NH Hoteles

03 21 STYLE, INNOVATION AND QUALITY AGUA DE LA TIERRA 22 NEW GLOBAL TECHNOLOGY SYSTEM 23 OTHER NEW FEATURES 23 NEW PRODUCTS 24 INTERNATIONAL TOURISM FAIRS 25 NH SHORT STORY AWARD 26 NH STOCK ART 27 COMMUNITY DEVELOPMENT 28 03 STYLE, INNOVATION AND QUALITY

22 “AGUA DE LA TIERRA” New toiletry kit For the first time, NH Hoteles has developed its own toiletry kit under the brand name Agua de la Tierra, which is available in all hotels throughout the chain. This modern kit is geared towards customer needs. Early in 2003, the Product Quality and Marketing team developed a new toiletry kit for the chain in collaboration with the Sales and Purchasing departments. After many months of work and several market and customer surveys, a high quality product has been produced, with a better image and more competitive price than the previous kit. Additionally, as an in-house product, it will provide significant cost savings. The Agua de la Tierra range takes its inspiration from Spain and the Mediterranean. The new products have a refreshing citrus aroma. The products are packaged in high-quality 40ml bottles and the Company has chosen first-rate, natural products such as glycerine soaps and body lotion with orange extract, all specially-designed to care for the skin. The content of the new toiletry kit varies according to the category of the hotel. At Collection hotels, the kit consists of shower gel, shampoo, a bar of soap, a comb, shaving cream and a razor, body lotion, a dental kit and a hairbrush. The NH Hoteles line offers a different kit consisting of shower gel, shampoo, a bar of soap, a comb, shaving cream and a razor, body lotion and a dental kit, and the chain's economy line kit includes shower gel, shampoo, a bar of soap and a comb. In addition, customers can obtain a number of extra products, such as a sewing kit, shower cap or sponge, at the hotel reception desk. NH Hoteles also offers customers the Agua de la Tierra Woman Style kit, exclusive to the chain, which is designed specifically for women and consists of special products such as makeup remover and body lotion, among others. The aim of these initiatives is to improve our day-to-day services, making each customer's stay as pleasant and as comfortable as possible. Due to the success of these new products, NH Hoteles has decided to make them available for purchase in a 200ml size gift set.

23 NEW GLOBAL TECHNOLOGY SYSTEM Prior to 2003, all of NH Hoteles' business units used different, standalone IT systems for administrative, retail and management processes, as well as internal and external communication. This made it difficult to standardise processes and compare results and management ratios, and also led to greater costs. As part of the “21st Century Project”, NH Hoteles has radically modernised all IT systems and services. The project led to: • The creation of a single IT system for the business units, for both front and back office applications. • The integration of management applications. • A unified corporate communication network. • New integration tools. • More secure data storage and access. • Guaranteed scalability of IT systems, enabling ongoing, cost- effective expansion, in line with the company's growth strategy. • Redundancy within the IT platform and communications network, providing a failsafe backup. The modernisation process began in 2002 with the implementation of the Human Resources, Administrative / Financial and Procurement systems in Spain and The Netherlands. A single e-mail domain has gradually been introduced for all NH Hoteles employees. The employee web portal (Intranhet), the NH Hoteles group internal communication system, has proved to be an effective means of providing relevant information on the company and is also a standard access point to corporate applications. The integration of the customer relationship management (CRM) and front office systems has led to greater knowledge of our customers and guests, including their preferences and comments. By 2003 year-end, all business units had a specific integrated IT system, regardless of their geographic location and scope of action. OTHER NEW FEATURES IN THE LAST 12 MONTHS • WI-FI: Wireless high-speed internet access is now available in almost all NH Hoteles establishments in Europe. • WEB SITE IN CHINESE: In order to access new markets, NH Hoteles has launched a version of its web site in simplified Chinese (used in continental China and Singapore). The site will also be available shortly in traditional Chinese (used in Hong Kong and Taiwan). • ELYSIUM, THE SPA AT NH HOTELES: NH Hoteles has opened two new Elysium Spa centres at the NH Marbella and the NH Eurobuilding hotel in Madrid. These new centres, which offer the latest health and beauty treatments, are in addition to the NH Almenara Golf, Hotel & Spa in Sotogrande. • AGREEMENT WITH THISTLE HOTELS: NH Hoteles has reached an agreement with Thistle Hotels to jointly develop sales, marketing and communications in the markets in which they operate, i.e. the UK, Continental Europe, Latin America, Asia and Africa. • CLIENT PAGE: NH Hoteles has developed a new online service which offers customers an exclusive, personalised web page, providing a more efficient booking service.

