Interstate to Manage 22 Former RFS-Owned Hotels

Interstate Hotels & Resorts (NYSE: IHR), the nation`s largest independent hotel management company, today announced that it will manage 22 of the hotels that CNL Hospitality Properties, Inc. (CNL), a leading real estate investment trust (REIT) in the lodging industry, acquired in its recent merger with RFS Hotel Investors, Inc.
The properties previously were managed by Interstate`s Flagstone Hospitality Management subsidiary.
“By integrating the operations of the 22 hotels from our subsidiary, Flagstone Hospitality, into our core operating divisions, our new agreement with CNL provides an opportunity to increase the operating resources dedicated to the CNL properties and reduce their costs for our management services,” said John Emery, Interstate`s president and chief operating officer. “We have a long-standing relationship with CNL, and these contracts will bring the number of hotels we manage for them to 28.”
With the new arrangement, Interstate will fold the Flagstone organization into Interstate`s larger operation in Arlington, Va., and its accounting office in Dallas, closing Flagstone`s Memphis office. “There will be no changes at the property level, and the transition will be essentially transparent to our guests,” he added. “The significant cost reductions realized by the consolidation of Flagstone`s operations will allow Interstate to reduce CNL`s cost of management while maintaining the same level of profitability for Interstate achieved through the previous arrangement with Flagstone and RFS.”
With the signing of the CNL contracts, Interstate Hotels & Resorts now operates more than 300 hospitality properties with nearly 70,000 rooms in 42 states, the District of Columbia, Canada, Russia and Portugal. 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:
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, governmental actions, 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, 2002.