e.g. CRM system begin room renovation renovation and operational brand subject to brands
Client X, Implementation of plan aimed excellence plan acquired via M&A activity

Location X at best in class operational
excellence
Recruitment of development Development director tasked Agree contracts Integrate new properties into
Organic Property director (see management with sourcing individual Initiate construction or Client X system
Development team) properties and development conversion activity
sites in Top 5 target locations
Issue mandate to acquire Agree targets and make Complete purchase of 1 (or Complete Post Merger Continued mandate for iconic
Initial growth
Iconic Property iconic property approaches max 2) properties Integration (PMI) activity property acquisitions on an
M&A opportunistic basis, subject to
availability of funding
Issue mandate for strategic Implement strategic Analysis of real estate

partnership partnership (ongoing) opportunities as available with
Appoint CEO with real estate strategic partner
Strategic
expertise
Partnership
Identify and approach targets
Agree terms of partnership
Issue mandate to acquire Agree targets and make Complete purchase of Complete PMI activity, Continued mandate for
Secondary
luxury focused hotel company approaches corporate, subject to market specifically: corporate acquisitions on an
growth
conditions and availability of 1. Leveraging platform for Client opportunistic basis, subject to
Corporate M&A funds X, both operations and S&M) availability of funding
2. Decide on branding and
associated activities
Note: Timing indicative only. Actual timings may vary subject to both internal and external factors

Dated 9 June 2008
Growth Stage: Strategic Partnership Rationale

There are 4 steps in the strategic partnership process that will bind the two organisations together
and ensure that goals are aligned
2. Contribution of Client X owned 3. SP investment in Client X 4. Client X investment in SP

1. Client X investment in SP
properties owned properties pipeline
Client X invests majority of available Client X contributes both Division X Strategic partner to invest in room Remaining Client X capital to be
capital in the equity of the strategic and Client X Jeju to be managed by refurbishment of Client X properties invested in strategic partners real
partner the strategic partner Enables upgrading of rooms and estate pipeline on a preferential
Own stake in operating company, Provides gateway location not in repositioning to meet requirements basis
but not be an operator per se existing distribution network/portfolio of strategic partners brand Client X to provide (Samsung)
Reduces capital investment contacts to support development
requirement for Client X in own activity and provide opportunities
property, freeing up capital for either Strategic partner to have proven
investment in larger share of equity track record of successful
in strategic partner (see 1) or future development, thereby reducing the
pipeline (see 2) development risk
Client X to do due diligence on case
by case basis prior to investment in
property
Source: Deloitte analysis

Dated 9 June 2008
Growth Stage: Strategic Partnership Company Focus

Depending on whether Client X decided to partner with an AsiaPac focused company or not will
impact both the share available for Client Xs investment capacity and the story (rationale) for the
approach
AsiaPac Dominant Non-AsiaPac Dominant
Hotel company with no or limited number of properties in Asia

Hotel company with dominant focus on Asia Pacific region
Definition (Examples) Pacific region
E.g. Shangri-La, Mandarin Oriental, Peninsula
E.g. Rosewood, Morgans
Client X to leverage contacts in Asia Pacific region for growth

Client X to leverage brand strength in Asia Pacific region
Strategic Rationale pipeline
Greater immediate impact on Client X properties
Provide experience of Asia Pacific to management team
c. <10% for initial $300m investment, with no capital for sliver

Potential Share investment in real estate
20% + for initial investment of $300m
Low
High
Client X impact Given already substantial scale, Client X would have a small impact
Significant interest/impact as players are of smaller scale
on the organisation

Dated 9 June 2008
Growth Stage: Strategic Partnership Timeline

If a strategic partnership is to be pursued, most of the actions are front loaded in first year
Indicative Timeline
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Foundation Stage Fix Division X Expansion (ongoing)

Corporate Governance Transfer Leverage contacts to find development opportunities
management of Invest sliver equity in real estate on an ongoing, pragmatic basis
Create autonomous
existing hotels
hotel business
Repositioning spend
Create OpCo /
on hotels
PropCo structure
Majority Acquisition
M&A Activity
Target companies for To be considered, subject to:
investment Financial returns Growth opportunities
Acquire minority Ability to buy/willingness to sell Value add proposition
stake View on brand strength Capacity to fund deal
Organisational Capability / Requirement

Stage 1: Initial activity Stage 2: Expansion Stage 3: Acquisition
M&A Target and investment skills Individual development to assist target with development Capability should be acquired with majority stake.
activity and act as a link to Samsung
Contract negotiation for repositioning Critical to ensure key individuals are retained within the
business
Real estate management expertise
Note: Buying a minority investment in a company will provide limited control over the growth strategy of that company, even with a board seat. Therefore the management contract model,
segment extension and alternate models are not a choice that Client X will be able to make and therefore not covered here

Dated 9 June 2008
Growth Stage: Potential JV Structure

Based around the strategic partnership option, it may be possible to create a JV with the partner
company and invest sliver equity in PropCo
Example JV Structure
Indicative
License fee Strategic Partner

