Strategic Growth Plan 6 NH Annual Report 2006 35

In January 2007, NH Hoteles submitted a three-year strategic plan to double the results of the company with a total investment of € 1,300M. With the launching of this ambitious development plan, NH Hoteles plans to double its operating profits (EBITDA) for hotel activities, until exceeding € 300 M in the 2009 period.   The expansion plan considers the integration of the recent additions to the company from the Jolly Hotels and Framon chains, at their Italy Business Unit, which will mean a disbursement of more than € 700 M, between investing and assuming debt. In addition, the company is planning an additional investment of € 100 M for changes to adapt the Italian chains to the standards of NH Hoteles. The goal planned by the company at its Italy Business Unit involves doubling the current results at the end of 2009, taking advantage of the opportunity to improve the operating efficiency of the acquired hotels. Jolly Hotels and Framon stand out due to their existing complementary nature with NH Hoteles, as far as the customer profile, services offered, strategic urban locations and full geographic coverage. Focused on Europe NH Hoteles plans to strengthen its leadership in the mid segment in Europe by concentrating its organic growth investments in the main markets of the continent where it already has a notable presence. The group plans to invest € 500 M in Europe, based upon the aforementioned positioning of the company in the main countries where it operates and taking advantage of the good economic outlook for the coming years. The middle hotel segment presents great growth potential in Europe, where only 25% of the hotels are operated by hotel brands. In this regard, NH Hoteles plans to take advantage of the growth opportunities of this fragmented market and consolidate its leadership in the 3 to 4 star segment. In this manner, the company will concentrate its investments on attractive real estate markets, such as Germany, and will use low risk formulas in the remaining markets where it operates, as in the case of Spain. NH Hoteles is placed in a unique position to obtain high profitability for its development plan. The company has increased brand recognition in countries such as Germany, Austria, The Netherlands and Belgium, and holds a high index in Spain, according to the last study conducted by the consultancy Ikerfel in 2006. The company plans to double the number of open and signed rooms over the next three years. The goal that is set out by NH Hoteles, to be sitting with more than 70,000 rooms at the end of 2009, will consolidate its leadership position in the European hotel segment.    The strategic plan considers a major investment in countries such as Germany or Italy, where very positive growth is anticipated, which are now being consolidated as target markets in the coming years. 25-30 % of the investment from the expansion plan will be set aside for the Business Units of Germany, Switzerland and Austria, giving special attention to projects with a product quality that is homogeneous to NH Hoteles in the eight main cities of Germany. Around 20-25% of the investment from the expansion plan will be concentrated on Italy, thus consolidating the company’s leadership in the transalpine country. Growth in Belgium, The Netherlands and Luxembourg goes through an increase of 3,000 rooms, based upon an increased presence of the chain in secondary cities (as far as number of inhabitants), in The Netherlands and especially in Amsterdam. In Belgium and Luxembourg the expansion will be focused on strategic cities such as Amberes or Luxembourg itself.   NH Hoteles plans to accelerate its position in Poland and in the most important cities of the Eastern Europe countries. For this purpose it will set aside around 10-15% of the investment from its strategic plan. In Spain and Portugal, NH Hoteles plans a growth of 2,000 rooms until 2009, maintaining its market share in the main cities where it already had a presence and seeking out opportunities in those cities that are not yet covered by the chain, through lease or management formulas. The growth plan in Latin America sets its main goal on raising the number of rooms in the capital of Argentina and in the main cities of Mexico, in addition to continue studying other markets of interest such as Chile, Colombia and Peru. In the vacation segment, where currently NH Hoteles has several projects under development in Bavaria and Cap Cana (Dominican Republic) and Riviera Maya (Mexico), the company plans to reinforce its growth with a very limited investment that will not exceed 3% of the total investment of the plan to 2009. NH Annual Report 2006 36

Financing of the Strategic Plan For the financing of the plan, in addition to the cash flow generated, the company announced a capital expansion for the value of € 250 M, where NH Hoteles has received the unanimous support of its shareholders, once the preferred subscription period has ended. The following graph shows the breakdown of the growth objective for rooms set out by NH Hoteles from last September to 2009: NH Annual Report 2006 37 •  Today •  Jolly Hotels & Framon •  Signed in December 2006 •  Goal 38,990 9,259 71,387 Dic ’06 2009 Average annual composite growth = 22% 5,138 18,000 NH HOTELES GROWTH PLAN 2006-2009  (No. of Rooms) Room of the NH Amistad de Córdoba Córdoba – Spain

Goal: 18,000 additional rooms The expansion include the addition of 32,000 rooms, between new openings and signings, which will be added to the 38,990 rooms that the company was operating on December 31, 2006. NH Hoteles plans an organic growth of 18,000 new rooms until 2009. In addition, to reach the goal of 32,000 rooms, NH Hoteles had 5,138 signed rooms and 9,259 recently added rooms at the beginning of 2007, thanks to the agreements reached with the Jolly Hotels and Framon chains. The following graph reflects the geographic diversification of the presence of NH Hoteles today and after completing the growth plan in 2009: NH Annual Report 2006 38 • 35% Spain and Portugal • 29% Germany, Austria and Switzerland • 19% Benelux (1) • 8% Latin America • 6% Resorts • 1% Eastern Europe • 1% Italy 35% 1% 19% 1% 29% 6% 8% • 22% Spain and Portugal • 21% Germany, Austria and Switzerland • 20% Italy (2) • 15% Benelux (1) • 10% Resorts • 8% Latin America • 4% Eastern Europe 22% 8% 20% 15% 4% 21% 10% DECEMBER 2006 DECEMBER 2009 (1) South Africa and United Kingdom included (2) Recent acquisitions of Framon and Jolly Hotels included Room of the NH Numancia Barcelona – Spain

NH Annual Report 2006 39 Germany, Austria and Switzerland 11,047 rooms Eastern Europe 321 rooms Italy 750 rooms Resorts 2,509 rooms Latin America 3,022 rooms Spain and Portugal 13,890 rooms Benelux 7,451 rooms Germany, Austria and Switzerland 14,663 rooms  +3,616 Eastern Europe 2,913 rooms  +2,592 Italy 14,087 rooms +13,337 Resorts 7,069 rooms +4,560 Latin America 6,199 rooms +3,177 Spain and Portugal 15,950 rooms  +2,060 Benelux 10,506 rooms  +3,055 38,990 ROOMS - DECEMBER 2006 CONSOLIDATING OUR POSITION IN EUROPE 71,387 ROOMS - DECEMBER 2009 Jolly Hotel Mediapark Cologne – Germany