PART I. VISION OF CORPORATE RESPONSIBILITY NH Corporate Responsibility 2006 9

“Nhube” from NH Balboa Madrid - Spain 1

1 Our focus on Corporate Responsibility AT NH HOTELES WE UNDERSTAND CORPORATE RESPONSIBILITY TO BE A KEY PART OF OUR CHAIN’S ACTIVITY. THIS MEANS OUR VISION CAN BE SUMMARISED AS OFFERING HOTEL SERVICES WHICH ANTICIPATE PRESENT AND FUTURE NEEDS OF BOTH OUR INTERNAL AND EXTERNAL STAKEHOLDERS (EMPLOYEES, CLIENTS, SHAREHOLDERS, SUPPLIERS, ETC.), THE COMMUNITIES WHERE WE OPERATE AND FUTURE GENERATIONS WITH MAXIMUM ATTENTION TO DETAIL AND EFFICIENT AND SUSTAINABLE SOLUTIONS. We see this vision reflected in the values characterizing NH Hoteles’ culture and its actions as a responsible enterprise: •  Trust Worthiness: At NH Hoteles we are trustworthy, competent and display ethics and transparency in our relationships. •  People Focus: The heart of our company's activity is people, our clients and our employees, our shareholders and our suppliers. As hotel managers we are characterised by the vocation of service, and we strive to satisfy our clients' needs with a special sensitivity towards different stakeholders. •  Business Sense: This is one of the values which guides NH Hoteles in its daily activities. We take the actions required for consistency with our strategy and responsibility so as to ensure economic viability, profitability and financing of our future company.   •  Innovation: Our challenge is to anticipate the present and future needs of our clients and a constantly changing society by creating new products and services. •  Fun: At NH Hoteles we perform our work with enthusiasm.   We enjoy giving the best of ourselves and are convinced that this positive energy is transmitted and outwardly contagious, generating shared benefits. This focus underlies our corporate culture and is the reference point around which our management is structured, just as we have integrated corporate responsibility into the entire institution. To prepare the first Corporate Responsibility Annual Report, and as a first step towards accountability in following the Global Reporting Initiative (GRI), NH Hoteles has undertaken a process of inquiry and internal meaning to define its focuses on leadership and management in the main areas of responsibility exactly as required by the GRI’s G3 version. It has to do with responding to a broad set of needs, some traditional, others new, in the hotel industry: demographic and social changes affecting our present and potential clients and those to whom we must give response; the growing shortage of staff for our hotels in certain countries or the lack of social value in this activity industry. Identified needs have been grouped by focus type: 1. Focus on our Economic Development •  We believe that efficient company financial management and transparency in accountability are fundamental to achieving our business objectives, which are to satisfy the economic interests of our shareholders and guarantee the creation of wealth upon which we can create shared value. •  We maintain direct and transparent communication with our shareholders by being especially demanding about detailed information on Corporate Management. NH Corporate Responsibility 2006 11 NH Hoteles Employee Card

NH Corporate Responsibility 2006 12 2. Focus on Environmental Management •  In our company we place a premium on an ecological and environmental approach throughout the business cycle, from the jobs of hotel planning, design and construction to its daily work and the services we offer our clients. •  We like to be a step ahead by studying technological opportunities and analysing changes in living habits so we can be innovative and offer services to answer the social and environmental challenges of the future. •  We are an eminently urban hotel chain, firmly committed to the sustainable development of our cities. •  We contribute to the rational use of urban terrain by restoring buildings which also permit mixed use and through an innovative space management model that optimises a building’s surface with important energy savings as a result. •  Approximately 50% of the energy that Europe consumes is used for buildings’ functioning. NH Hoteles is continuously working towards rational energy use by keeping the buildings in good working order, bringing energy consumption to a balanced level and promoting the use of renewable resources, all the while guaranteeing the highest quality of service to create a satisfying experience for our clients. 3. Focus on Labour Practices and Work Ethics •  At NH Hoteles we believe in an occupational environment filled with creativity, innovation, motivation and enthusiasm shared with our clients. •  Our Code of Conduct sets the criteria for good practices and excellence in the provision of services and fosters the policy of diversity, its management and equal opportunity in all processes. •  Since its very beginning NH Hoteles has opted for professional development and employee training as the means to fulfilling our philosophy of excellence and continuous improvement, thus inspiring our client service. As a result, talent management plays an especially important role in a business of continuous growth and expansion. •  Our global presence promotes cultural and national diversity, with NH Hoteles' Integration Policy being a priority by favouring its employees’ international movement. We believe that through a diverse and well integrated staff we guarantee the best service to our clients. Our main goals focus on the flexibility to face such diversity and conciliation as a key element in retaining internal talent, as well as being attractive to the labour market. •  To guarantee community integration, one of our priorities is creating total accessibility for our clients and employees by adapting our hotels and information systems to them. 4. Focus on Human Rights •  Because the company’s main activity is people, we are firmly committed to human rights and its promotion and have signed the 2006 United Nations Global Compact. •  NH Hoteles is present at a global level and aware that business development everywhere must guarantee harmony among the globalisation of tools and processes, respect and development for local cultures and the promotion of human rights. Almenara Golf Course Sotogrande - San Roque - Cádiz - Spain

