Hotel Online  Special Report

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WestCoast Hospitality Corporation Reports $1.7 million
Net Income for 2nd Qtr 2005; Red Lion
Brand is Building Momentum

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SPOKANE, Wash., July 28, 2005 - WestCoast Hospitality Corporation (NYSE: WEH) today announced results for the quarter ended June 30, 2005.

Hotel Statistics

In the second quarter of 2005, RevPAR (revenue per available room) for comparable system-wide hotels (hotels owned, leased, managed and franchised for at least one year) increased 8.5% over the 2004 second quarter level to $47.64. This increase was generated by a 2.9 point increase in average occupancy, to 64.7%, and a 3.7% increase in ADR (average daily rate), to $73.68. For hotels carrying the Red Lion brand, RevPAR increased 9.0% in the quarter, to $47.46, driven by a 3.2 point increase in average occupancy, to 65.5%, and a 3.8% increase in ADR, to $72.51.

Consolidated Company Performance

Total revenue from continuing operations in the second quarter was $44.2 million, up 6.5% from the comparable period in 2004. Revenues in the hotels division were higher as a result of increased RevPAR. Revenues for the entertainment division increased 42.6% to $2.6 million. Revenues for the real estate division were down 6.6% to $1.2 million.

For the second quarter of 2005, the net income was $1.7 million or $0.13 per share compared to net income of $0.8 million or $0.06 per share in the second quarter of 2004, an increase of 115%. This net income increase was primarily driven by positive flow-through from hotel operations. EBITDA (earnings before interest, taxes, depreciation and amortization) from continuing operations was up 10.8% in the quarter to $7.5 million. For the year to date, net loss applicable to common shareholders was $1.3 million ($0.11 per share), compared to a net loss of $1.9 million ($0.15 per share) for the same period in 2004.

Arthur M. Coffey, President and Chief Executive Officer, said, "The Red Lion brand is building momentum that is being reflected in our financial results. With our ongoing investments in our Red Lion hotels, the improved lodging market and our implementation of major brand initiatives, including our redesigned redlion.com website, we are optimistic that the company will continue to drive improved financial results. We intend to take advantage of this momentum to increase our development and franchising of Red Lion hotels."

Recent Events

On May 19, 2005, the shareholders of the company elected Ryland P. "Skip" Davis as a new director to replace Stephen Blank. Mr. Davis has been Chief Executive Officer of Providence Health Care since 1998 and Chief Executive Officer of Sacred Heart Medical Center in Spokane since 1996. He brings a wealth of strategic management experience to the company's board of directors.

On July 22, 2005, the company sold a 50% interest in its Kalispell Center retail and hotel complex located in Kalispell, Montana to GVD Commercial Properties, Inc., which has substantial experience in shopping center and retail development. G & B Real Estate Services, a division of WestCoast Hospitality Corporation, will continue to manage the retail component of Kalispell Center. WestCoast will lease back the hotel at Kalispell Center, which will be re-named the Red Lion Kalispell Hotel after undergoing a complete renovation and expansion.

In the last week, the company completed the sale of the Red Lion Inn in Aberdeen, Washington and the Red Lion ParkCenter Suites in Boise, Idaho. The aggregate sales price for these two transactions was approximately $15.8 million. The company currently has five additional hotel properties and one office building subject to purchase agreements. It anticipates closing sales on as many as five of these properties in the third quarter. Proceeds of these sales will be used to reinvest in the company's Red Lion hotels.

Hotels Division Performance

For the second quarter of 2005, the company reported hotel revenue from continuing operations of $39.4 million, up $2.1 million from the previous comparable quarter. Direct expenses increased $1.1 million to $30.4 million. RevPAR from continuing operations at owned and leased hotels was up 9.7% from the second quarter of 2004, generated by a 3.4 point increase in occupancy and a 4.1% increase in ADR. John Taffin, Executive Vice President, Hotel Operations, said, "Red Lion hotels continue to deliver increases in occupancy and ADR that are providing strong profit growth for our hotels. As we invest an additional $40 million in renovating our Red Lion hotels, we look forward to the positive impacts we expect these upgrades will bring. Guest reaction to renovations in the hotels has been very positive." The company has also completed installation of the new MICROS Systems, Inc. Opera property management system in 15 of its Red Lion hotels. This system shares a single database with the company's central reservations system, allowing for better management of rates and availability. "These property management systems and our redesigned redlion.com website further enhance our ability to manage reservations generated through electronic channels," said Mr. Taffin. He added, "The new tools position us very well to take advantage of the explosion of internet travel bookings."
 
