 Annual Stockholder Meeting April 17, 2012 William & Mary Alumni House Williamsburg, Virginia *MHI Hospitality Corporation Trades on the NASDAQ® Under the Symbol MDH Exhibit 99.1 |
 This presentation includes “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933. Although the Company believes that the expectations and assumptions reflected in the forward-looking statements are reasonable, these statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict and many of which are beyond the Company’s control. Therefore, actual outcomes and results may differ materially from what is expressed, forecasted or implied in such forward-looking statements. Economic conditions generally and the real estate market specifically, management and performance of the Company’s hotels, plans for hotel renovations, financing plans, supply and demand for hotel rooms in the Company’s current and proposed market areas, the Company’s ability to acquire additional properties and the risk that potential acquisitions may not perform in accordance with expectations, legislative/regulatory changes, including changes to laws governing taxation of real estate investment trust and competitions, and other factors may affect the Company’s future results, performance and achievements. These risks and uncertainties are described in greater detail under “Risk Factors” in the Company’s Annual Report on Form 10-K and subsequent reports filed with the Securities and Exchange Commission. The Company undertakes no obligation and does not intend to publicly update or revise any forward- looking statement, whether as a result of new information, future events or otherwise. Although we believe our current expectations to be based upon reasonable assumptions, we can give no assurance that our expectations will be attained or that actual results will not differ materially. 2 |
 Corporate Highlights 55 years as owner/operator in lodging industry Conservative and steady growth during periods with advantageous market conditions Proven acquirer with extensive repositioning experience 3 Edgar Sims begins operations of predecessor company with the purchase of a 12-room motel Multi-Unit operations began with acquisition of additional properties; Drew Sims joins MHI Portfolio repositioned to full service hotels Initial Public Offering and acquisition of six initial hotels Acquisition of Crowne Plaza Jacksonville Riverfront Acquisition of Sheraton Louisville Riverside; disposition of Holiday Inn Downtown Williamsburg Acquisition of Crowne Plaza Tampa Westshore; Acquisition of Crowne Plaza Hollywood as a JV with the Carlyle Group Acquisition of Crowne Plaza Hampton Marina Completion of $3.4 million Rights Offering Completion of $25.0m Preferred Stock Issuance; $57.7 million in asset-level debt financings 1957 1995- 96 2005 2006 2007 2008 2009 1981- 85 2011 2004 |
 MANAGEMENT TEAM *MHI Hospitality Corporation Trades on the NASDAQ® Under the Symbol MDH |
 5 Andrew M. Sims Chairman & CEO William J. Zaiser EVP & CFO David R. Folsom President & COO Chairman & CEO since 2004 inception and IPO President of MHI Hotels Services from 1995 until 2004, after serving seven years as VP of Finance and Development 30+ year career in operating, developing and owning hotel properties Former member of the Hilton Advisory Board Director of MHI Hospitality Corporation EVP, CFO, Treasurer & Secretary since the Company’s inception in August 2004 Served as VP of Accounting at MHI Hotels Services from 1990 until 2004 Certified Public Accountant Joined MHI in 2006 as COO President of the Company since 2011 Former VP of Paragon REIT, an early stage venture focusing on distressed multifamily assets Investment banker with BB&T Capital Markets in its Real Estate and Debt Capital Markets Groups Director of MHI Hospitality Corporation Extensive relationships with owners / franchisors of full- service, upper-upscale and upscale hotel brands 80+ years of combined experience in the lodging industry, capital markets and core geographic markets Aligned with shareholders’ interests: 35.3% insider ownership of all current shares and units outstanding Numerous industry awards for completed hotel renovations, operating efficiency and guest services |
