Catch the Momentum

If you choose not to act, you have taken a dramatic action.

Ah…Life at the Network.

45 Minutes to…

Status of ABCN and “the World”

Status of our Competitors (Regus)

Identify the ‘next big things’– Create total Industry

Transparency– Turn your numbers

‘upside down’• Monetize our

companies.

So, hang on. It’s a wild ride!

You can only see the ‘tip’

8,000 CentersAsia is aheadEurope is catching upUK has too much $$NA is consolidatingLatin America is …?

“0” net center growth – Landlord exchange

“0” Growth…seems wrong!

“Follow the leader”

There is WS growth

Artificial “High”

Real Growth this year.– Consolidation effect

• Supports pricing

VO, the new – old thing

What does the future look like?

It’s looking really good…

ABCN 600 centers, 35 countries– 15% external growth– 10% internal growth– 1,000 centers, 50 countries, 24 months

Regus 750 centers, 50 countries– 15% overall growth– 1,000 centers, 50 countries, 24 months

What will the outcome be?

Only two real players globally

Only two able to serve the ‘corporates’

Only two able to impact market pricing

Only two able to ‘create’ new products

Only two able to ‘establish standards’

Only two able to extend their brands

Is RGU is ‘friend or foe’?

Competitors or Colleagues?

Are we going to be constructive or destructive forces?

What can we do together if we all band together at ABCN/SON?

What should we do with Regus?– Anything?

Where is Regus’ focus and where should ours be?

Regus – WS GROWTH and top line– Acquisitions at 30% arbitrage– More centralization

• UK Staff all fired last week…same ‘old’ central staff takes over.

ABCN/SON – WS Growth, new products…“bottom line”.– Faster, leaner model that is

fully distributed.– Limited capital, limited

commitment by Members • Must change for success

How will ABCN/SON succeed?

Commit to common goals

Establish standards

Get rid of ‘the box’…

Here’s where we will concentrate…

The Next “BIG” Thing

“Industry Transparency”

We don’t need no stinking WEB BROKERS…or do we?

Sometimes you’re the windshield..

.…Sometimes you’re the bug!.

What is “transparency”?

You need to ‘see everything’ in one place– All parties• Agencies (Brokers)▪ Clients (on the web)

» Hotels (OBC Operators)

Sometimes two industries can learn a lot from one another.– We think the OBC and the Travel industries are such a

case.

Here’s the travel model

120,000

Clients

Clients

Clients

Clients

CorporateAgencies

RetailAgencies

WebAgencies

Direct to Hotel

GDS

SaberGalileoet. al.

PegasusSolutions

PegsPayCommission

Processing, etc

PegsTourNetBooker, etc

RezViewHotel Factory

UtellUnirez

Hotelbook.com

Hotel Properties

PaymentProcessing

PaymentProcessing

PaymentProcessing

75,000

What was the outcome

Increased Visibility– Ease of market differentiation– High Speed decision making– Superior Customer Service and Satisfaction– Faster Payment

Increased Revenue– Price Point Optimization– Instant Inventory analysis

Lower Operating Costs– Reduced Commission rates– Reduced Operations and Administration

Our industry model today

Client

Client

Client

WebBroker,etc.

ConventionalBroker

Direct

Serviced OfficeOperator

Direct Payment

Direct Payment

10

50

Consider a new model

Client

Client

Client

WebBroker,etc.

ConventionalBroker

Direct

Serviced OfficeOperator

OBCSolutions

CommissionProcessing, etc

PegsTour

OBC Factory

UtellUnirez

OBCbook.com

PaymentProcessing

PaymentProcessing

ClientTravel

Agencies

PaymentProcessing

50

10,000

120,000

Net Gains are huge

Visibility– Increased Conventional Brokerage Community

• All Brokerage types would have equal and full access

• All Brokerage types would have instant inventory and communications access for reservations and booking.

– Totally New Travel Agency Community (others)• Entirely new sales channel

▪ Increase usage of conference and meeting rooms» Most productive space if fully occupied

– Established Web Broker Community• Newer Web Broker models at lower commissions

and higher profitability means more successful agencies selling to more clients.

OK, let’s review

A new ‘transparency model’ gives you– Lower costs of sale (commissions)– Lower operating costs– Improved inventory control– Improved (real time) optimized pricing models– Higher client visibility– More sales outlets– New sales channels– Better communications systems

We have the partner…

We have the ‘resources’.

And, plenty of them.

And, if we work together…. …we can do anything…

Even walk on water!

Let’s pick up the pace… and get UPSIDE DOWN!

Even walk on water!

Get UPSIDE DOWN now!

Do You want capital or not?

“May all your wishes come true”…a Chinese Curse

We’ve been on a Road Show

Establish a $$BB investment fund for our Members.– Operating Company Focus – RE Asset sub-focus

Have several offers from ‘top 10’ firms.

Here’s the ‘catch’.– Too expensive– Too restrictive– Too cumbersome– No short term exit

opportunity for anyone.

Turning “Upside Down” isn’t rolling over.

There’s challenging navigation ahead

Here’s what we mean.

What’s your ‘revenue ratio’ of Space to Service?– 60/40, 65/35, 70/30?– Most common is 65/35…and the 35 is going down.

What should it be?– It should be reversed to a 30/70 ratio.

• Why? Turns you into a ‘non-cyclical service company’.• How? By focusing on:

▪ VO…the really big one.

▪ IT…second and rising

▪ HR…hardest to do

▪ Contract Management…least profitable but easy

▪ Accounting Standards… the easiest and fastest.

! 1st let’s Focus on VO

Global ABCN Backbone– Anywhere Office Access– You ‘own’ the client

Dedicated Sales and Marketing– Separate Website

• Separate Optimization

– Separate Marketing Strategy

– Who are potential partners• “Agency Companies”• “Registration

Companies”• IT Companies

Some things you just can’t avoid!

Here’s an example

TOTALLY different site

TOTALLY different staff

TOTALLY global market

2nd Focus on IT and HR…with a dedicated “Client Service Portal”

Focus on HR & Services

Focus on IT Services

We have the ‘resources’…do you have the commitment?

Thanks…

Questions???

Remember, it’s the second mouse that gets the cheese… ABCN?