 

WestCoast Hospitality Corporation
Consolidated Statements of Operations
(unaudited)
($ in thousands, except footnotes)

                        Three months ended June 30,
                             2005          2004      $ Change     % Change

    Revenue:
     Hotels                $39,423      $37,364       $2,059         5.5%
     Franchise and
      management               607          712         (105)      -14.7%
     Entertainment           2,613        1,833          780        42.6%
     Real estate             1,229        1,316          (87)       -6.6%
     Other                     348          313           35        11.2%

     Total revenues         44,220       41,538        2,682         6.5%

    Operating expenses:
     Hotels                 30,437       29,323        1,114         3.8%
     Franchise and
      management               165          257          (92)      -35.8%
     Entertainment           2,321        1,847          474        25.7%
     Real estate               890          777          113        14.5%
     Other                     246          206           40        19.4%
     Depreciation and
      amortization           2,881        2,600          281        10.8%
     Hotel facility and
      land lease             1,745        1,798          (53)       -2.9%
     Gain on asset
      dispositions, net       (119)        (208)          89        42.8%
     Undistributed
      corporate expenses     1,051          848          203        23.9%

     Total expenses         39,617       37,448        2,169         5.8%

    Operating income         4,603        4,090          513        12.5%

    Other income (expense):
     Interest expense       (3,598)      (3,657)          59         1.6%
     Minority interest in
      partnerships, net        (34)          (8)         (26)     -325.0%
     Other income
      (expense), net            90          124          (34)      -27.4%

    Income from continuing
     operations before
     income taxes            1,061          549          512        93.3%

    Income tax expense         279          135          144       106.7%

    Net income from
     continuing operations     782          414          368        88.9%

    Discontinued operations:
     Income from operations
      of discontinued
      business units, net of
      income tax expense
      of $577 and $211         951          391          560       143.2%

    Net income and income
     applicable to common
     shareholders           $1,733         $805         $928       115.3%
 

    EBITDA(1)               $9,479       $8,449       $1,030        12.2%
    EBITDA as a percentage
     of revenues(2)          18.4%        17.3%

    EBITDA from continuing
     operations(1)          $7,540       $6,806         $734        10.8%
    EBITDA from continuing
     operations(2)
     as a percentage
     of revenues             17.1%        16.4%

    (1)  The definition of "EBITDA" and how that measure relates to net income
         is discussed further in this release under Non-GAAP Financial
         Measures.  EBITDA represents net income (or loss) before interest
         expense, income tax benefit or expense, depreciation, and
         amortization. EBITDA is not intended to represent net income as
         defined by generally accepted accounting principles in the United
         States and such information should not be considered as an
         alternative to net income, cash flows from operations or any other
         measure of performance prescribed by generally accepted accounting
         principles in the United States. We utilize EBITDA because management
         believes that investors find it to be a useful tool to perform more
         meaningful comparisons of past, present and future operating results
         and as a means to evaluate the results of core on-going operations.
         EBITDA from continuing operations is calculated in the same manner,
         but excludes the operating activities of business units identified as
         discontinued.

    (2)  The calculation of EBITDA as a percentage of revenues is based upon
         total operating revenues, from both continuing and discontinued
         operations, of $51,601,000 and $48,936,000 for the three months ended
         June 30, 2005 and 2004, respectively.  EBITDA from continuing
         operations as a percentage of revenues is based upon the operating
         results of continuing business units as presented in the statements.
 

