MeriStar Hospitality Corporation (NYSE: MHX), the nation`s third largest hotel real estate investment trust (REIT), today announced that its board of directors had unanimously approved the proposed merger between MeriStar Hotels & Resorts (NYSE: MMH) and Interstate Hotels Corporation (NYSE: IHCO).
Upon approval by the merging companies` shareholders and appropriate regulatory bodies, the newly merged company will retain a paper clip relationship with the REIT and will continue to manage all 112 of the REIT`s hotels.

“Greater size will enable the merged management company to become more efficient, provide more services and programs, and generate greater returns for its hotel owners,” said Paul W. Whetsell, chairman and CEO of MeriStar Hospitality. “The paper clip structure has proven to be successful for MeriStar in both strong and difficult economies,” he noted. “A larger, better capitalized management entity will allow us to benefit from greater marketing and operating synergies, as well as expand our guest base. In addition, Interstate has a great reputation, and we look forward to the added expertise they will bring to our properties.”

Whetsell pointed out that he and John Emery, who is both the REIT`s and MeriStar Hotels & Resorts` president and chief operating officer, will continue in the same roles in both companies, allowing for strong management continuity. “We don`t foresee any changes in our operations. Both the REIT and operating company have participated in mergers or acquisitions in the past with positive results for both organizations. We expect the same following this merger.”

MeriStar Hospitality Corporation owns 112 principally upscale, full-service hotels in major markets and resort locations with 28,653 rooms in 27 states, the District of Columbia and Canada. The company owns hotels under such internationally known brands as Hilton, Sheraton, Marriott, Westin, Radisson and Doubletree. For more information about MeriStar Hospitality, visit the company`s Web site at www.meristar.com.

This press release contains “forward-looking statements,” within the meaning of the Private Securities Litigation Reform Act of 1995, about the Companies, 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 effects of the events of September 11, 2001, and the downturn in the economy and the potential de-listing of MeriStar Hotels & Resorts by the NYSE. Additional risks are discussed in the Companies` filings with the Securities and Exchange Commission, including the Companies` annual reports on Form 10-K for the year ended December 31, 2001.

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