From Hogg Robinson Group

6 August 2009

HRG UNVEILS 2009 SIX MONTH HOTEL SURVEY

Part 1: Overview

The international hotel market is still feeling the effects of the tough economic climate
according to the bi-annual hotel survey conducted by Hogg Robinson Group (HRG), the
international corporate travel services company. Most regions are experiencing a decline in
hotel room rates in local currency terms, with Abu Dhabi the only exception, recording
average room rate growth of 5% in local currency. With occupancy levels continuing to fall
and rates reduced, corporates continue to consolidate their travel policies and negotiate
more favourable corporate deals.

Trends noted by HRG include:

 Moscow once again tops the chart as the most expensive destination for corporate
travellers. However, for the first time since the city entered the HRG hotel survey in 2005,
the rate saw a year on year decline (-14%)

 Abu Dhabi is now in second place and is the only city in the survey to have achieved
average rate growth of 5% in real terms when measured in local currency

 London has seen a 4% decline in average rate in the first six months of 2009, down from
the 3% growth over the same period last year. As a result the city has once again failed to
make the top 10, dropping from 16th to 23rd place

 Average rates increased in the Americas by 15% and rose marginally in Western Europe
thanks to the strength of the US Dollar and Euro against the pound. However, when
exchange rates are factored in, both regions recorded substantial average rate falls

 The top end of the market is holding up well, with the highest average rate increase seen in
5 star hotels (7.7%)

1
From Hogg Robinson Group

Margaret Bowler, Director of Global Hotel Relations at HRG, says: “The shift in business practices
has been substantial and those that adapt well can reap benefits from the unusual trading
environment. Hotels are adopting sensible pricing in order to maintain current occupancy levels.
Our clients still want to travel and we are helping them find the best and most effective ways to cut
costs, identifying alternative travel options to help manage and reduce corporate travel budgets”.

The results show that corporates are travelling smarter as they look to control travel costs and
maximise their return on travel expenditure. HRG has witnessed corporates continually reviewing
and consolidating their programmes to secure lower hotel rates by delivering increased revenues to
their preferred suppliers.

In addition to lower pricing, corporates have been able to negotiate added-value items within their
rates such as food and beverage discounts, free Wi-Fi access and reduced parking charges.
Significantly, last room availability (LRA) is now considered by many as standard, having only been
available at a premium prior to the slowdown in the market. However, as hotels are still managing to
achieve high occupancy levels in certain cities and at peak times of the year, HRG continues to
advise clients to renegotiate favourable deals on a regular basis, ensuring adequate allocation in
high volume locations.

In some countries in the Middle East, demand continues to outstrip supply in many cities and the
majority of investment at the top end of the market is supporting continued rate increases.

HRG’s interim survey is based on a combination of industry intelligence, actual room nights booked
and rates paid by its UK clients during January to June 2009 compared to the same period in 2008.

The GBP exchange rate is based on the average for the period 1 January to 30 June 2009 versus
the average during the same period in 2008 (data source www.oanda.com)

2
From Hogg Robinson Group

Part 2: In depth analysis

Top 10 most expensive cities worldwide: 2008 v 2009

2008
2009 Average 2009 Average 2008 Average 2008 Average Variance
Variance Ranking In
City Room Rate Room Rate Room Rate Room Rate In Local
In GBP Local
GBP Local Currency GBP Local Currency Currency
Currency