                      WestCoast Hospitality Corporation
                   Earnings Per Share and Hotel Statistics
                                 (unaudited)
                            (shares in thousands)

                                                  Three months ended June 30,
                                                       2005           2004
    Earnings per common share:
     Basic
      Income applicable to common shareholders
       before discontinued operations(1)               $0.06          $0.03
      Income from discontinued operations               0.07           0.03
      Income applicable to common shareholders         $0.13          $0.06

     Diluted
      Income applicable to common shareholders
       before discontinued operations(1)               $0.06          $0.03
      Income on discontinued operations                 0.07           0.03
      Income applicable to common shareholders         $0.13          $0.06

    Weighted average shares - basic                   13,092         13,046
    Weighted average shares - diluted(2)              13,416         13,335

    Key Comparable
     Hotel Statistics:   Three months ended June 30,
                             2005         2004       $ Change     % Change
    Combined (owned, leased,
     managed and franchised)(3)

      Average occupancy(4)   64.7%        61.8%
      ADR(5)                $73.68       $71.06        $2.62         3.7%
      RevPAR(6)             $47.64       $43.90        $3.74         8.5%
 

    (1)  The net income used to calculate the net earnings per share
         applicable to common shareholders before discontinued operations
         includes all dividends on the retired cumulative preferred shares if
         applicable for the period presented.

    (2)  For the three months ended June 30, 2005, 38,644 outstanding options
         to purchase common shares were considered dilutive,  of the 1,024,019
         options outstanding as of that date.  For the three months ended
         June 30, 2004, 3,596 outstanding options to purchase common shares
         were considered dilutive,  of the 675,445 options outstanding as of
         that date. In addition, the 286,161 convertible operating partnership
         ("OP") units were considered dilutive and are therefore included in
         the calculation of diluted weighted average shares for both those
         same periods.

    (3)  Includes all hotels owned, leased, managed and franchised for greater
         than one year by WestCoast Hospitality Corporation.
         No adjustment has been made for hotels classified as discontinued
         operations.

    (4)  Average occupancy represents total paid rooms divided by total
         available rooms.  Total available rooms represents the number of
         rooms available multiplied by the number of days in the reported
         period.

    (5)  Average daily rate ("ADR") represents total room revenues divided by
         the total number of paid rooms occupied by hotel guests.

    (6)  Revenue per available room ("RevPAR") represents total room and
         related revenues divided by total available rooms.
 

                      WestCoast Hospitality Corporation
                    Consolidated Statements of Operations
                                 (unaudited)
                      ($ in thousands, except footnotes)

                         Six months ended June 30,
                             2005         2004       $ Change     % Change

    Revenue:
     Hotels                $69,765      $67,431       $2,334         3.5%
     Franchise and
      management             1,418        1,321           97         7.3%
     Entertainment           5,418        5,418           --         0.0%
     Real estate             2,458        2,937         (479)      -16.3%
     Other                     633          575           58        10.1%

     Total revenues         79,692       77,682        2,010         2.6%

    Operating expenses:
     Hotels                 58,086       56,502        1,584         2.8%
     Franchise and
      management               262          463         (201)      -43.4%
     Entertainment           4,789        4,649          140         3.0%
     Real estate             1,728        1,705           23         1.3%
     Other                     462          412           50        12.1%
     Depreciation and
      amortization           5,720        5,076          644        12.7%
     Hotel facility and
      land lease             3,485        3,778         (293)       -7.8%
     Gain on asset
      dispositions, net       (307)        (396)          89        22.5%
     Undistributed
      corporate expenses     2,003        1,633          370        22.7%

     Total expenses         76,228       73,822        2,406         3.3%

    Operating income         3,464        3,860         (396)      -10.3%

    Other income (expense):
     Interest expense       (7,199)      (6,503)        (696)      -10.7%
     Minority interest
      in partnerships, net      15           43          (28)      -65.1%
     Other income, net          86          254         (168)      -66.1%

    Loss from continuing
     operations before
     income taxes           (3,634)      (2,346)      (1,288)      -54.9%

    Income tax benefit      (1,416)        (960)        (456)      -47.5%

    Net loss from
     continuing operations  (2,218)      (1,386)        (832)      -60.0%

    Discontinued operations:
     Income (loss) from
      operations of
      discontinued business
      units, net of income
      tax expense (benefit)
       of $456 and ($85)       828         (157)         985       627.4%

    Net loss                (1,390)      (1,543)         153         9.9%

    Preferred stock dividend    --         (377)         377       100.0%

    Loss applicable to
     common shareholders   $(1,390)     $(1,920)        $530        27.6%
 

    EBITDA(1)              $11,391      $11,073         $318         2.9%
    EBITDA as a percentage
     of revenues(2)          12.3%        12.2%

