Newton, MA (May 12, 2003). Hospitality Properties Trust (NYSE: HPT) today announced that it has terminated Wyndham International's (AMEX: WBR) occupancy and operations of 12 Wyndham hotels.
HPT has two leases with WBR subsidiaries: one lease includes 15 Summerfield by Wyndham hotels; the second lease includes 12 Wyndham hotels. On April 1, 2003, WBR failed to pay rent due HPT under these leases. On April 2, 2003, HPT declared WBR in default and simultaneously exercised its rights to retain certain collateral security HPT held for the WBR lease obligations, including security deposits of $33 million (which were not escrowed) and capital replacement reserves totaling about $7 million (which were previously escrowed). On April 28, 2003, HPT terminated WBR's occupancy of the 15 Summerfield hotels and appointed Candlewood Hotel Company as manager of those hotels.
Earlier today, HPT terminated WBR's occupancy of the 12 Wyndham hotels. Starting today, these 12 hotels are being operated for HPT's account under a management agreement with Crestline Hotels & Resorts, Inc. Crestline Hotels & Resorts is a USA subsidiary of the Spanish hotel company Barcelo Corporacion Empresarial, S.A.
Commenting on the selection of Crestline Hotels & Resorts to manage the operations of the 12 Wyndham hotels, John G. Murray, president of HPT, made the following statement:
"Crestline Hotels & Resorts is one of the largest multi-brand, independent hotel management companies in the USA. HPT and Barcelo Crestline have a long and mutually successful business relationship in which an affiliate of Barcelo Crestline leases 14 hotels from HPT which are operated under various Marriott brands. HPT is confident that Crestline has the management expertise to stabilize and improve the operations of these 12 hotels."
HPT and WBR are currently negotiating concerning continuation of the Wyndham brand affiliation for these 12 hotels, at least for a transitional period. The new management contract between HPT and Crestline is terminable upon 30 days notice. HPT stated that it has not yet decided whether the best long-term affiliation for these hotels is with the Wyndham brand and Crestline management or with an alterative brand or manager. HPT has determined that its interests may be served by stabilizing these hotels and thereafter reconsidering these issues together with Crestline.
Hospitality Properties Trust is a real estate investment trust which owns 251 hotels located throughout the United States.
WARNING REGARDING FORWARD LOOKING STATEMENTS
THIS PRESS RELEASE CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND THE FEDERAL SECURITIES LAWS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON HPT'S PRESENT BELIEFS AND EXPECTATIONS, BUT THEY ARE NOT GUARANTEED TO OCCUR. FOR EXAMPLE, MR. MURRAY'S STATEMENT THAT CRESTLINE HOTELS & RESORTS MANAGEMENT WILL BE ABLE TO STABILIZE AND IMPROVE OPERATIONS AT THE 12 WYNDHAM HOTELS MAY NOT OCCUR. THE OPERATIONS OF THESE HOTELS MAY NOT IMPROVE AND MAY DETERIORATE. THESE UNEXPECTED RESULTS MAY OCCUR BECAUSE UNFORESEEN TRANSITION PROBLEMS DISRUPT HOTEL OPERATIONS, BECAUSE MARKET CONDITIONS DETERIORATE OR FOR OTHER REASONS. SIMILARLY, HPT MAY BE UNABLE TO REACH AGREEMENTS FOR THE FUTURE LONG TERM MANAGEMENT OR BRANDING OF THE HOTELS DISCUSSED IN THIS PRESS RELEASE. A CHANGE IN THE MANAGEMENT OR BRAND OF HOTELS MAY CAUSE THE FINANCIAL RESULTS OF THE HOTELS' OPERATIONS TO DECLINE. HPT EXPECTS THAT THE FINANCIAL RESULTS WHICH IT REALIZES FROM OPERATIONS OF THE HOTELS DISCUSSED IN THIS PRESS RELEASE WILL BE LESS THAN THE RENT HPT PREVIOUSLY RECEIVED FROM WBR FOR THESE HOTELS, AT LEAST FOR THE NEXT SEVERAL MONTHS AND PERHAPS THEREAFTER. THE TERMINATION OF WBR'S OPERATIONS OF THE HOTELS DISCUSSED IN THIS PRESS RELEASE MAY RESULT IN DISPUTES OR LITIGATION BETWEEN HPT AND WBR; AND LITIGATION MAY BE EXPENSIVE OR HAVE UNEXPECTED OUTCOMES. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS CONTAINED IN THIS PRESS RELEASE.