 Gen. Anthony Zinni (Ret.) James O’Hanlon J. Paul Carey Edward Stein Shareholders are supported by a strong group of directors Anthony Zinni – Former Chairman, BAE Systems, and EVP of DynCorp International. Commander-in Chief, U.S. Central Command and Senior Presidential Advisor and Envoy. Has served on a variety of public company Boards and private investment Advisory Boards. General Zinni serves as an Independent Director. James O’Hanlon – Former President & COO of Dominion Energy, a Fortune 500 Company. Former COO of Dominion Generation, and SVP of Nuclear Operations of Virginia Power. Captain, U.S. Naval Reserve (retired). Mr. O’Hanlon serves as an Independent Director. J. Paul Carey – Managing Partner for JPT Partners, served as CEO of Enumerate Solutions. Executive Vice President for Sallie Mae, and served on the Board of Trustees for the University of Maryland Foundation. Mr. Carey serves as an Independent Director. Edward S. Stein -Founding Partner of the Norfolk-based law firm of Weinberg and Stein, where he specializes in real estate, estate planning, probate, corporate law, business law and licensing. Member of the Norfolk and Portsmouth Virginia Bar Association. Mr. Stein serves as an Independent Director. David J. Beatty – Founder of Essex Commercial Mortgage, Founder and President of CENIT Commercial Mortgage Corporation, Founder of Towne Commercial Mortgage where he currently serves as President. Mr Beatty serves as an Independent Director. Kim E. Sims - President of MHI Hotels Services, was Executive Vice President of Operations for MHI Hotels Services since 1995. He is a graduate of Washington & Lee University with a degree in commerce. Mr. Sims is an Affiliated Director. Ryan Taylor (not pictured) – Founder and Managing Partner of Richmond Hill Investment Co., LP. Mr. Taylor spent 10 years at Greenhill & Co., Inc., most recently as a Principal. Mr. Taylor earned a B.B.A. in Finance with Honors from the University of Texas at Austin in 1998. Mr. Taylor is an Affiliated Director. 6 David Beatty Kim E. Sims |
 PORTFOLIO *MHI Hospitality Corporation Trades on the NASDAQ® Under the Symbol MDH |
 Crowne Plaza Hampton Marina Crowne Plaza Hollywood Beach Crowne Plaza Jacksonville Riverfront Hilton Philadelphia Airport Hilton Philadelphia Airport Hilton Savannah DeSoto Hilton Wilmington Riverside Sheraton Louisville Riverside Holiday Inn Laurel West (DC Metro) 8 Crowne Plaza Tampa Westshore Doubletree by Hilton Raleigh Brownstone - University |
 Portfolio of 10 high-quality, primarily upper-upscale and upscale, full-service hotels concentrated in growth markets of the Mid-Atlantic and Southern U.S. MHI’s entire portfolio has been fully renovated to meet or exceed brand standards within the last six years and thus has minimal upcoming capital requirements. Executed all franchise license agreements within past 6 years. Poised to outperform market. Portfolio Summary AL FL SC TN KY IN OH NC PA ME VA NY CT WV MD NJ VT NH MA DE RI GA LA MS Portfolio Geography 42.5% 9 |
 Hilton Philadelphia Airport 4501 Island Avenue Philadelphia, PA 19153 331 Rooms www.hiltonphiladelphiaairport.com 10 |
 Hilton Philadelphia Airport 4501 Island Avenue Philadelphia, PA 19153 331 Rooms www.hiltonphiladelphiaairport.com 11 |
 Hilton Savannah Desoto 15 East Liberty Street Savannah, GA 31401 246 Rooms www.desotohilton.com 12 |
 Hilton Savannah Desoto 15 East Liberty Street Savannah, GA 31401 246 Rooms www.desotohilton.com 13 |
 Hilton Wilmington Riverside 301 N. Water Street Wilmington, NC 28401 272 Rooms www.wilmingtonhilton.com 14 |
 Hilton Wilmington Riverside 301 N. Water Street Wilmington, NC 28401 272 Rooms www.wilmingtonhilton.com 15 |