CRM
Transfer of operations people
Client X CRS
Royalties Other functions
TBD
Sliver equity % control % control

Royalties (tax)
JV OpCo
JV PropCo Operations
Viable Development Key issues:
Who invests? Brand Asia-Pacific Hotel Critical to understand how
Marketing value is realised, e.g. IPO
Asia-Pacific Hotel
Asia-Pacific Hotel There must be firm structures
? in place to manage dispute
Asia-Pacific Hotel
resolution
External Asia-Pacific Hotel
investors? Division X

Dated 9 June 2008
Growth Stage: Implications of Activities

Given the volatility and uncertainty in the current market, Client X should reduce the risk of following
a single growth strategy by leveraging different growth accelerators on a pragmatic basis
Accelerator Strategic Partnership Iconic Properties Corporate M&A
Description Start search for partnership, with Looking for assets to buy, with an aim Watching brief for corporate M&A on
anticipation of achievability within 3 for 2 properties, subject to available an opportunistic basis, subject to
months funds available funds
Impact on If strategic partner is found, a decision Brand of iconic property will depend on Choice regarding development pipeline,
Brand will need to be made as to whether to terms negotiated during acquisition either:
rebrand the existing portfolio or remain process and strength of brand Branded as corporate M&A target; or
separate Organic pipeline may then either be Client X and organically developed
branded iconic or Client X properties maintained as separate
Impact on Any organic development pipeline that Accelerates development, with Initially instigated development activity
Development has been initiated may be leveraged by properties open sooner than under pure can be added to the pipeline of the
the strategic partner subject to organic corporate target
negotiation and alignment with partners Organic pipeline develops in parallel Development strategy to be aligned,
strategy specifically around target cities
Given the volatility and uncertainty in the current market, it is too risky to bet growth strategy on just strategic partnership, iconic or
corporate acquisition. Therefore the strategy should initially be to establish foundations (outlined previously) and plan to grow
organically in 6 cities, supported by the accelerators on a pragmatic basis. The organic development activity will support each
accelerator, whichever is successful over the longer term

Dated 9 June 2008
Agenda
1. Approach
3. Sector analysis
Foundation stage
Growth stage
6. Next steps

Dated 9 June 2008
Financial Profile: Organic Roll-out Plan

Client X can add eight stabilised hotels to its portfolio within the next ten years
Roll-out Plan (2009-18)

Based on Prioritised Target Cities, Ability to Implement, and Investment Capacity Available to Client X
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Organic Growth Strategy

New-build 305 rooms in Shanghai
New build 516 rooms in Beijing
New build 384 rooms in Bangkok
New build 375 rooms in Ho Chi Minh
New build 478 rooms in Singapore
New build 463 rooms in Hong Kong
Organic and Acquisition Growth Strategy

Acquisition 478 rooms in Singapore
Acquisition 384 rooms in Bangkok
New build 375 rooms in Ho Chi Minh
New build 463 rooms in Hong Kong
Note: The figures presented are strictly illustrative and based on a broad range of assumptions.
It is assumed that it takes two years for new-build hotels to stabilise Hotel under Construction Hotel Opened

Dated 9 June 2008
Financial Profile: Organic Roll-out Key Assumptions

Based on the following key assumptions, we have calculated the financial impact of the two roll-out
scenarios
Key Assumptions
Indicative
Assumption Detail
Interest Rates Based on applicable interest rates for target countries
Construction Period 18 months, with 60% of costs in second half
Construction Costs by Country Based on Davis Langdon & Seah, with land costs assumed at an additional 20%
Debt to Equity Share 50/50
Ramp-up (until stabilised) 2 years
Profitability by City Hotel Benchmark bespoke profitability survey less estimated fixed charges and provision for renewals at 4%
Head Office Costs $3m in year 1, growing to $10m by year 4
Acquisition of Existing Asset Estimated at 17.5x EBITDA
Number of Rooms per Hotel Based on average of Hotel Benchmark bespoke profitability survey sample
Note: The figures presented are strictly illustrative and based on a broad range of assumptions

Dated 9 June 2008
Financial Profile: Development Costs Organic

Construction costs are phased over 18 months, which gives the roll-out scenario highest costs in
year 6 at $300m. Total cumulative development costs are c. $900m over the period
Development Costs (2009-18)

USDm
Cumulative Costs: 23.9m 85.8m 190.3m 385.4m 684.8m 856.1m 892.6m 892.6m 892.6m
Construction Costs Land Costs

Dated 9 June 2008
Financial Profile: Development Costs Combined

A combined organic and acquisition strategy has cumulative development costs of c. $1bn
Development Costs (2009-18)

USDm
Cumulative Costs: 276.6m 535.5m 635.0m 831.4m 1002.7m 1039.3m 1039.3m 1039.3m 1039.3m
Construction Costs Land Costs Acquisition Costs

