Prime Hospitality Corp. , announced today that it has entered into an
agreement with Hospitality Properties Trust for management of 24
AmeriSuites hotels and to manage and re-brand 12 additional hotels into
the Prime Hotels & Resorts family under a combined contract.
The 24 AmeriSuites hotels encompass the hotels that Prime had defaulted on
in lease payments to HPT on July 1, 2003. Prime has continued to manage
these hotels throughout negotiations. The 12 hotels being converted to the
Prime Hotels & Resorts brand were previously leased by Wyndham
International, Inc. until default on April 1, 2003. Afterwards, HPT
terminated Wyndham`s occupancy and assigned management to a third party.
The management agreement covers all 36 hotels and will run for 15 years
with Prime having two consecutive renewal options of 15 years each for all
hotels. The 36 hotels contain 5,250 rooms and are located in 19 states.
The agreement between Prime and HPT is effective on January 1, 2004 and
February 1, 2004, for AmeriSuites and Prime Hotels & Resorts respectively.
A listing of these hotels including locations, number of rooms and
available meeting space is attached hereto.
As part of the agreement, HPT will receive an owner`s priority return on
$26 million/year plus a share of operating results from these hotels.
Payment of royalty and management fees due to Prime will be subordinated
to the priority return of HPT, and payment of the $26 million/year
priority return will be guaranteed by Prime under a limited guarantee.
Also, as part of the agreement, HPT will provide $25 million during the
first two years to pay for re-branding and other capital improvements,
primarily for the 12 hotels converting to Prime Hotels & Resorts.
“The fact that we were not only able to maintain the management and brand
affiliation of the 24 AmeriSuites, but add 12 Prime Hotels & Resorts
franchises shows our commitment to our brands. In addition, we are pleased
to continue our relationship with HPT and appreciate their significant
investment in our brand strategy,” said A.F. Petrocelli, Chairman & CEO of
Prime. “With 15 Prime Hotels now scheduled for conversion next year along
with the one currently open, we have begun to grow this new brand on a
Prime Hospitality Corp. is one of the nation`s premiere lodging companies.
Inclusive to this agreement, Prime owns, manages and franchises more than
260 hotels throughout North America. The Company owns and operates three
proprietary brands that compete in different segments: AmeriSuites(R)
(all-suites), Wellesley Inns & Suites(R) (limited-service) and Prime
Hotels & Resorts (full-service). Also within its portfolio are owned
and/or managed hotels operated under franchise agreements with national
hotel chains including Hilton, Radisson, Sheraton, Holiday Inn and Ramada.
Prime can be accessed over the internet at
Statements in this press release, other than statements of historical
information, may constitute forward-looking statements pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of
1995. The words “believe”, “anticipate”, “project”, “expect”, “intends”,
“may result”, “will continue”, and words of similar impact identify
forward-looking statements. Forward-looking statements involve known and
unknown risks which may cause the Company`s actual results in future
periods to differ materially from expected results. These risks include
but are not limited to changes in economic conditions, supply and demand
changes for hotel rooms, competition within the lodging industry,
relationships with owners, franchisees and suppliers, the impact of
government regulations, the availability of capital, the ability to
attract and retain personnel and the impact of emerging technologies.
Prime undertakes no obligation to update the information set forth herein.
For further information regarding forward-looking statements and to some
of the factors and uncertainties affecting us, please refer to the
Company`s filings with the Securities and Exchange Commission (SEC) copies
of which are available from the SEC or may be obtained upon request from
All of the Prime Hotels & Resorts have restaurants, exercise areas, pools,
and other full service amenities.
Prime Hospitality editorial, based on news release distributed by PR Newswire