Moscow £268.11 RUB 13,263 £312.92 RUB 14,796 -10% -14% 1

Abu Dhabi £253.36 AED 1,390.22 £183.33 AED 1,330.32 5% 38% 7

Paris £203.46 € 227.55 £199.50 € 257.73 -12% 2% 3

New York City £200.21 $299.01 £197.99 $391.07 -24% 1% 5

Milan £191.28 EUR 213.93 £196.00 EUR 253.20 -16% -2% 4

Geneva £188.74 CHF 317.85 £183.13 CHF 379.91 -16% 3% 6

Hong Kong £183.15 HKD 2,120.67 £167.63 HKD 2,581.81 -18% 9% 13

Dubai £182.84 AED 1,003.23 £180.95 AED 1,313.05 -24% 1% 8

Copenhagen £181.70 DKK 1,514.40 £173.77 DKK 1,673.99 -10% 5% 11

Rome £179.49 EUR 200.74 £179.01 EUR 231.25 -13% 0% 12

Key European cities have continued to dominate the top 10, but once again Moscow has witnessed
the highest average room rate despite an average rate fall when measured in both local currency
and GBP. This can largely be attributed to a fall in demand from within the banking and finance
sectors, combined with an increase in supply from new openings in recent years.

Moscow may soon lose its title to Abu Dhabi, which entered the top 10 most expensive cities for the
first time in the 2008 six month survey. Neighbouring Dubai has continued to suffer from a fall in
demand from the banking and finance sector, coupled with an exodus of expatriate and migrant

3
From Hogg Robinson Group

workers due to the slowdown in the country’s expansion programme. As a result, it has seen one of
the largest rate decreases (24%) over the period.

Mumbai, India’s financial hub, was the star performer from the region in 2008, but has since
dropped out of the top 10, falling to 16th position, partly as a result of the terrorist attacks that took
place last November.

Top 5 average rate rises/decreases: January – June 2009

2009 6 Month 6 Month

6 Month 6 Month
Average Variance 2009 Average Variance
City Variance City Variance
Room Local Room Rate Local
GBP GBP
Rate Currency Currency

Abu Dhabi £253.36 38% 5% Warsaw £102.14 -14% -5%

Tokyo £174.17 24% -15% Moscow £268.11 -14% -10%
Houston £126.83 20% -9% Liverpool £85.59 -14% -14%
Shanghai £141.22 13% -17% Mumbai £169.19 -16% -23%
Frankfurt £177.90 11% -16% Belfast £92.79 -17% -17%

Following substantial growth in 2008, Abu Dhabi has again seen average room rate increases of
38% in GBP, demonstrating demand for hotel accommodation in the city particularly from the
banking and finance sectors, as well as ongoing development and refurbishment programmes.

Despite Poland being the only EU country to record GDP growth this year 1 , Warsaw’s hotel market
has still seen a decline in rates, demonstrating that it is not immune from the decrease in room
rates seen across Eastern Europe.

The 14% fall in average rate in Liverpool is due to the fact that hoteliers inflated rates in 2008 as the
city enjoyed its status as European Capital of Culture. The number of new openings that catered for
this event has meant that demand is now out of kilter with supply.

1
0.4 percent growth in Q1 2009 in a quarter-on-quarter comparison (Central Statistics Bureau)

4
From Hogg Robinson Group

Quarterly average room rates 2008 v 2009 in local currency

Q1 2008 Q1 2009 Q1 Q2 2008 Q2 2009 Q2

City
Average Rate Average Rate Variance Average Rate Average Rate Variance

London £148.72 £154.20 -4% £160.76 £155.49 -3%

New York City $369.76 $296.99 -20% $408.80 $299.98 -27%
Paris € 245.97 € 228.14 -7% € 264.55 € 226.95 -14%
Zurich CHF 365.70 CHF 295.95 -19% CHF 398.35 CHF 289.67 -27%
Hong Kong HKD 2,641.52 HKD 2,206.56 -16% HKD 2,557.06 HKD 1,954.22 -24%
Madrid € 184.50 € 163.34 -11% € 184.22 € 155.51 -16%
Amsterdam € 208.20 € 179.76 -14% € 227.67 € 182.11 -20%
Dublin € 163.97 € 131.83 -20% € 171.27 € 130.86 -24%
Brussels € 190.58 € 180.01 -6% € 201.62 € 171.58 -15%
Frankfurt € 205.38 € 198.23 -3% € 206.54 € 198.82 -4%
Stockholm 2,090.10 kr 1,960.78 kr -6% 2,283.21 kr 1,985.19 kr -13%
Johannesburg ZAR 1,887.03 ZAR 1,861.53 -1% ZAR 1,858.91 ZAR 1,732.82 -7%

Without exception, all cities saw average rates decline in both quarters, with half of those surveyed
experiencing consecutive double digit falls. Second quarter rates were noticeably lower with an
average rate decrease of 16% compared to 10.5% in the first quarter, demonstrating the continued
slowing in the global hotel market.