Dated 9 June 2008
Financial Profile: Cashflow Organic

The suggested roll-out strategy will utilise $1bn of invested capital by year 8. Assuming no further
development, Client X could become cash generative by year 9
Cashflow (2009-18)
USDm
Cashflow Cumulative Cashflow

Dated 9 June 2008
Financial Profile: Cashflow Organic and Acquisition

A combined organic and acquisition strategy will require more up-front capital investment
Cashflow (2009-18)
USDm
Cashflow Cumulative Cashflow

Dated 9 June 2008
Financial Profile: Illustrative IRR

Both the organic and combined approaches could yield favourable IRR. A combined approach offers
lower risks but at relatively lower yields
IRR Assuming Exit in Year 10

Illustrative
Higher organic IRR reflects risk to reward balance as Client X would
Assumed EBITDA
Organic Combined benefit from return on development risk compared to accelerating the
Exit Multiple
development process by buying an existing mature property
15x 30% 20%
17.5x 34% 23%
20x 37% 26%

Dated 9 June 2008
Agenda
1. Approach
3. Sector analysis
6. Next steps

Dated 9 June 2008
Next Steps: Project Activity and Implementation

There are a number of next steps Client X should undertake to fast track the implementation of
whichever strategy is pursued
Fast
Fast Track
Track Implementation
Implementation Process
Process
Identification and recruitment of CEO
Creation of new corporate structure (autonomous hotel

business)
Creation of new operating model (OpCo / PropCo)
subject to tax benefits
Client X brand awareness research in key Asian markets
Start building land bank for development
Decision on M&A approach

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Development of Growth &

Expansion Strategy for Client X.

2 2008 Deloitte & Touche LLP. Private and confidential

Outline of the Project

3 2008 Deloitte & Touche LLP. Private and confidential

4 2008 Deloitte & Touche LLP. Private and confidential

Industry Overview: The Shareholder Value Model

Business model Emerging markets

Technology Human assets

5 2008 Deloitte & Touche LLP. Private and confidential

Industry Overview: Operating Models

Degree of volatility1 based

Mid- Upper Low High

Level of market segment

6 2008 Deloitte & Touche LLP. Private and confidential

Industry Overview: Organisational Structures

Regional Global / Functional Brand-centric Portfolio

Source: Deloitte Analysis

7 2008 Deloitte & Touche LLP. Private and confidential

Industry Overview: Demand & Supply Global

Many deals already

Total international visitor

Growth in branded rooms

8 2008 Deloitte & Touche LLP. Private and confidential

Domestic and International Trips by Country (2007)

9 2008 Deloitte & Touche LLP. Private and confidential

Industry Overview: Demand & Supply Domestic Trips

Domestic Business and Leisure Trips (2007)

10 2008 Deloitte & Touche LLP. Private and confidential

Industry Overview: Demand & Supply Asia-Pacific

Total Demand Growth vs. Branded Room Supply Growth (2007-09)

Growth in branded rooms

2007 Total number of

11 2008 Deloitte & Touche LLP. Private and confidential

Industry Overview: Demand & Supply Penetration of Room Supply

12 2008 Deloitte & Touche LLP. Private and confidential

Industry Overview: Demand & Supply UK Penetration in AP (1/2)

Asia-Pacific Additional Hotel Rooms at UK penetration (2007) 1

13 2008 Deloitte & Touche LLP. Private and confidential

Industry Overview: Demand & Supply UK Penetration in AP (2/2)

Asia-Pacific Additional Hotel Rooms at UK penetration (2010) 1

14 2008 Deloitte & Touche LLP. Private and confidential

Industry Overview: Demand & Supply US Penetration in AP

15 2008 Deloitte & Touche LLP. Private and confidential

Industry Overview: Demand & Supply Room Penetration

16 2008 Deloitte & Touche LLP. Private and confidential

Branded Supply by Chain Scale (2007)

17 2008 Deloitte & Touche LLP. Private and confidential

Industry Overview: Demand & Supply Upper Upscale / Luxury Valuation

Upper Upscale / Luxury Valuation per Key (2006)

18 2008 Deloitte & Touche LLP. Private and confidential

Industry Overview: Global Hotel Operators Overview

Competitor A Competitor B Competitor C Competitor D Competitor E

Source: Deloitte Research and Analysis

19 2008 Deloitte & Touche LLP. Private and confidential

Industry Overview: Global Hotel Operators Financial Summary

Financial Results and Key Performance Indicators (2007)

Competitor A Competitor B Competitor C Competitor E Competitor D

Total Revenue, $m 1,768 4,360 4,415 6,153 11,132

Market Cap, $m 4,470 3,864 12,777 10,469 15,837

EV / EBITDA 10.5x 5.7x 12.0x 11.4x 9.2x

P/E 12.0x 10.3x 18.8x 19.8x 11.9x

Return on capital invested1, % 17 9 25 13 13.6

Key Performance Indicators2