    EBITDA from continuing
     operations(1)          $9,285       $9,233          $52         0.6%
    EBITDA from continuing
     operations (2) as a
     percentage of revenues  11.7%        11.9%

    (1)  The definition of "EBITDA" and how that measure relates to net income
         is discussed further in this release under Non-GAAP Financial
         Measures.  EBITDA represents net income (or loss) before interest
         expense, income tax benefit or expense, depreciation, and
         amortization. EBITDA is not intended to represent net income as
         defined by generally accepted accounting principles in the United
         States and such information should not be considered as an
         alternative to net income, cash flows from operations or any other
         measure of performance prescribed by generally accepted accounting
         principles in the United States. We utilize EBITDA because management
         believes that investors find it to be a useful tool to perform more
         meaningful comparisons of past, present and future operating results
         and as a means to evaluate the results of core on-going operations.
         EBITDA from continuing operations is calculated in the same manner,
         but excludes the operating activities of business units identified as
         discontinued.

    (2)  The calculation of EBITDA as a percentage of revenues is based upon
         total operating revenues, from both continuing and discontinued
         operations, of $92,238,000 and $90,566,000 for the six months ended
         June 30, 2005 and 2004, respectively.  EBITDA from continuing
         operations as a percentage of revenues is based upon the operating
         results of continuing business units as presented in the statements.
 

                      WestCoast Hospitality Corporation
                   Earnings Per Share and Hotel Statistics
                                 (unaudited)
                            (shares in thousands)

                                                   Six months ended June 30,
                                                       2005           2004
    Earnings per common share:
     Basic
      Loss applicable to common shareholders
      before discontinued operations(1)               $(0.17)        $(0.14)
      Income (loss) on discontinued operations          0.06          (0.01)
      Loss applicable to common shareholders          $(0.11)        $(0.15)

     Diluted
      Loss applicable to common shareholders
       before discontinued operations(1)              $(0.17)        $(0.14)
      Income (loss) on discontinued operations          0.06          (0.01)
      Loss applicable to common shareholders          $(0.11)        $(0.15)

    Weighted average shares - basic                   13,085         13,035
    Weighted average shares - diluted(2)              13,085         13,035
 

    Key Comparable
     Hotel Statistics:   Six months ended June 30,
                             2005         2004        $ Change     % Change
     Combined (owned,
      leased, managed
      and franchised)(3)

       Average occupancy(4)  58.4%        56.2%
       ADR(5)               $71.37       $70.00        $1.37         2.0%
       RevPAR(6)            $41.70       $39.36        $2.34         5.9%

    (1)  The net income or loss used to calculate the net earnings or loss per
         share applicable to common shareholders before discontinued
         operations includes all dividends on the retired cumulative preferred
         shares if applicable for the period presented.

    (2)  For the six months ended June 30, 2005 and 2004, all 1,024,019 and
         675,455 options outstanding to purchase common stock were
         anti-dilutive and are therefore not included in the calculation of
         earnings per common share.  In addition, the 286,161 convertible
         operating partnership ("OP") units were anti-dilutive and are
         therefore not included in the calculation of diluted weighted average
         shares for those same periods.

    (3)  Includes all hotels owned, leased, managed and franchised for greater
         than one year by WestCoast Hospitality Corporation.
         No adjustment has been made for hotels classified as discontinued
         operations.

    (4)  Average occupancy represents total paid rooms divided by total
         available rooms.  Total available rooms represents the number of
         rooms available multiplied by the number of days in the reported
         period.

    (5)  Average daily rate ("ADR") represents total room revenues divided by
         the total number of paid rooms occupied by hotel guests.

    (6)  Revenue per available room ("RevPAR") represents total room and
         related revenues divided by total available rooms.
 