NH Corporate Responsibility 2006 13 5. Focus on the Impact on Communities in Which We Operate and on Society •  Hotel activity and tourism are important engines for a country’s economic and social development, and NH Hoteles is proud to form part of the chain that creates wealth in those places where we are present. •  NH Hoteles is a worldwide company providing services in very different geographic areas, developed countries and developing regions. Thanks to this we are contributing to the creation of local employment as well as to the economic and social growth of those communities in which we operate. •  At NH Hoteles we are actively committed to the most underprivileged social groups and work together with NGOs, Foundations and Institutions on numerous social action programs. The advisory process on the institution’s guiding principles has also helped us design a first Strategic Plan that will form the company’s action focal point for Corporate Responsibility. This may be divided into three areas: A) Responsible common initiatives towards the business industry These are the substantial topics on which we must report and act, just as on other business industries, since they pertain to common sustainability goals where all businesses must put specific actions into motion. Among these topics at the international level we find obligations to Corporate Management, transparency and shareholder participation; reconciliation of employees’ family and work lives; service quality and client services; the promotion of responsibility towards the value or supplier chain and the company's environmental management. We must act and be accountable for all of these, as required of the entire business industry. B) Specific responsible initiatives for the tourism and hotel industries We must take action on these initiatives in a singular fashion due to their special meaning and transcendence at the macroeconomic level of the industry in which we operate, the tourism industry and more specifically, the hotel and renovation levels. For example, such is the case in the importance of hiring, retaining, training and promoting personnel in an industry like hotels, so intense in human resources; the impact our industry must have on local economic and social development; the special value that tourism and the hotel industry bring to the understanding and management of cultural diversity; the promotion of indirect employment our industry generates; etc. In these areas we must offer a solid response and position ourselves by developing specific policies in line with the responsibility and sustainability our industry demands. C) NH Hoteles’ specific scope of responsibility Specific subjects of responsibility and sustainability to which NH Hoteles can give a better response, depending on their particulars: its history, values, experience, abilities, markets of operation and the services it renders. Social and environmental challenges shape these initiatives, to which our activity as a hotel company can decisively contribute. Our main responsibility is rooted in this field, because through our own business activity we can better contribute to local and global development in the medium and long term. •  Because the company’s main activity deals with people, we are firmly committed to human rights and its promotion and have signed the 2006 United Nations Global Compact. •  NH Hoteles is present at the global level and aware that business development everywhere must guarantee harmony among the globalisation of tools and processes, respect and development for local cultures and the promotion of human rights.