 Holiday Inn Laurel – West 15101 Sweitzer Lane Laurel, MD 20707 207 Rooms www.holidayinn.com IHG National Award Winner “Renovation of the Year Award” (2008) 16 |
 Crowne Plaza Riverfront 1201 Riverplace Blvd. Jacksonville, FL 32207 292 Rooms www.cpjacksonville.com 17 |
 Sheraton Louisville Riverside Hotel 700 West Riverside Drive Jeffersonville, IN 47130 180 Rooms www.sheratonlouisville.com 18 |
 Sheraton Louisville Riverside Hotel 700 West Riverside Drive Jeffersonville, IN 47130 180 Rooms www.sheratonlouisville.com Awarded the Tiffany Crystal Trophy for having the highest Overall Guest Satisfaction in all Sheratons in North America for 2009 19 |
 Crowne Plaza Hollywood Beach Resort 4000 South Ocean Drive Hollywood, FL 33019 311 Rooms www.cphollywoodbeach.com IHG National Award Winner “Developer of the Year Award” (2008) 20 Joint Venture with Carlyle Group |
 Crowne Plaza Hollywood Beach Resort 4000 South Ocean Drive Hollywood, FL 33019 311 Rooms www.cphollywoodbeach.com 21 |
 Crowne Plaza Tampa Westshore 5303 West Kennedy Blvd. Tampa, FL 33609 222 Rooms www.cptampawestshore.com IHG Award Winner (2009) 22 |
 Crowne Plaza Tampa Westshore 5303 West Kennedy Blvd. Tampa, FL 33609 222 Rooms www.cptampawestshore.com 23 |
 Crowne Plaza Hampton Marina Hotel 700 Settlers Landing Road Hampton, VA 23669 173 Rooms www.cphamptonmarinahotel.com 24 |
 Crowne Plaza Hampton Marina Hotel 700 Settlers Landing Road Hampton, VA 23669 173 Rooms www.cphamptonmarinahotel.com 25 |
 DoubleTree by Hilton Raleigh Brownstone-University 1707 Hillsborough Street Raleigh, NC 27605 190 Rooms www.brownestonehotel.com Renovated and Reflagged a DoubleTree by Hilton in 2011 26 Before |
 DoubleTree by Hilton Raleigh Brownstone-University 1707 Hillsborough Street Raleigh, NC 27605 190 Rooms www.brownestonehotel.com 27 Before |
 INDUSTRY AND MARKET DYNAMICS *MHI Hospitality Corporation Trades on the NASDAQ® Under the Symbol MDH |
 Following the worst industry decline in the past 80 years, hotel fundamentals hit bottom in Q1 2010. The remainder of 2010 and early 2011 represented the return of occupancy as operators focused on getting “heads in beds”. Mid 2011 saw occupancy stabilize and focus shifted to ADR as operators looked to increase the quality of their revenue; this trend continues and escalates as we move into the 2 nd full year of the recovery. 29 |
 30 Source: PKF Hospitality Research – December 2011. |
 PERFORMANCE *MHI Hospitality Corporation Trades on the NASDAQ® Under the Symbol MDH |
 During calendar 2011 MDH shares increased 10.19%. As of YE 2011, MDH shares were trading at $2.38/share or 5.5x adjusted FFO. For the second consecutive year, MDH’s stock price declined significantly during the late summer months; in 2011, the decline was the result of the US debt ceiling crisis as well as the CMBS market turmoil that led to a sell-off across all REITs and the market as a whole. In spite of the market-wide sell-off, MDH significantly outperformed its Lodging REIT peers in 2011. 32 |
 Source: SNL Financial 33 |
 Source: SNL Financial 34 MDH’s stock has performed well in the first quarter of 2012 – up 23.11% for the year. |
 Source: SNL Financial 35 |
 36 The majority of our portfolio recorded strong RevPAR growth in 2011 with most hotels outpacing their respective competitive sets and thereby gaining market share. |
 37 Source: Company Filings |
 38 2005 2011 Percent Change Shares & Units O/S 10,611,607 12,938,625 21.9% Total Assets 118,385,923 $ 209,299,446 $ 76.8% Available Rooms 1375 2113 53.7% Occupancy 69.6% 66.2% -4.9% ADR 103.34 $ 110.24 $ 6.7% RevPAR 71.96 $ 72.94 $ 1.4% Total Revenue 55,173,554 $ 81,172,504 $ 47.1% Adjusted EBITDA* 10,721,490 $ 17,052,262 $ 59.0% Adj. EBITDA/Share 1.01x 1.32x 30.4% Stock Price 9.65 $ 2.38 $ -75.3% Price/Adj. EBITDA 9.55x 1.81x -81.1% *Adjusted EBITDA adjusts for certain additional items including any unrealized gain (loss) on its hedging instruments or warrant derivative, impairment losses, losses on early extinguishement of debt, aborted offering costs, costs associated with departure of executive officers and acquisition transaction costs. |