24 NEW PRODUCTS NH Hoteles has designed a number of new products with the aim of becoming a benchmark company within the urban leisure range. The intention is to offer the customer unique, original products and activities that cannot be found elsewhere in the market, by proposing a leisure alternative that differs from the rest of the hotel sector. Two examples of NH Hoteles' new proposals are "Content Weekends" and the "Collection Pack": • "Content Weekends" are special weekend packages which, in addition to the opportunity to enjoy the chain's establishments, offer a number of activities relating to culture, art, sports, music, literature, nature, cinema, etc. This initiative offers customers the chance to discover aspects of Spanish culture, sport and art through renowned individuals or institutions. These initiatives are intended to promote a distinct, innovative form of tourism that is cultural and intelligent, covering a vast range of options: courses, debates, lectures, master classes on various leisure, cultural and sporting activities, etc. A Content Weekend package includes accommodation, breakfast, lunch on Saturdays (in most options) and participation in all the activities featured in the program. Prices vary according to the type of activity. Reservations can be made through our information and reservation line (902 115 200) or the web site (www.nh-hotels.com). • NH Hoteles now sells the "NH Collection, a dream gift" pack—a special, innovative way to give someone a night in city hotels with special cultural charm in Spain. NH Collection includes one night's accommodation (Friday, Saturday or Sunday) in a double room or single occupancy in double, including breakfast, for a total of 99 euros. The pack is on sale at NH hotels in Spain and can be used until 31 December 2004. Collection hotels are a superior category of NH hotels, in beautiful privileged locations and emblematic buildings. The hotels included in this original promotion are: NH Príncipe de la Paz in Aranjuez, NH Palacio de la Ferrera in Avilés (Asturias), NH Podium in Barcelona, NH Palacio de la Merced in Burgos, NH Amistad in Córdoba, NH Abascal in Madrid, NH Alanda in Marbella, NH Palacio de Castellanos in Salamanca, NH Palacio de Oriol in Bilbao, NH Palacio in Vigo (Pontevedra), NH Palacio del Duero in Zamora and NH Gran Hotel in Zaragoza. The Collection hotels in the rest of Europe will be added to this selection. Some of these hotels are former palaces that have been fully restored while respecting the original structures to preserve the buildings' history. Gastronomy is usually an additional attraction. The Collection hotels include the following restaurants: Muserola (NH Príncipe de la Paz, Aranjuez), headed by Jesús del Cerro, holder of one Michelin star; La Vinícola (NH Palacio del Duero, Zamora), which offers local market cuisine in an incomparable architectural setting; La Ontina (NH Gran Hotel, Zaragoza), which has become a gastronomical benchmark in Spain under the management of Enrique Martínez, prestigious restaurateur and gastronomical advisor to the chain; and Rincón de la Merced (NH Palacio de la Merced, Burgos) where, advised by Enrique Martínez, the two young chefs, Aitor Olabegoya and Agustí Gebellí, offer seasonal local dishes with a modern twist. All Collection hotels boast NH Hoteles' standard details and services: Wi-Fi wireless internet, the brand-new "Agua de la Tierra" toiletry kit, a selection of pillows, hairdryer, minibar, air conditioning, room service, etc. This promotion is intended to offer a new way of presenting hotel stays as a gift in cities with special charm and a wide range of cultural and gastronomical delights. Collection Pack NH Abascal | Madrid (Spain)

25 INTERNATIONAL TOURISM FAIRS Madrid International Tourism Fair (FITUR) 2004 Madrid International Tourism Fair (FITUR) 2004 NH Hoteles once again participated in the Madrid International Tourism Fair (FITUR) 2004 and the Berlin International Tourism Fair (ITB) 2004. NH Hoteles celebrates its 25th anniversary this year, and it presented its new services and developments to visitors to FITUR 2004. NH Hoteles focuses on constant evolution in order to offer an improved service to meet customers' needs. This year, NH Hoteles presented two new cutting-edge gastronomical concepts—"nhube" and "FastGood"—co- designed by restaurateur Ferran Adriá and NH Hoteles. The chain also presented distinct innovative services, including Wi- Fi wireless internet, the new "Agua de la Tierra" toiletry kit, the NH Collection Pack and the Street Children project. The stand was visited by Spain's Secretary for Trade, Tourism and SMEs, Francisco Utrera, and the gastronomical advisor to NH Hoteles, Ferran Adriá. NH Hoteles was awarded the prize for the best hotel stand in the Berlin International Tourism Fair (ITB) 2004 on 12-16 March. A total of nine thousand exhibitors participated in ITB 2004. NH Hoteles came fifth in the "Tourism Company" category. The chain's stand covered a total of 112 square meters over two floors, and featured superb foodservice from NH Berlin Mitte hotel.