“Nhube” of NH Nürnberg City Nuremberg - Germany 2

2 Our management of Corporate Responsibility The management of NH Hoteles is totally involved in the drive and development for a culture of Corporate Responsibility at the company, with the result that the Department reports directly to the President, its Director being a member of the Management Committee and the strategy defined in this area being protected by an Independent Advisor. The company has considered strengthening channels of dialogue and advice with different stakeholders as a priority as well as internal and external sensitisation to Corporate Responsibility by systematising responsible policies (environmental, people management, client relations, etc.) and improving accountability. To ensure proper implementation and coordination in the different Business Units, a Corporate Responsibility Manager is named at each Business Unit, with a Monitoring Committee defined at the Corporate level unifying the organisation’s different areas, among which we find, among others the Directors and Managers of Investor Relations, Projects, Engineering and Maintenance, Human Resources, Purchasing, Marketing, Innovation and Style. This group will oversee completion of the action plans and the completion of improvements. In 2006 NH Hoteles was able to identify company risks by defining a respective map under the categories of regulatory, operational, financial, environmental and strategic risks. The map will serve as a basis for future identification and risk management planning in the area of corporate responsibility. 2007 has seen our first Annual Report specifically on Corporate Responsibility for the company in 2006. It establishes the measurement and reporting systems that will let us be accountable according to the most commonly used reporting systems, as concluded by the Global Reporting Initiative, G3, who has given us the appropriate seal of verification. To make inquiries or get more Annual Report information, you can access the Corporate Responsibility page at the NH Hoteles website (www.nh-hotels.com) or send an email directly to Marta Martín, Corporate Responsibility Manager (m.martinmartin@nh-hotels.com). Board of Directors: Corporate Responsibility Advisor President: Gabriele Burgio Corporate Responsibility Director:    Juan Mª de Mora Corporate Responsibility Manager:   Marta Martín Corporate Responsibility Area Organization NH HOTELES IS EVER MORE AWARE OF ITS ROLE AS AN ACTIVE AGENT IN SOCIETY'S FAIR DEVELOPMENT AND BELIEVES IT SHOULD ACTIVELY MANAGE CORPORATE RESPONSIBILITY BY FULLY INTEGRATING IT INTO THE BUSINESS STRATEGY. AS A RESULT, IN 2006 WE CREATED A CORPORATE AREA OF CORPORATE RESPONSIBILITY, WHICH IS RESPONSIBLE FOR DESIGNING AND IMPLEMENTING AN INTEGRAL MANAGEMENT SYSTEM FOR THE CORPORATE RESPONSIBILITY POLICIES AND ACTIONS THAT THE COMPANY HAS BEEN ACCOMPLISHING ALL ALONG UP UNTIL NOW. NH Corporate Responsibility 2006 15

NH Corporate Responsibility 2006 16 The Global Compact As a result of the process undertaken by the company to foster its responsibility and focus on it in 2006, NH Hoteles embraced the United Nations Global Compact, a commitment to 10 principles that the company is incorporating into its strategy and operations with a pledge to implant them gradually. Code of Conduct In July, 2006, the Management Committee approved the new NH Hoteles Code of Conduct to promote some of the same guidelines for action in a diverse and multi-cultural staff. The fundamental principles and summary of the main aspects it covers are as follows: 1. Ethics and Integrity 1.1. Compliance with Prevailing Law 1.2. Independence of NH Hoteles Personnel 1.3. Election and Supervision of Suppliers 1.4. Service to Clients and Suppliers 1.5. Acceptance of Fees 1.6. Use of Corporate Funds and Assets 1.7. Conflicts of Interest and Exclusivity 1.8. Participation on Administrative Bodies 1.9. Prevention of Occupational Risks 1.10. Consumption of Alcohol and Drugs 2. Absolute Integrity 2.1. Shareholders 2.2. Bribes 3. Constant Respect for Persons, the Surroundings and Our Competition 3.1. Fulfilment of Commitments 3.2. Absence of Harassment 3.3. Environment 3.4. Rules on Tobacco 4. Equality of Rights and Opportunities 4.1. Equality of Opportunities and Fostering Diversity 4.2. Promoting the Balance between Personal and Professional Life 5. Transparency 5.1. Transactions Made at NH Hoteles 6. Confidentiality and Data Protection 6.1. Confidentiality of Information 6.2. Data Protection 6.3. Confidentiality towards Competitors Principle One Businesses should support and respect the protection of internationally proclaimed human rights. Principle Two Businesses should make sure that they are not complicit in human rights abuses. Principle Three Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining. Principle Four Businesses should uphold the elimination of all forms of forced and compulsory labour. Principle Five Businesses should uphold the effective abolition of child labour. Principle Six Businesses should uphold the elimination of discrimination in respect of employment and occupation. Principle Seven Businesses should support a precautionary approach to environmental challenges. Principle Eight Businesses should undertake initiatives to promote greater environmental responsibility. Principle Nine Businesses should encourage the development and diffusion of environmentally friendly technologies. Principle Ten Businesses should work against all forms of corruption, including extortion and bribery.  

