Cendant Hotel Group Signs Franchise Deal for Russia

Cendant Corp.‘s Hotel Group
today announced the signing of a deal with Hermitage Hospitality Ltd. to
franchise Days Inn hotels in Russia and the other 14 countries of the
former Soviet Union.
The lodging franchise agreement covers the nations of Estonia, Latvia and
Lithuania as well as all 12 countries that make up the Commonwealth of
Independent States: Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan,
Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine and
Uzbekistan.

Hermitage Hospitality, a privately held company with offices in Moscow,
has committed to develop more than 45 Days Inn hotels during the next five
years under a master license agreement. The company believes its network
of Days Inn hotels in Russia will generate more than $195 million in gross
revenue during the first five years.

Michael Schiff, vice president of international strategy and development
for Cendant’s Hotel Group, said the lack of quality economy and midscale
hotels in the former Soviet Union presents a “substantial opportunity” for
franchising Days Inn hotels there.

“Hermitage Hospitality will focus its efforts on providing consistent,
high-quality economical lodging to the emerging middle class of the former
Soviet Union as well as to the growing number of business and leisure
travelers from both the West and the East,” he said.

In looking for a master franchisee, Cendant sought financial strength and
a track record of business success, Schiff said. “Hermitage Hospitality is
the right company at the right time to lead an aggressive Days Inn
development campaign in the former Soviet Union.”

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Noting the need for quality economy hotels in Russia and the former Soviet
Union, John Eaton, president of Hermitage Hospitality, said the Days Inn
brand will be a “welcome addition” to the lodging market there because of
its global reputation for providing consistent quality accommodations at
economical prices.

“By entering into a master license agreement with Cendant, we have access
to proven operating standards and world-class marketing and sales
services,” he said. “Coupled with Hermitage’s management expertise in
Russia and the former Soviet Union, we are well-positioned for the rapid
development of Days Inn hotels in the region.”

This agreement marks the second major overseas initiative involving the
Days Inn chain during the last 12 months. In December 2003, Cendant’s
Hotel Group signed a master license agreement to franchise Days Inn hotels
in China with Frontier Group Pte Ltd., a privately held company based in
Singapore. The deal calls for the development of more than 40 Days hotels
during the first five years.
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