                        WestCoast Hospitality Corporation
                           Consolidated Balance Sheets
                                   (unaudited)
                       ($ in thousands, except share data)

                                                     June 30,     December 31,
                                                       2005           2004
    Assets:
     Current assets:
      Cash and cash equivalents                       $7,756         $9,577
      Restricted cash                                  3,468          4,092
      Accounts receivable, net                         9,093          8,464
      Inventories                                      1,779          1,831
      Prepaid expenses and other                       5,806          3,286
      Assets held for sale:
        Assets of discontinued operations             62,452         61,757
        Other assets held for sale                     1,599          1,599
           Total current assets                       91,953         90,606

    Property and equipment, net                      226,048        223,132
    Goodwill                                          28,042         28,042
    Intangible assets, net                            13,248         13,641
    Other assets, net                                  8,507          9,191

           Total assets                             $367,798       $364,612

    Liabilities:
     Current liabilities:
      Accounts payable                                $6,031         $4,841
      Accrued payroll and related benefits             5,154          4,597
      Accrued interest payable                           671            700
      Advance deposits                                   546            188
      Other accrued expenses                          11,499          7,322
      Long-term debt, due within one year              7,181          7,455
      Liabilities of discontinued operations          22,508         22,879
           Total current liabilities                  53,590         47,982

     Long-term debt, due after one year              124,393        125,756
     Deferred income                                   8,147          8,524
     Deferred income taxes                            16,592         15,992
     Minority interest in partnerships                 2,533          2,548
     Debentures due WestCoast Hospitality
     Capital Trust                                    47,423         47,423
           Total liabilities                         252,678        248,225

    Stockholders' equity:
     Preferred stock - 5,000,000 shares
      authorized; $0.01 par value; no shares
      issued or outstanding                               --             --
     Common stock - 50,000,000 shares
      authorized; $0.01 par value; 13,106,670
      and 13,064,626 shares issued and outstanding       131            131
     Additional paid-in capital, common stock         84,590         84,467
     Retained earnings                                30,399         31,789
           Total stockholders' equity                115,120        116,387

           Total liabilities and
            stockholders' equity                    $367,798       $364,612
 

                      WestCoast Hospitality Corporation
                     Consolidated Statement of Cash Flows
                                 (unaudited)
                               ($ in thousands)

                                                    Six months ended June 30,
                                                       2005           2004
    Operating activities:
     Net loss                                        $(1,390)       $(1,543)
     Adjustments to reconcile net loss
      to net cash provided by operating activities:
     Depreciation and amortization                     5,788          6,291
     (Gain) on disposition of property,
      equipment and other assets                        (214)          (396)
     Write-off of deferred loan fees                       5             --
     Deferred income tax provision                       600            500
     Minority interest in partnerships                   (15)          (120)
     Equity in investments                                30             (8)
     Compensation expense related to stock issuance        9             --
     Provision for (recovery of) doubtful accounts        73             (2)
     Change in current assets and liabilities:
      Restricted cash                                    612            432
      Accounts receivable                             (1,084)        (1,423)
      Inventories                                         83            105
      Prepaid expenses and other                      (2,788)        (3,736)
      Accounts payable                                 1,134           (824)
      Accrued payroll and related benefits               559            664
      Accrued interest payable                           (33)            19
      Other accrued expenses and advance deposits      4,778          3,908
     Net cash provided by operating activities         8,147          3,867

    Investing activities:
     Purchases of property and equipment              (8,276)       (15,094)
     Proceeds from disposition of
      property and equipment                              30             40
     Proceeds from disposition of investment              --             94
     Investment in WestCoast Hospitality Capital Trust    --         (1,403)
     Advances to WestCoast Hospitality Capital Trust     (20)        (2,065)
     Distributions from equity investee                  117            449
     Proceeds from collections under note receivable     480          1,718
     Other, net                                           92           (184)

      Net cash used in investing activities           (7,577)       (16,445)

    Financing activities:
     Proceeds from note payable to bank                   50         11,000
     Repayment of note payable to bank                   (50)       (11,000)
     Proceeds from debenture issuance                     --         47,423
     Repurchase and retirement of preferred stock         --        (29,412)
     Proceeds from long-term debt                      3,835             83
     Repayment of long-term debt                      (6,027)        (2,189)
     Proceeds from issuance of common
      stock under employee stock purchase plan            67             50
     Preferred stock dividend payments                    --         (1,011)
     Proceeds from option exercises                       46            140
     Additions to deferred financing costs              (279)           (47)

      Net cash provided by (used in)
       financing activities                           (2,358)        15,037

      Net cash in discontinued operations                (33)          (231)

    Change in cash and cash equivalents:
     Net increase (decrease) in cash
      and cash equivalents                            (1,821)         2,228
     Cash and cash equivalents at
      beginning of period                              9,577          7,884