 PEER COMPARISONS *MHI Hospitality Corporation Trades on the NASDAQ® Under the Symbol MDH |
 40 Source: SNL Financial In terms of EBITDA generated per share, MDH ranks in the middle of the pack, in line with the average of median among all lodging REITs. |
 41 MDH ranks in the bottom 30% in terms of Debt/Key showing our conservative leverage when compared to the size of our portfolio Note: Does not include Preferred Stock Source: SNL Financial |
 42 Source: SNL Financial MDH ranks 2 nd to last in terms of Enterprise Value per Key, a sign of our undervaluation when compared to the size of our portfolio |
 43 MDH ranks in the bottom 25% in terms of Enterprise Value/EBITDA – this represents the significant undervaluation of MDH’s common stock. Source: SNL Financial |
 44 By applying the average and median EV/EBITDA ratios to MDH in order to get an implied stock price, this equates to a value range of approximately $9.50-$10.50 per share. Given this methodology, MDH stock is currently trading at an approximate 70% discount to fair valuation when compared to our public lodging REIT peers. Below we have applied a wider range of ratios, which still reflects a significant discount to fair value. Source: Company Filings 14.0x 4.74 $ 15.0x 5.90 $ 16.0x 7.07 $ 17.0x 8.24 $ 18.0x 9.40 $ *Peer Median (approx.) 19.0x 10.57 $ *Peer Average (approx.) EV/EBITDA Multiple Implied Stock Price |
 STRATEGIC EFFORTS AND GROWTH *MHI Hospitality Corporation Trades on the NASDAQ® Under the Symbol MDH |
 46 Recent Developments: 2011 Preferred Stock and Warrant Issuance $25.0 m Gross Proceeds used to pay down Syndicated Credit Facility Avoided dilutive equity issuance 2011 Bridge Loan $10.0 m reserved for liquidity enhancement and to facilitate the refinancing of other indebtedness Currently $1.5M drawn Syndicated Credit Facility Paid off in QIV 2011 (Crowne Plaza Tampa unencumbered) |
 47 MHI looks to continue efforts to lower its cost of capital through strategic balance sheet restructuring. The following are our objectives and indicative terms that we believe will be available to us: Refinance Crowne Plaza Tampa Westshore: Q2 2012 Goal (June) $14.0 m gross proceeds 5.0-6.0% fixed rate 25 year amortization No prepayment penalty Use of proceeds: pay down Bridge and Preferred (potential modification to Preferred to repay at reduced premium) Refinance Jacksonville Crowne Plaza Riverfront: Q2 2012 Goal LIBOR+300 floating rate without floor 25 year amortization Replace current $14.0 m, 8.0% rate loan Extend Crowne Plaza Hampton loan : Q2 2012 Goal |
 48 Over the past four quarters, MDH has shifted the vast majority of its debt maturities to 2016, 2017 and beyond; locking in historically low interest rates for the next 5 years. |
 49 In 2011, we reinstated distributions of common dividends to share and unit holders in the amount of $0.08/share on an annualized basis. We paid $0.02/share to holders of record on September 15, 2011, December 15, 2011 and March 15, 2012. Average yield on the common dividend was 3.36% in 2011. *2011 dividend is annualized |
 50 Our yield in 2011 placed us in the top 50% of lodging REITs and compared favorably to all REITS. Many competitors have not yet reinstated dividends. We were able to do so while concurrently restructuring our balance sheet without raising dilutive equity. Our strategy focuses on paying a competitive and sustainable dividend while simultaneously growing and maintaining a ‘common sense’ level of liquidity that also meets the demands of our various financing agreements. We believe that we can raise the common dividend in the second half of 2012. |
