“Making the Most of What you Have”37th Annual Arkansas Governor’s Conference on Tourism

Partners Luncheon March 7, 2011

“Making The Most of What You Have”

R. Byron CarlockPresident and CEO

CNL Lifestyle Company LLC

.

CNL Lifestyle Properties, Inc.

Launched in April 2004 as CNL Income PropertiesNon-traded real estate investment trust (REIT)Preeminent landlord of experiential real estate$2.7 Billion in Total AssetsPortfolio of 151 ski, golf, attractions, marinas, senior living & additional properties

Our Portfolio of Lifestyle Properties

33 Operators/Managers32+2 Geographies10 Sectors

Accessible Drive-To Locations

97% of properties are within a 3 hour drive to major metro areas

=

Ideal for “staycations”

Property Sector Timeline38 years / 6 down cycles

29 years / 4 down cycles

28 years / 4 down cycles

48 years / 7 down cycles

31 years / 5 down cycles

ALL34 years / 5 down cycles

‘72

‘81

‘82

‘62

‘79

‘79

‘61 Berlin Crisis& Bay of Pigs

’70 Vietnam War

‘75 Nixon Resignation& Oil Embargo

‘80 High Inflation

‘82 Savingsand Loan Crisis

‘91 Persian Gulf War

‘01 AccountingScandals & 9/11

‘08 Sub-Prime Crisis

Economic Cycles

Ski & Mountain Lifestyle

Golf

Attractions

Marinas

Additional Lifestyle

Properties

Vacation Time Around the WorldAverage vacation days per year

42Italy

37France

35Germany

34Brazil

28United Kingdom

26Canada

25Korea

25Japan

13United States

Realignment of Priorities + Time =

A Realignment of Priorities

Increase of leisure and lifestyle activities Pursuit of passions

ECHO BOOMERS

77MILLION

GENXERS

50MILLION

BABYBOOMERS

77MILLION

Marketplace Demographics2010 percentage of population by age group

An Incoming Wave of 203 Million

AGE

RETIREMENT BEGINS

PERC

ENT

OF

U.S

. PO

PULA

TIO

N

• Account for 36% of the workforce3

• Spending $400 billion/year4

• By 2015, will spend $2.4 trillion/year4

• Entering peak earning and spending years2

• Head 46% of households with children2

• Account for 22% of workforce3

• More than 22% earn $100,000 or more annually2

By 2015, will hold:1

• 83% of nations net worth• 53% of disposable income• 54% of consumer spending• Average household income of $94,400

Demographics & PsychographicsThe Demand “Drivers”

GEN XERSBABY BOOMERS46 64

ECHO BOOMERS77 97

”Encountering Anguish & Anxiety Across America” TIME magazine October 7, 2010

Topic ABest days are behind usKids won’t live as wellChina in driver’s seat

PoliticsDemocrats: don’t know what they stand forRepublicans: know exactly what they stand for Washington is broken

Most Passionate on: Financial community and effect on economy

Constant state of warEvery 1 mention of Afghanistan there’s 25 for China

Economy trumped terrorism

What Americans Are Thinking

Recent Wharton Psychology StudyTime matters more than money even when you live below the poverty line

“New Normals” Staycations over vacationsCutting back on small things

What Americans Are Doing

LA Times: Super rich are opening wallets wider at theme parksReuters: Winnebago quarterly profit tops Wall Street view –Class A category "New Normal” CNBC: Luxury sector rebounding as wealthy replenish their wardrobesUSA Today: Nation’s wealthiest 5% account for 37% of consumer spending; its OK to splurge WSJ: Safe to look rich again; new luxury is deeply appropriate

What Mass Affluent Americans Are Doing

Experiences Over Products

Fighting Frugal Fatigue 11/19/2009 The Boston

Globe

Frugality Falling Out Of Fashion?

10/19/2009 The Washington Post

Frugal Fatigue? Some Are Splurging A Little

05/06/2009 The Associated Press

In Recession, Americans Doing More, Buying Less

01/03/10 New York Times

Study: Experiences Make Us Happier Than Possessions

02/10/09 CNNHealth.com

Experiences Bring More Joy Than Possessions Do

02/09/09 US News & World Report

FRUGAL FATIGUEEXPERIENTIAL PURCHASES &

Family often encompasses three generationsParental guilt: both working in 60% of households

Kids in the driver’s seat Grandparents pick up the tab

Looking for kid enrichmentLooking for adult relaxation

What’s The “Perfect” Getaway?

Start with value proposition then capture luxury dollars upon arrival with up-sell opportunities

Social media is driving traffic: SMERF (Social, Military, Educational, Religious and Fraternal groups)

Fear is entering consumer decisions: flying, going abroad, economic/political environment, security/body scanners

Authenticity is the answer: “Consumers want a way out of their bad mood; only cure is authenticity”

Moods and Trends in Leisure & Lifestyle

10 Attributes of Authenticity of the Connected Generation’s Consumer Cravings

1. Shine the spotlight: Extreme personalization, marketing has a new face2. Raise my pulse: Adventure is the new social currency3. Make loose connections: Redefine the meaning of family4. Give me brand candy: Everyday objects get sharp intuitive design5. Sift through the clutter: Editors and filters gain new prominence6. Keep it underground: Rejection of push ads; rise of peer-to-peer networks7. Build it together: Connected; exploring creativity & influencing change8. Bring it to life: Orchestrating everyday activities--a sense of theater9. Go inward: Spiritual hunger, modern media find common ground10. Give back: Redefining volunteerism & community contributions

USAToday: Women, young adults are active ‘social animals’

“Attributes of Authenticity”:

Experience: Consumers want to get out there and test personal limits. They want to feel alive and shake up a stale routine

Transparency: Connected generation knows how to get full disclosure. The push model of marketing will no longer work

Reinvention: X and Y generations demand what’s new, better, faster and more efficient. If it doesn’t work they will find what does

Connection: The new market runs on cooperation. The hottest sites on the Internet like Facebook, eBay and Craigslist connect people

Expression: People are searching for new ways to define and express themselves

5 Essential Criteria Underlying All Cravings

Retail Market Examples

Whole FoodsFocus on specialty food with a story and locally grown produce; defied the recession with authenticity

TOMS shoesSocially conscientious retailer

Toms of Maine All natural and branding around their state

Las VegasFrom family focus in 90s, back to adult focus

CNL Lifestyle Properties Case Study

Historic, Iconic, Irreplaceable

Luxury hotel

Fine dining/Affordable dining

Golf/Fishing/Hiking/Camping

Skiing/Zip-Lining

The Omni Mount Washington Resort

Regional/State Authentic: Food/Wellness/Hospitality

The Southern BBQ Trail

California Mud Baths

Haycation

Hot Springs Bath House Row

Regional/State Authentic:Music/Arts & Crafts/Literature

Chicago Blues FestivalKing Biscuit Blues FestivalSpoleto Festival

The Literary Trail of Greater BostonMidnight in Garden of Good and EvilGrisham Trail

DollywoodSilver Dollar City

Regional/State Authentic: History/Geography

The Appalachian Trail

Maine Huts & Trails

Regional/State Authentic: Sports/Adventure

Robert Trent Jones Alabama Golf Trail

Sugarloaf Sugar Shack

Texas River Tubing

Q&A