CNL Hospitality Properties, Inc., an Orlando-based real estate investment
trust, today announced that it has signed a contract to acquire KSL
Recreation Corporation, one of the nation’s leading owners and operators
of upscale destination resorts. These premier properties include some of
the world’s most famous luxury hotels, golf resorts and spas in Hawaii,
California, Arizona, and Florida, including the Grand Wailea Resort Hotel
& Spa, the La Quinta Resort & Club, the Arizona Biltmore Resort & Spa and
the Doral Golf Resort & Spa. CNL Hospitality Properties, Inc. will acquire
100 percent of the outstanding stock of KSL for $1.366 billion. In
addition, the company will assume long-term debt in the amount of $794
million. “We are very excited to add such distinguished hotels to our portfolio of
hospitality properties,” said Thomas J. Hutchison III, Chief Executive
Officer of CNL Hospitality Properties, Inc. “The acquisition of these
premium properties—which are well managed and beautifully maintained—
fits perfectly with our strategy of building a highly diversified,
world-class portfolio of hotels and resorts. It’s a wonderful opportunity
for us. We see signs that the travel sector is strengthening, and we think
this is the right time to invest in such outstanding properties as a
further step in our strategy to build long-term value for our investors.”

Hutchison added, “These properties are renowned for their high levels of
service in meeting their discriminating guests’ needs. The associates of
KSL have been an essential ingredient in establishing this preeminent
reputation, and we look forward to a seamless transition with them.”

Michael S. Shannon, President and CEO of KSL, said, “Our hotels are
wonderful destinations for discerning travelers and have performed well
within our portfolio. We have long admired CNL and its experienced
management team, and we have every confidence that in CNL’s hands, these
properties will continue to perform well and maintain their wonderful
sense of history and reputation for excellent service.”

KSL is a La Quinta, California-based owner and operator of luxurious
destination resorts with a reputation of offering some of the most
memorable lifestyle and recreation experiences in the world. The acquired
resorts include:

—Grand Wailea Resort & Spa on Maui—Encompassing 40 oceanfront acres
at the base of Maui’s breathtaking Mount Haleakala, the Grand Wailea
offers 780 luxury hotel rooms, six restaurants, impressive meeting space,
and a 50,000-square-foot European-style spa and fitness center that is
consistently ranked one of the best spas in the “U.S. by Travel &
Leisure,” “Conde Nast Traveler” and “Mobil Travel Guide.”

—La Quinta Resort & Club and PGA WEST in La Quinta, California—
Renowned for its charm and serenity, this landmark Southern California
resort offers the only U.S. destination golf resort with nine acclaimed
courses, designed by some of golf’s most prestigious names: Nicklaus,
Palmer, Weiskopf, Dye and Norman. Set against the backdrop of the Santa
Rosa Mountains, this fully integrated golf and spa resort stretches across
2,181 acres near Palm Springs, California.

—Doral Golf Resort & Spa in Miami, Florida—This legendary destination
golf and spa resort offers 692 newly renovated guest rooms and suites and
a 50,000-square-foot world-class European-style spa as well as 92,000
square feet of conference space, a fitness center, eight retail and five
food and beverage outlets, seven swimming pools and 11 tennis courts.
Famous for its Blue Monster golf course, the Doral hosts the popular Ford
Championship tour each spring.

—The Arizona Biltmore Resort & Spa in Phoenix, Arizona—Known
throughout the world as the “Jewel of the Desert,” the Arizona Biltmore
provides a restful oasis on 39 acres covered with lush gardens, glistening
swimming pools and Frank Lloyd Wright-influenced architecture. Due to its
exceptional accommodations, luxurious spa services, and outdoor
diversions, the resort has a 70-year history of accommodating renowned
businesspeople, celebrities and leaders, including every U.S. president
since Herbert Hoover.

—The Claremont Resort & Spa in Berkeley, California—Situated amid 22
beautifully landscaped garden acres overlooking San Francisco Bay, the
Claremont’s elegantly appointed guest rooms and common areas offer
panoramic views of the bridges and skylines of San Francisco. Adding to
its pre-eminent location are the Spa Claremont, which “Vogue” magazine
ranked as one of the best urban spas in the U.S., and a stylish pool and
tennis club with extensive workout and training facilities.

—Lake Lanier Islands Resort near Atlanta, Georgia—Set on the
picturesque shores of Lake Sidney Lanier is Lake Lanier Islands, Georgia’s
most visited lakeside resort destination. The year-round 1,100-acre resort
boasts a variety of amenities and attractions including the 216-room
Emerald Pointe Resort, 21,000 square feet of conference facilities, 30 New
England- style lakeside cottages, a water park, and 18 holes of
championship golf.

In December 2003, CNL Hospitality Properties, Inc. acquired the legendary
Hotel del Coronado in California through a joint venture partnership with
KSL. The classic 688-room resort, built in 1888, is situated along 31
beachfront acres on the island of Coronado in San Diego. Affiliates of KSL
will continue to own a minority stake in the Hotel del Coronado and manage
the property, in addition to owning and managing the famed La Costa Resort
& Spa in Carlsbad, California.

CNL Hospitality Properties, Inc. was advised by UBS Investment Bank and
Greenberg Traurig, LLP. KSL Recreation Corporation was advised by Goldman,
Sachs & Co., Simpson Thacher & Bartlett LLP and Allen Matkins Leck Gamble
and Mallory LLP. In addition, an affiliate of Deutsche Bank AG has
committed to provide financing to CNL Hospitality Properties, Inc. for a
portion of the transaction.

The transaction is expected to close in mid-April 2004. The acquisition is
subject to customary closing conditions, and there are no assurances that
all of the closing conditions will be satisfied or that these facilities
will be acquired by CNL Hospitality Properties, Inc.

CNL Hospitality Properties, Inc. is an affiliate of CNL Financial Group,
Inc. and specializes in the investment of quality hotels and resorts. CNL
Hospitality Properties, Inc. owns interests in a portfolio of 130 hotels
with more than 29,000 rooms featuring 19 nationally recognized hotel
brands in 37 states and Canada. Headquartered in Orlando, Florida, CNL
Financial Group, Inc. is one of the nation’s largest, privately held real
estate investment and finance companies. CNL Financial Group, Inc. and the
entities it has formed or acquired have over $9.5 billion is assets,
representing more than 4,000 properties in 49 states and Canada. For
additional information, please visit http://www.cnlonline.com/hospitality.
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