26 NH STORY AWARDS INTERNATIONALISATION OF THE NH SHORT STORY AWARDS: OVER 2 MILLION BOOKS PRINTED SINCE 1996 Winners of the VIII NH Short Story Awards with Pilar del Castillo, Spain’s Culture Minister, and Manuel Herrando, Director of NH Hoteles and Chairman of Sotogrande In August 2003, NH Hoteles presented the VIII NH Short Story Awards, which included a category in English for the first time. This literary competition, the only one to be organised by a hotel chain, awards the largest prize in Spanish language (60,000 euros) and this edition reflected the company’s international nature. Over 400,000 copies of the last three issues containing the award-winning stories from the previous edition were distributed in Spain, Argentina, Chile and Mexico. This year, the new edition was backed by Spain’s Culture Ministry, which included the NH Short Story Awards in its Reading Encouragement Plan. This Plan is aimed at reaching all levels of society through initiatives to encourage reading. Our hotels in The Netherlands and Belgium also provide our customers with a copy in English in their rooms so that they are aware of the award and can enjoy one of the chain’s most popular products. The awards cover different aspects of literary creation. In the last edition, 18,500 euros were awarded for the best unpublished book of short stories in Spanish (plus subsequent publication), 9,500 euros for the best unpublished short story in Spain, and 1,445 euros each to nine runners-up. A new category in English was introduced, with a prize of 9,500 euros and subsequent publication for the best unpublished short story. Also, an award was created for the best book of short stories published in Spanish in 2003. The NH Hoteles Short Story Awards are aimed at supporting short story writers and at encouraging and giving opportunities to young writers. Focusing on culture, this competition is intended to stimulate literary creation and reading as a leisure activity. THE VIII AWARDS CEREMONY The awards ceremony was held in the Casino de Madrid in January 2004. The jury was chaired by Gabriele Burgio and comprised Luis Landero, Elvira Lindo, Fernando Sánchez Dragó, Francisco Gutiérrez Carbajo and José Luis Martín Nogales. The English jury was formed by English Literature professors Ángeles de la Concha and Teresa Gibert. The awards were given by Pilar del Castillo, Spain’s Culture Minister, and Manuel Herrando, Chairman of Sotogrande and Director of NH Hoteles. Juan Eduardo Zúñiga won 9,500 euros in the category of best book of short stories published in 2003 for “Capital de la gloria”. Emilio Gavilanes won 18,500 euros in the category of the best unpublished book of short stories for “La tabla del dos”. Mexican writer Ignacio Padilla won 9,500 euros in the category of best short story for “Las furias de Menlo Park”. Australian-born Gloria Montero won 9,500 euros in the first edition of the award for best short story in English for “Mènage á trois”. The following short stories were finalists: “Las manos de Akiburo” by Ángel Cabrera (from Granada); “Mentiras sobre Ondarreta” by Juan Pimentel (Madrid); “Igual que entonces” by Eloy Cebrián (Albacete); “El vampiro en la baldosa” by Francisco Javier Sagarna (Madrid); “Ucronía” by Arcadio García (Barcelona); “Adviento” by Juana Salabert (Madrid); “La mirada del zimmermann” by Manuel Lozano Leyva (Sevilla); “Han matado a la señorita Oteiza, mamá” by Javier Izcue (Pamplona); “Doscientos años no es nada” by Lola Beccaria (Madrid); and “Doy mi nombre” by José Manuel Abad (Granada). NH Hoteles has published over 2 million copies of its books since 1996