London has seen a slight increase in demand in response to the weakness in sterling, making it a
popular destination for companies travelling to Europe for business. London is the only key global
city from the above list to see a slower decline in the second quarter compared to quarter one.
Major events in London such as Wimbledon and Ascot provided the demand to allow dynamic
pricing to push up rates.

5
From Hogg Robinson Group

Average room rate increases by region: 2008 v 2009

£
2
5
0

2
0
0
8
2
0
0
9
£
2
0
0
£
1
5
0
£
1
0
0
£
5
0
£
0

U
K

E
u
r
o
p
e

E
a
s
t
e
r
n

A
m
e
r
i
c
a
s

A
s
P
a
c

M
E
W
A

A
f
r
i
c
a
E
u
r
o
p
e

When measured in GBP, HRG’s data showed that - with the exception of the UK and Eastern
Europe - the global hotel market has shown modest growth over the last six months, with exchange
rates playing a major part. Indeed for the Eurozone, which had an average exchange rate of
1.12 euros to the Pound during the period, UK corporates ‘paying’ in sterling are still seeing a rise in
average rates at hotels in a number of EU countries, despite weak local market conditions.

Eastern Europe has declined substantially over the period reversing a trend that has been in place
for a number of years. This is not just as a result of the declines in Moscow but also across a
number of cities in the region including Warsaw, Prague and Bucharest.

The newest banking and finance sector hubs in Middle East & West Asia (MEWA) have delivered
strong performances, leading to 15.6% regional growth. Cities that have seen average rate
increases include Doha (37%), Manama (35%), Riyadh (26%) and Muscat (17%). The limited
supply of hotels, primarily dominating the top end of the market, combined with high demand and
upgrades of existing hotels in the region, have forced prices upwards. The region is also reflecting
the continued strength of the luxury sector (see page 7).

6
From Hogg Robinson Group

The Americas continued to report rate growth albeit helped by a relatively strong Dollar exchange
rate versus the Pound.

Africa has reported a good performance, signalling its position as a rapidly emerging market
enjoying significant investment from multinational organisations engaged in the oil & gas, banking &
finance and telecoms industries in particular.

Global hotel star ratings – 2008 v 2009

£
2
5
0
£
2
0
0
£
1
5
0

2
0
0
8
2
0
0
9
£
1
0
0
£
5
0
£
0

B
u
d
g
e
t

3
S
t
a
r

4
S
t
a
r

5
S
t
a
r

Hotels are battling to maintain their share of the corporate market as clients downgrade star ratings.
Average rates have decreased in the 3 and 4 star markets as a result.

Surprisingly, the highest average rate increase of 7.7% has been seen in 5 star hotels, suggesting
hoteliers are holding out for rates at the expense of lower occupancy levels. This sector has
performed particularly well in the MEWA and AsPac regions, where these properties are prevalent
and increasing.

HRG’s data continues to suggest that overall the budget sector is feeling the competition from the 3
and 4 star hotels. It has been squeezed due to its inability to respond more rapidly and at short
notice in terms of flexible pricing to offer more competitive rates to suit market needs. The
introduction of new mid-market brands into key European cities continues, benefiting the 4 star
sector and providing greater diversity and choice for the business traveller.

