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Fairmont Completes Sale in Kea Lani Maui

Fairmont Hotels & Resorts today announced that it has
completed the sale of its real estate interest in The Fairmont Kea Lani
Maui to Host Marriott Corporation (“HMT”) for $355 million, or $789,000
per room. The resort will continue to be known as The Fairmont Kea Lani
Maui and will be managed by Fairmont under the existing long-term
management contract. FHR expects to reinvest a portion of the proceeds in additional hotels
over the course of the next year. The Company also intends to use the sale
proceeds to acquire the remaining interest in the Fairmont management
company, to increase its share purchases under its existing share
repurchase program and, in the interim, to reduce existing indebtedness.

“We are pleased to have been able to capitalize on our success with The
Fairmont Kea Lani Maui. This sale reinforces our strategy of acquiring
attractive assets, realizing the value created through improved
performance and then redeploying the capital to continue growing the
Company,” commented William R. Fatt, Chief Executive Officer of FHR. “We
look forward to working with such a well-respected hotel owner as Host
Marriott and hope this partnership is the first of many opportunities
between both companies.”

When the Company reports its second quarter results on July 22, FHR will
revise its 2004 earnings guidance to reflect the impact of this sale.