27 Above, presentation of Stock Art in Berlin (Germany). Gabriele Burgio in the centre | Below, presentation of Stock Art in Amsterdam (The Netherlands) NH STOCK ART GOES ABROAD NH Hoteles presented the 50 works of art comprising the NH Stock Art collection outside Spain for the first time. NH is the only hotel chain that provides this innovative proposition, which supports young painters and has reflected creative trends since the 1980s. NH Stock Art, which was created in 1998, is a collection of 50 works of art selected from among the over 3,000 pieces comprising the chain’s private collection and it is aimed at decorating the common areas of our hotels for our clients' enjoyment. NH Stock Art is a travelling exhibition open to the public which is shown at the chain’s hotels. So far, the collection has travelled to many Spanish cities such as A Coruña and Valladolid and in 2003, for the first time, it was presented in The Netherlands. The exhibition opened in Berlin in March 2004 and will visit several European cities between now and year-end. THE NETHERLANDS In 2004, there were exhibitions in Amsterdam, Maastricht and Rotterdam as part of the NH Hoteles commitment to take its works of art to all the countries in which it is present. For the exhibition in The Netherlands, at the NH Amsterdam Centre NH Hoteles acquired six new works by Dutch painters, which enrich the collection and considerably enhance its international dimension. Specifically, NH Hoteles bought paintings by Lita Cabellut, Nan Groot Antink, Eric Knoote, Jan Van den Berg, Warffemius and Harry Wolfkamp. GERMANY NH Stock Art was presented at NH Berlin-Mitte hotel in Germany on 17 March 2004. Gabriele Burgio presided over the ceremony, which was attended by important German art critics and cultural celebrities. The collection will then travel to Frankfurt and Hamburg, for which the chain has selected six new works by German painters: Kurt Ebbers, Martin Gerwers, Harald Gnade, Thomas Hartmann, Andre Martus and Wolfgang Sahlmann. After the presentation in Germany, the collection will travel to other countries in which NH Hoteles operates, such as Hungary and Switzerland. The company is also studying the possibility of exhibiting the NH Stock Art collection in Latin America, in the NH hotels in Mexico and Mercosur. Presentation of Stock Art in Berlin (Germany)

28 CORPORATE SOCIAL RESPONSIBILITY “STREET CHILDREN” PROJECT NH Hoteles and Fundación Codespa signed an agreement for the “Street Children” project in August 2003. This is the first social programme in which NH Hoteles has involved all the company and the only one of this type implemented by a Spanish company in Mexico. The project provides young people living in Mexico City’s streets with opportunities for professional development and social reintegration through training in the hospitality business. During the course subsidised by NH Hoteles, the chain offers the students the possibility of work experience. The real spirit of the project is to insert young people into the labour market, for which NH Hoteles proposes various actions during the course in order to achieve all-round success. This is a long-term initiative, a project for the future, a Company- wide commitment. Brochure of the “Street Children” project, in collaboration with Fundación Codespa Presentation of the “Street Children” project in Mexico, with Gabriele Burgio, Chairman of NH Hoteles.

29 COLLABORATION INITIATIVES In 2003 and 2004, NH Hoteles collaborated with the following institutions: FUNDACIÓN CAROLINA (SPAIN) MESSENGERS OF PEACE (ARGENTINA) WAR CHILD FOUNDATION (THE NETHERLANDS) COOPERADORA DE ACCIÓN SOCIAL (ARGENTINA) SOLIDARIOS PARA EL DESARROLLO (SPAIN) AMEX (SPAIN) PRINCE CLAUS FOUNDATION (THE NETHERLANDS) MADRID ROTARY CLUB (SPAIN) MOTHER TERESA’S HOMES (ÁFRICA) AFANIC (SPAIN) UNICEF AWARDS (SPAIN) SPANISH CANCER ASSOCIATION (SPAIN) FUNDACIÓN IUVE (SPAIN) FUNDACIÓN ESTEBAN G. VIGIL (SPAIN) FUNDACIÓN PRESTIGE (SPAIN) FUNDACIÓN CESAL (SPAIN) MANOS UNIDAS (SPAIN) CÁRITAS (SPAIN) INTERMON (SPAIN) SAVE THE CHILDREN (SPAIN) SPONSORSHIP OF THE DALAI LAMA’S VISIT (SPAIN) NUEVO FUTURO (SPAIN) FUNDACIÓN MADRINA (SPAIN) VILLA-PAZ HOMELESS HOSTEL (SPAIN) SPANISH RED CROSS (SPAIN) FUNDACIÓN MENUDOS CORAZONES (SPAIN) FUNDACIÓN PEQUEÑO DESEO (SPAIN) “UNA CASA PARA LOS POBRES” ASSOCIATION (SPAIN) FUNDACIÓN SURT (SPAIN) FUNDACIÓN SEMILLA (SPAIN) FUNDACIÓN ADECCO AND SOCIAL AFFAIRS MINISTRY (SPAIN) FUNDACIÓN VALORA (SPAIN) NH Hoteles’ mission in Ethiopia, where it shipped material last summer

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