7
From Hogg Robinson Group

Country focus: UK

Average room rates 2008 vs 2009

2009 Average 2008 Average

City Variance 2009 Variance 2008
Room Rate Room Rate

London £151.96 £157.69 -4% 2%

Edinburgh £92.61 £97.40 -5% -2%
Birmingham £87.77 £94.40 -7% 0%
Manchester £94.53 £103.22 -8% -3%
Leeds £83.72 £89.07 -6% 2%
Glasgow £84.17 £95.00 -11% 3%
Bristol £91.59 £96.74 -5% -5%
Heathrow Airport £101.11 £103.93 -3% -3%
Liverpool £85.59 £99.95 -14% 9%
Cardiff £77.90 £85.09 -8% 0%
Newcastle Upon Tyne £95.35 £100.91 -6% 0%
Belfast £92.79 £112.11 -17% 5%

All key UK cities recorded decreasing average room rates during the first six months of the year.
London fared marginally better than the provincial markets, as visitors enjoyed the weakness of the
Pound against the US Dollar and Euro.

Edinburgh, the largest financial centre in the UK outside London, continued to see falling rates
potentially as a result of events in the banking and finance sector and also due to new hotel
openings both in and on the outskirts of the city. Similarly, Leeds has seen rates fall by 6% on
average due to oversupply.

However, aggressive pricing strategies and continued expansion and competition from the 3 star
market is likely to result in a decrease in average rates over the next period.

8
From Hogg Robinson Group

Part 3: Summary

“As forecast at the start of the year in our 2008 annual hotel survey, mid-year results have shown
that the international hotel market is continuing to see average hotel rates fall in many regions. The
latest figures suggest that the industry has some way to go before rates stabilise. With all key global
cities recording rate declines in both quarters, London was the only city where decline slowed
marginally”, says Margaret Bowler.

“Despite the overall downturn in rates across the board, the industry is doing a great job of
restructuring and adapting to the market conditions. The hotel industry appears to have learnt its
lesson from the last downturn. They are adjusting pricing structures to meet market expectations
and to make rates appear more attractive. In turn, corporates are reviewing and consolidating their
programmes to secure lower rates because there is more availability. However, as shown in the
global hotel star rating analysis, many hoteliers do not want to throw away their share of the market
with significant price cuts so they are taking a sensible long-term strategy to hold out for rates at the
expense of lower occupancy levels.”

Margaret Bowler concludes: “The market is incredibly difficult to predict, but in light of the economic
climate, and consistently unfavourable exchange rates, we know that more businesses are looking
at ways to control travel expenditure. At HRG, we advise clients to take advantage of the current
conditions and use these to consolidate travel policies and negotiate better rates”.

- Ends-

For further information, please contact:

Sallyanne Heywood/Katy Carmen Veronica Rossini/Rowan Usher

Hogg Robinson Group Euro RSCG Biss Lancaster
Tel: +44 (0) 1256 312600 Tel: +44 (0) 207 467 9200
Email: sallyanne.heywood@hrgworldwide.com Email: blhrg@bisslancaster.com

9
From Hogg Robinson Group

Notes to Editors:

Hogg Robinson Group plc (HRG), the award-winning international corporate travel services
company was established in 1845 and operates from headquarters in Basingstoke, Hampshire, UK.
Its interests include owned or controlled corporate travel services operations in 25 key driver/growth
markets throughout Europe, North America and Asia Pacific, which are supported by a network of
contracted partners. The HRG network extends to nearly 120 countries.

HRG’s philosophy is to focus on its clients, underpinned by three differentiators – its people, its
technology and its breadth of service. The company has experienced management and skilled
operators together with a strong reputation for technology which it develops and owns in-house. In
addition HRG is the only major travel management company to offer a real breadth and depth of
services, all of which combine to serve every client around the globe delivering value, cost savings,
efficiency and innovation, without compromise.

HRG’s portfolio of clients spans a broad range of industry sectors including but not limited to
Automotive, Banking and Finance, Food Manufacturing, Media and Entertainment, Pharmaceutical,
Retail and Telecommunications.

10