     Cash and cash equivalents at end of period       $7,756       $ 10,112
 

                      WestCoast Hospitality Corporation
                         Additional Hotel Statistics
                                 (unaudited)

    System Hotels as of June 30, 2005

                                                               Meeting Space
                                       Hotels         Rooms      (sq. ft.)
    Owned or Leased Hotels:(1)
     Red Lion Hotels                     38           6,637       312,528
     WestCoast Hotels                     3             692        40,500
     Other Brands                         1             153         3,945
                                         42           7,482       356,973

    Managed Hotels:
     Red Lion Hotels                      1             150         5,234
     WestCoast Hotels                     1              72         1,800
     Other Brands                         1             254        36,000
                                          3             476        43,034

    Franchised Hotels:
     Red Lion Hotels                     22           3,665       153,101
     WestCoast Hotels                     1             257        15,000
                                         23           3,922       168,101

    Total                                68          11,880       568,108

    Comparable Hotel Statistics(2)

                           Three months ended         Three months ended
                              June 30, 2005             June 30, 2004
                    Average                      Average
                   Occupancy(3) ADR(4) RevPAR(5)Occupancy(3)ADR(4) RevPAR(5)
    Owned or
     Leased Hotels:
      Continuing
       Operations     67.1%    $74.32  $49.87    63.7%    $71.37  $45.46
      Discontinued
       Operations     53.9%     61.67   33.23    53.5%     59.61   31.88
                      64.1%     71.91   46.10    61.4%     69.05   42.38

    Combined System
     Wide (6)
                      64.7%    $73.68  $47.64    61.8%    $71.06  $43.90

    Red Lion Hotels
     (Owned, Leased,
     Managed and
     Franchised) (7)
                      65.5%    $72.51  $47.46    62.3%    $69.88  $43.54

                            Six months ended           Six months ended
                              June 30, 2005              June 30, 2004
                     Average                    Average
                   Occupancy(3) ADR(4) RevPAR(5)Occupancy(3)ADR(4) RevPAR(5)
   Owned or
    Leased Hotels:
     Continuing
      Operations      60.6%    $71.22  $43.16    57.5%    $69.81  $40.14
     Discontinued
      Operations      45.7%     59.57   27.23    45.9%     57.19   26.23
                      57.2%     69.11   39.55    54.9%     67.42   36.99

    Combined System
     Wide (6)
                      58.4%    $71.37  $41.70    56.2%    $70.00  $39.36

    Red Lion Hotels
     (Owned, Leased,
     Managed and
     Franchised) (7)
                      59.4%    $70.14  $41.67    57.0%    $69.00  $39.30

    (1)  Statistics include 11 hotels previously identified as discontinued
         business units, aggregating 1,694 rooms and 57,645 square feet of
         meeting space.

    (2)  Includes all hotels owned, leased, managed and franchised for greater
         than one year by WestCoast Hospitality Corporation.

    (3)  Average occupancy represents total paid rooms divided by total
         available rooms.  Total available rooms represents the number of
         rooms available multiplied by the number of days in the reported
         period.

    (4)  Average daily rate ("ADR") represents total room revenues divided by
         the total number of paid rooms occupied by hotel guests.

    (5)  Revenue per available room ("RevPAR") represents total room and
         related revenues divided by total available rooms.

    (6)  Includes all hotels owned, leased, managed and franchised for greater
         than one year by WestCoast Hospitality Corporation.
         No adjustment has been made for hotels classified as discontinued
         operations.

    (7)  Includes all hotels owned, leased, managed and franchised for greater
         than one year operated under the Red Lion brand name.
         No adjustment has been made for hotels classified as discontinued
         operations.
 