 51 Restart Acquisition Activity: Pursue Joint Venture acquisitions on an “earn out” basis “Unit” transactions with interested sellers Recycle capital through disposition of non-core assets in our portfolio Our Holiday Inn Laurel (MD) West hotel is one such asset. It is our stated strategy to move away from the midscale segment; this is the only midscale property remaining in our portfolio |
 MANAGEMENT INITIATIVES *MHI Hospitality Corporation Trades on the NASDAQ® Under the Symbol MDH |
 Improved Customer Service: In 2012, we will continue to challenge our manager to pursue a strong culture of guest service. Earnings quality starts with satisfied guests, who not only grade our hotels well, but who also become repeat customers. RevPAR Fair Share Capture: STR provides a “fair share” RevPAR analysis that we use to benchmark performance next to a comparable set of hotels in our respective markets. Capturing fair share is essential to superior earnings. Each of our hotels has a targeted “fair share” and in 2012, we seek to focus on hotels that have an opportunity to increase share. AFFO Target: Our goal is to improve Adjusted Funds from Operation (“AFFO”) by approximately 21% at the mid-point of the guidance range over prior year; from ±43¢/share in 2011 to 45¢-67¢/share in 2012. [AFFO excludes non-cash accruals and extraordinary items.] 53 |
 Dividend Expansion. A consistent and growing dividend is essential to support our share valuation. Our goal for 2012 is to continue to pay a conservative yet competitive dividend. We look to increase the dividend during the 2 nd half of 2012. Lowered Cost of Capital: Our ongoing balance sheet efforts will lower our cost of capital, remove risks associated with certain financing instruments, and extend our maturities. Restart Growth: Growing our portfolio, both through targeted internal investments and strategic acquisitions, is essential to support an increase in our stock price. Examples include: In 2011, we rebranded the Raleigh Holiday Inn to DoubleTree, moving the hotel’s classification from mid-scale to upscale. RevPar growth is expected from this investment. In 2011, we constructed and opened a new restaurant, Mojito, at our Tampa asset that provides an enhanced level of guest service. For a nominal investment of +/-$600k, we expect a significant increase in the hotel's F&B revenues. During 2012, our goal is to complete at least one hotel acquisition either through an outright purchase, a joint venture, or as a contributed asset. 54 |
 This presentation includes disclosure of non-GAAP measures, including funds from operations (“FFO”), adjusted FFO (“AFFO”), earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted EBITDA and hotel EDITDA. The Company considers FFO, AFFO, EBITDA, adjusted EBITDA and hotel EBITDA to be key supplemental measures of the Company’s performance, and they should be considered along with, but not as alternatives to, net income as a measure of the Company’s operating performance. None of FFO, AFFO, EBITDA, adjusted EBITDA and hotel EBITDA represent cash generated from operating activities determined by GAAP and should not be considered as alternatives to net income, cash flow from operations or any other operating performance measure prescribed by GAAP. None of FFO, AFFO, EBITDA, adjusted EBITDA and hotel EBITDA are measures of the Company’s liquidity, nor are FFO, AFFO, EBITDA, adjusted EBITDA and hotel EBITDA indicative of funds available to fund the Company’s cash needs, including its ability to make cash distributions. Please refer to the Company’s filings with the SEC and its earnings releases, which are available at www.mhihospitality.com, for disclosure of the Company’s net income, for reconciliations of FFO, AFFO, EBITDA, adjusted EBITDA and hotel EBITDA to net income and for additional detail on the Company’s use of non-GAAP measures. 55 Non-GAAP Financial Measures |
 QUESTIONS? *MHI Hospitality Corporation Trades on the NASDAQ® Under the Symbol MDH |