Prime Hospitality Corp.
(NYSE: PDQ) today reported income before asset transactions of $11.6 million,
or $.24 per share, in the fourth quarter of 1999 compared to income before
asset transactions of $11.8 million, or $.22 per share, in 1998.  Earnings per
share for the fourth quarter of 1999 reflects approximately 4.7 million fewer
weighted average shares outstanding as compared to the prior year`s quarter as
a result of the Company`s stock repurchase program.

“We are proud of our accomplishments over the past quarter,” said A.F.
Petrocelli, chairman and CEO of Prime.  “Despite cutbacks in travel due to Y2K
fears, we achieved a 3.1% REVPAR increase over last year.  We also made
significant strides in developing our brands.  We have now executed over
50 AmeriSuites franchise agreements and recently celebrated the opening of our
first franchisee constructed AmeriSuites in Grapevine, Texas.  In November, we
successfully completed the conversion of 38 HomeGate hotels to the Wellesley
Inn & Suites brand and we believe this will improve franchising prospects for
this brand.

“During the quarter, we also generated $14 million from asset
divestitures,” said Petrocelli.  “We expect our next scheduled asset sale, the
Frenchman`s Reef Marriott hotel in St. Thomas, to close in mid-February.  With
the proceeds from asset sales, in the past year we have repurchased over
6 million shares and reduced our debt by $50 million.  We continue to believe
our strategy of focusing on brand growth, reducing our real estate holdings
and utilizing excess cash to repurchase stock and reduce debt is the best
course for our company.”

For the quarter, revenues increased by 8.6% to $132.6 million from
$122.1 million in the same period in the prior year and earnings before
interest, taxes, depreciation and amortization (EBITDA) increased by 12.1% to
$40.8 million from $36.4 million in the prior year.  Total net income, which
also includes income from property transactions and special charges, was
$11.0 million, or $.22 per share, as compared to $11.0 million, or $.20 per
share, for the fourth quarter of 1998.

For the year, revenues increased by 17.8% to $552.7 million from
$469.4 million and EBITDA increased by 19.5% to $177.2 million from
$148.3 million in the prior year.  For 1999, Prime reported income before
asset sales and special charges of $54.4 million, or $1.05 per share, compared
to $53.4 million, or $1.00 per share for 1998.  Total net income, which
includes gains on sales of assets, special charges and the cumulative effect
of a change in accounting principle in 1999, was $34.9 million, or $.67 per
share, for 1999 compared to $53.8 million, or $1.00 per share, for the same
period in 1998.

Hotel Operations:

Prime`s comparable owned hotels achieved a 3.1% revenue per available room
(REVPAR) growth rate over the same quarter in 1998.  The comparable owned
AmeriSuites hotels generated a 2.5% REVPAR increase, as average daily rates
(“ADR”) remained relatively stable during the quarter at $80.81, and occupancy
advanced by two percentage points to 63.1%.  The remaining AmeriSuites, which
have been open for less than a full year, achieved a $77.31 ADR and a 56.1%
occupancy rate.  The comparable owned full-service hotels achieved a 6.2%
REVPAR increase over the same quarter in 1998, as ADR increased by 3.6% to
$105.16 and occupancy increased by one percentage point to 69.5%.  Prime`s
Wellesley Inns, all of which are comparable, reported a REVPAR equal to the
prior year`s quarter as ADR increased by 4.5% to $59.65, and occupancy
decreased by three percentage point to 66.5%.  The Wellesley Inn & Suites
hotels, which were converted from the HomeGate brand in November, achieved a
$57.46 ADR and a 48.8% occupancy rate.

Brand Development:

Prime currently has 98 AmeriSuites and 66 Wellesley Inn & Suites hotels in
operation and intends to further expand its brands, primarily through
franchising.  The Company has generated a significant degree of interest in
its AmeriSuites brand with 20 new AmeriSuites franchise agreements signed
during the quarter.  Since it received approval to begin franchising in mid
1998, Prime has executed 54 new franchise agreements and has 16 applications
pending.

In January 2000, the first AmeriSuites hotel constructed by a franchisee
opened in Grapevine, Texas.  Currently, seven other franchised AmeriSuites are
under construction with four to five additional sites scheduled to begin
construction by the end of the quarter.  The Company has also resumed
corporate development with the construction of AmeriSuites hotels in the
Baltimore and Orlando markets and is reviewing plans to construct AmeriSuites
on sites it already owns in the Detroit, San Jose and San Francisco areas.
 
In November, Prime converted 38 of its 43 HomeGate Studios & Suites to its
Wellesley Inn & Suites brand.  Prime believes that the conversion will create
efficiencies by adding critical mass to the Wellesley chain, improving
franchising prospects and enhancing cash flow at existing hotels by shifting
the customer focus from extended stay to transient.  The Company also intends
to convert three other hotels in operation to its Wellesley chain.

 
Other Events:
During the quarter, Prime generated approximately $14 million from the
sales of one AmeriSuites hotel and two land parcels.  Prime has several other
potential AmeriSuites hotel sales under negotiation and plans to utilize
future proceeds from asset sales for the repurchase of stock and/or the
reduction of debt.  Additionally, Prime is scheduled to close on the sale of
the Frenchman`s Reef Marriott hotel in St. Thomas U.S.V.I. in mid-February.
Other assets under contract for sale include the remaining five Homegate
hotels which were not part of the Wellesley conversion.

During the quarter, the Company completed a stock repurchase program which
provided for the purchase of $50 million of the Company`s stock.  In October
1999, the Company`s Board of Directors authorized the repurchase of an
additional $100 million of its stock.  The Company and its bank group have
also amended the terms of the Company`s revolving credit facility to allow for
future stock repurchases equal to 50% of the proceeds from asset sales in an
aggregate purchase amount not to exceed $100 million.  Under this plan, the
Company has repurchased approximately 800,000 shares to date at a total cost
of $7.0 million, the maximum amount permitted based on asset sale proceeds
from the date of the amendment.  In the past year, the Company has repurchased
6.1 million shares of its stock at an average price of $9.25 per share under
both plans.

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