Prime Hospitality Corp. Reports Second Quarter Results

Prime Hospitality Corp.
(NYSE: PDQ), a leading hotel owner, operator and franchisor, reported its
results for the second quarter and six months ended June 30, 2002.
  Net income before asset transactions and other charges for the second
quarter was $6.1 million, or $.13 per share, compared to $11.7 million, or
$.26 per share, for the second quarter of 2001.

Net income before asset transactions and other charges for the second
quarter was $6.1 million, or $.13 per share, compared to $11.7 million, or
$.26 per share, for the second quarter of 2001.

Income before extraordinary items was $3.4 million, or $.07 per share, for
the second quarter of 2002.  Non-recurring items in the second quarter of 2002
were comprised primarily of a $4.5 million pre-tax litigation charge.  For the
second quarter of 2001, income before extraordinary items was $20.7 million,
or $.45 per share.  Non-recurring items in the second quarter of 2001
consisted primarily of the recognition of deferred gains on the termination of
four leases.

For the second quarter of 2002, Prime also reported an extraordinary loss
of $7.9 million, net of tax, related to the premium associated with the
retirement of the Company`s $200 million 9-3/4% Senior Subordinated Notes.

“Our results continue to be affected by the softness in business transient
demand,” said A.F. Petrocelli, Chairman and CEO of Prime.  “Despite this
difficult environment, our cost control programs were effective at both the
property and corporate level.

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“During the quarter, we continued to grow our brand infrastructure.  Our
new rewards program has contributed a 50% increase in revenues from frequent
guests over last year.  We also began development of our own proprietary
reservation system, which is scheduled to open in the fourth quarter of 2002.
The new reservation center should enable us to improve service levels and
provide us with enhanced customer data.

“We have also made considerable improvements in our capital structure.  In
April, we refinanced our Senior Subordinated Notes with a new $200 million
issue priced at 8-3/8%.  In July, we closed on a new $125 million revolving
credit facility, which will fund the redemption of our 9-1/4% First Mortgage
Notes.  These new issues will result in significant interest savings and
provide us with the financial flexibility to grow our company.”

For the six months ended June 30, 2002, net income before asset
transactions and other charges was $6.5 million, or $.14 per share compared to
$21.3 million, or $.46 per share, for the first half of 2001.  Income before
extraordinary items was $4.2 million, or $.09 per share, for the first six
months of 2002.

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