NetEffect Alliance, the IT subsidiary of Interstate Hotels & Resorts (NYSE: IHR), today announced that Sonesta Hotels International, Host Marriott and Benchmark Hospitality had joined NetEffect’s telecommunications alliance to receive premium telecommunications services at significant cost savings. NetEffect Alliance provides packaged and customized IT products and telecommunications services for the hotel industry using the expertise and buying power of parent company Interstate Hotels & Resorts, the nation’s largest independent hotel management company.
Boston-based Sonesta Hotels expects that NetEffect Alliance’s lower-cost long distance service will help improve operating margins at its domestic upscale properties. “Particularly in this challenging economic environment, finding new ways to reduce costs wherever possible is of paramount importance,” said Carol Beggs, vice president of Sonesta’s IT Department. “NetEffect’s telecommunications alliance offers rates at significantly lower price points than we could have negotiated on our own. But the most pleasant surprise was the high level of support we received from them. We were in the middle of moving to new corporate offices, and they managed the entire conversion process for us, really going above and beyond our expectations. We hope to find other ways to take advantage of NetEffect Alliance’s purchasing power and industry expertise.”
Host Marriott, which recently joined NetEffect Alliance’s telecommunications alliance, expects to realize significant savings across a broad range of telecommunications services. The company already has converted the phone system in its new corporate headquarters to NetEffect Alliance.
Benchmark Hospitality, with corporate offices in Houston, operates luxury resorts, hotels, and conference centers throughout the United States and in Canada and Japan. “We began our partnership with NetEffect Alliance in April 2002,” said Rodney Thiel, Benchmark Hospitality vice president of information technology. “We saw a great opportunity with them to reduce our overall long distance costs based on the pricing structure they proposed, which is the lowest I have seen. We now have implemented their solution in multiple locations, which is translating into substantial savings. One location is estimating annual savings of $50,000 to $60,000.”
“The concept of increased buying power through volume purchasing is not new,” said Brian Garavuso, Interstate Hotels & Resorts’ chief technology officer and head of NetEffect Alliance. “What we’ve added to the mix is our unique understanding of the specific needs of the hospitality industry. Interstate Hotels & Resorts operates more than 400 hotels and resorts, and we know from years of experience what works and what doesn’t.”
Garavuso said that NetEffect Alliance is developing additional products to provide the hotel industry with a full tool kit of products that are cost-effective and easy to use and make hotels more efficient and manageable.
NetEffect Alliance provides a growing array of packaged and customized IT products for the hotel industry, ranging from Web design for an individual hotel or resort, to designing, installing and maintaining a complex property management system, as well as providing low-cost telecommunications services. NetEffect Alliance uses the purchasing power and cutting-edge expertise of Interstate Hotels & Resorts and offers services from offices in Washington, D.C.; Fort Myers, Fla.; and Dallas, Texas. For more information about the company, visit its Web site: www.neteffectalliance.com.
Interstate Hotels & Resorts operates more than 400 hospitality properties with approximately 86,000 rooms in 45 states, the District of Columbia, Canada and Russia, including 55 properties managed by Flagstone Hospitality Management, a subsidiary of Interstate Hotels & Resorts. BridgeStreet Corporate Housing Worldwide, an Interstate Hotels & Resorts subsidiary, is one of the world’s largest corporate housing providers, offering upscale, fully furnished corporate housing throughout the United States, Canada, the United Kingdom, France and 39 additional countries through its network partners. For more information about Interstate Hotels & Resorts, visit the company’s Web site: www.ihrco.com.
This press release contains “forward-looking statements,” within the meaning of the Private Securities Litigation Reform Act of 1995, about Interstate Hotels & Resorts, including those statements regarding future operating results and the timing and composition of revenues, among others, and statements containing words such as “expects,” “believes” or “will,” which indicate that those statements are forward-looking. Except for historical information, the matters discussed in this press release are forward-looking statements that are subject to certain risks and uncertainties that could cause the actual results to differ materially, including the current slowdown of the national economy, economic conditions generally and the real estate market specifically, the impact of the events of September 11, 2001, legislative and regulatory changes, availability of debt and equity capital, interest rates, competition, supply and demand for lodging facilities in our current and proposed market areas, and the company’s ability to manage integration and growth. Additional risks are discussed in Interstate Hotels & Resorts’ filings with the Securities and Exchange Commission, including Interstate Hotels & Resorts’ annual report on Form 10-K for the year ended December 31, 2001 and joint proxy statement and prospectus, filed on July 2, 2002.

——-