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Interactive Q&A: Mitchell Presnick, Chairman & Chief Executive Officer, Super 8 Hotels (China)

Mitch,

Thank you very much for the recommendation. I find this to be a very interesting subject. The more I research the more I realize my initial assumptions are totally wrong. You have really clarified a lot of questions for me. Are there any other resources that you would suggest I look into?

Thanks...

Interactive Q&A: Mitchell Presnick, Chairman & Chief Executive Officer, Super 8 Hotels (China)

Thank you Mitch for the comprehensive feedback. The VIP card is an interesting tidbit. Besides the implementation of your loyalty program are there any other strategic initiatives that will be put into place to create brand awareness in the minds of Chinese consumer? Moreover, who is your target audience? I have seen companies like Starbucks target a more younger demo with the hopes of indoctrinating them into the "Starbucks Way".

Futhermore, could you talk a bit about your observations regarding Western companies establishing themselves in China? I'm curious to hear about your thoughts with respect to the strategic challenges facing companies looking to enter and develop within China.

Interactive Q&A: Mitchell Presnick, Chairman & Chief Executive Officer, Super 8 Hotels (China)

Hello Mitch,

Thanks again for taking the time out to chat with us. I just wanted to comment on a couple of thoughts which your shared with us yesterday. I was hoping that you could elucidate a bite more for us.

You had mentioned to David that in 2004 when Super 8 launched that the properties were undermanaged and unprofitable. What do you think were the key drivers for the undermanaged and unprofitable performance during that stage of Super 8's development?

Secondly, you mentioned to Liudy that Super 8 is directly operating properties in China, alongside our franchised properties and that this approach was not being utilized in the US. How much strategic tailoring has Super 8 had to conduct within the Chinese market in order to gain traction within China? Moreover, do you believe this approach will be more successful as opposed to a standardize approach employed by other multinationals?

Futhermore, you mentioned difficulty penetrating the 3000+ town & country markets. What factors do you believe contribute to this? And what strategic approach do you believe will be successful in reducing this barrier to entry.

Finally, why do you think Chinese investors have a better understanding of the US market as opposed to US investors of the Chinese market? Do you think it's the Chinese - holistic view vs the American - individualistic approach? I say this because it always seems to baffle me when 'in my view'... it appears the US multinational are not conducting a rigorous due diligence process pertaining to investing within the Chinese market. Or is the Chinese market too fragmented to obtain a clear understanding of all the variables that effect the marketplace?

Thanks in advance for your feedback.

Interactive Q&A: Mitchell Presnick, Chairman & Chief Executive Officer, Super 8 Hotels (China)

Thank you for taking the time out of your schedule to chat with us Mr. Presnick. My first question piggy backs Liudy with regards to expansion strategy. Do you believe you can garner more growth buy expanding into secord tier markets? 1st tier? or a combinations of both?