NH Corporate Responsibility 2006 17 7. Client Orientation and Vocation of Service 7.1. Client Orientation 8. Continuous Improvement / Teamwork 8.1. Teamwork 8.2. Fostering Innovation 8.3. Efficient Use of Resources 8.4. Internal Coordination 9. Use of Business Computer Tools 9.1. Appropriate Use The complete version of the Code of Conduct is available for all employees on the company’s IntranHet and has been published in 5 languages (Spanish, French, Dutch, German and English). The code, which has been implemented in the 21 countries in which the company operates, incorporates an application procedure that includes an information and non-compliance reporting system with the applicable sanctions. This system offers all employees the opportunity to look up or send information on conduct that is contrary to code by letter or email through the electronic mailbox created for that purpose and which can be accessed through the corporate IntranHet. Employee of NH Düsseldorf City Nord Düsseldorf – Germany

3 Employees of NH Berlin-Mitte Berlin – Germany

3 Principles governing this Annual Report NH Corporate Responsibility 2006 19 Regarding definition of the report’s content, it attempts to embrace NH Hoteles activity on global level during the year 2006. In some specific areas the company is making a partial report, in which case the reason is explained along with which part of the company the data, policies or programs being developed in the corporate responsibility sphere refer. For NH Hoteles, preparing its first annual report on corporate responsibility means a dynamic process of information sharing and the participation of different company directors. Steps followed in the preparation of this report have been the following: •  Introduction of the objectives for preparing the first Annual Report of Corporate Responsibility to the Corporate-Level Monitoring Committee, which brings together the different areas of the organisation. •  Formal request for information on policies and actions of responsible value that might have been developed over the year. The Corporate Responsibility Department made this first request for information to every corporate area and to the Corporate Responsibility Managers of the Business Units. •  The holding of interviews with each person responsible for relations with strategic stakeholders and/or areas for the purpose of qualitatively obtaining information we considered material to public accountability on sustainability. •  Sending the report to the Board of Directors, President, Management Committee and Corporate Directors once it was edited but before its publication for final approval that the relationships with stakeholders and/or areas of their responsibility have been faithfully reflected. The Internal Auditing Committee and Global Reporting Initiative, Version G3, Level C, have verified the published data. NH HOTELES HAS PREPARED THIS ANNUAL REPORT BY FOLLOWING THE GENERAL GUIDELINES ESTABLISHED BY THE GLOBAL REPORTING INITIATIVE (GRI) IN ITS G3 VERSION CONCERNING CONTENT DEFINITION AND QUALITY OF REPORTS ON SUSTAINABILITY.

NH Corporate Responsibility 2006 20 Materiality Participation of stakeholders Sustainability Context Exhaustiveness Balance Comparability Accuracy Periodicity Clarity What is significant, important, relevant and has impact on the subject of our activity’s responsibility and sustainability. Identification of groups and proper response to their reasonable expectations and interests. Manner in which the organisation contributes to development at a local, regional or global level. Scope, coverage and time to which the report refers. Reasonable and appropriate presentation of data, related to quality. The report should reflect both positive and negative aspects and allow a reasonable evaluation of the company’s performance. The report should allow an analysis of the evolution and changes. The report should be sufficiently precise and detailed so that the organisation’s performance may be evaluated. The report will be presented on time and by following a periodic calendar. Information should be shown in an understandable and accessible form. Through a consultation process with the company’s chief executives, NH Hoteles has outlined a classification for relevant topics on responsibility, which are included in this Annual Report. NH Hoteles has begun a process of involving the strategic public through consultation with managers in charge of their relations so we could create this Annual Report. NH Hoteles has specified this context in the Annual Report through the Vision of Sustainability and different company approaches to its performance in economic, labour and other areas. This company’s first independent Annual Report on Corporate Responsibility encompasses the 2006 year except for specific actions, which are noted. This Annual Report also refers to the company’s worldwide activities. It provides partial and concrete information on specific aspects. By creating this first Annual Report on Corporate Responsibility, NH Hoteles pledges to report future data related to the coming years that allow such evaluation. By creating this first Annual Report on Corporate Responsibility, NH Hoteles pledges to report future data relating to the coming years that allow such evaluation. As a first report this Annual Report has tried to follow a reasonable order for relations with different public groups who form the primary areas of company responsibility. NH Hoteles is committed to being accountable on an annual basis with this being its first Annual Report on Corporate Responsibility. The Annual Report has been internally reviewed by the various departments and managers who have supplied information to guarantee its clarity. It has also been reviewed by the Board of Directors, the President and the Managing Committee. The Internal Auditing Committee and GRI have verified the published data. Principles Related to Report Quality Principles Regarding the Definition of this Report's Contents EXPLANATION OF THE PRINCIPLE ACCORDING TO GRI G3 HOW WE ENSURE THIS PRINCIPLE

21 NH Central Convenciones Seville - Spain