Smith Travel Research (STR) Third Quarter 2006 News Release

Smith Travel Research (STR) announced third quarter and September year-to-date 2006 results for the U.S. lodging industry today.

Industry occupancy declined to 68.5 percent in the three months ending September 2006, down 0.7 percent versus third quarter 2005. Third quarter average room rate gained 6.8 percent to $97.43 and revenue per available room (RevPAR) --- the combination of occupancy and average room rate and a key industry productivity measure --- increased 6.0 percent to $66.71.

In the first nine months of 2006, industry occupancy improved 1.0 percent to 65.2 percent versus same period last year. Average room rate rose 6.8 percent to $96.90 and RevPAR gained 7.9 percent to $63.14. September YTD industry room supply increased 0.4 percent while demand (room nights sold) grew 1.5 percent. Room revenue increased 8.4 percent in the first nine months of 2006 to $77 billion.

In the month of September 2006, occupancy fell 1.3 percent to 65.1 percent while average room rate improved 6.7 percent to $97.66. September REVPAR rose 5.4 percent to $63.61. September’s occupancy decline is partially attributable to difficult prior year comps related to Hurricane Katrina.

“September year-to-date industry performance was good, though RevPar growth slowed in the third quarter compared with the first half of this year”, said Mark Lomanno, President of Smith Travel Research. “In fourth quarter 2005, the industry enjoyed the highest fourth quarter RevPar growth since STR began tracking data in 1987. We do not anticipate 2006 fourth quarter RevPar growth will equal last year’s record. Room supply growth should increase through the balance of this year and into 2007 but remain below the long term growth trend of just over 2 percent. Demand growth should continue in the fourth quarter but likely at a slower pace than last year. We forecast full year 2006 RevPar growth at 7.9 percent”, Lomanno added.

Smith Travel Research --- the recognized leader in lodging industry tracking and analysis --- provides regular industry reporting to all major North American chains. The company also provides daily performance reporting through its DaySTAR program and hotel profit and loss benchmarking through its annual HOST Study.