                        WestCoast Hospitality Corporation
                      Reconciliation of EBITDA to Net Income
                                   (unaudited)
                                 ($ in thousands)

    The following is a reconciliation of EBITDA and EBITDA from continuing
    operations to net income (loss) for the periods presented:

                            Three months ended          Six months ended
                                  June 30,                   June 30,
                             2005         2004         2005          2004
    EBITDA from
     continuing operations  $7,540       $6,806       $9,285       $9,233
     Income tax (expense)
      benefit - continuing
      operations              (279)        (135)       1,416          960
     Interest expense -
      continuing
      operations            (3,598)      (3,657)      (7,199)      (6,503)
     Depreciation and
      amortization -
      continuing operations (2,881)      (2,600)      (5,720)      (5,076)
     Net income (loss) from
     continuing operations     782          414       (2,218)      (1,386)
     Income (loss) on
     discontinued operations   951          391          828         (157)
     Net income (loss)      $1,733         $805      $(1,390)     $(1,543)

    EBITDA                  $9,479       $8,449      $11,391      $11,073
     Income tax (expense)
     benefit                  (856)        (346)         960        1,045
     Interest expense       (3,975)      (4,083)      (7,953)      (7,370)
     Depreciation and
      amortization          (2,915)      (3,215)      (5,788)      (6,291)
     Net income (loss)      $1,733         $805      $(1,390)     $(1,543)

                         NON-GAAP FINANCIAL MEASURES

     EBITDA is defined as net income (or loss), before interest, taxes,
     depreciation and amortization. EBITDA is considered a non-GAAP financial
     measurement.  We believe it is a useful financial performance measure for
     us and for our shareholders and is a complement to net income and other
     financial performance measures provided in accordance with generally
     accepted accounting principles in the United States ("GAAP"). EBITDA from
     continuing operations is calculated in the same manner, but excludes the
     operating results of business units identified as discontinued under
     GAAP.

     We use EBITDA to measure the financial performance of our owned and
     leased hotels because it excludes interest, taxes, depreciation and
     amortization, which bear little or no relationship to operating
     performance. By excluding interest expense, EBITDA measures our financial
     performance irrespective of our capital structure or how we finance our
     properties and operations. We generally pay federal and state income
     taxes on a consolidated basis, taking into account how the applicable
     taxing laws apply to our company in the aggregate. By excluding taxes on
     income, we believe EBITDA provides a basis for measuring the financial
     performance of our operations excluding factors that our hotels and other
     operations cannot control. By excluding depreciation and amortization
     expense, which can vary from hotel to hotel based on historical cost and
     other factors unrelated to the hotels' financial performance, EBITDA
     measures the financial performance of our hotels without regard to their
     historical cost. For all of these reasons, we believe that EBITDA
     provides us and investors with information that is relevant and useful in
     evaluating our business.

     However, because EBITDA excludes depreciation and amortization, it does
     not measure the capital we require to maintain or preserve our long-lived
     assets. In addition, because EBITDA does not reflect interest expense, it
     does not take into account the total amount of interest we pay on
     outstanding debt nor does it show trends in interest costs due to changes
     in our borrowings or changes in interest rates. EBITDA, as defined by us,
     may not be comparable to EBITDA as reported by other companies that do
     not define EBITDA exactly as we define the term. Because we use EBITDA to
     evaluate our financial performance, we reconcile all EBITDA measures to
     net income, which is the most comparable financial measure calculated and
     presented in accordance with GAAP. EBITDA does not represent cash
     generated from operating activities determined in accordance with GAAP,
     and should not be considered as an alternative to operating income or net
     income determined in accordance with GAAP as an indicator of performance
     or as an alternative to cash flows from operating activities as an
     indicator of liquidity.

About WestCoast Hospitality Corporation
WestCoast Hospitality Corporation is a hospitality and leisure company primarily engaged in the ownership, management, development and franchising of upper mid-scale, full service hotels under its Red Lion® and WestCoast® brands. In addition, through its entertainment division, which includes its TicketsWest.com, Inc. subsidiary, it engages in event ticket distribution and promotes and presents a variety of entertainment productions. G&B Real Estate Services, its real estate division, engages in traditional real estate-related services, including developing, managing and brokering sales and leases of commercial and multi-unit residential properties.

This press release contains forward-looking statements within the meaning of federal securities law, including statements concerning plans, objectives, goals, strategies, projections of future events or performance and underlying assumptions (many of which are based, in turn, upon further assumptions). 

Contact:

Anupam Narayan
Executive Vice President, Chief Financial Officer
WestCoast Hospitality Corporation
+1-509-459-6100
[email protected]
 

Also See: WestCoast Hospitality Corporation Has Agreements in Place to Sell Seven Hotels; Will Use Proceeds for Renovations at 31 Red Lion Hotels / July 2005
WestCoast Hospitality Sells 50% Interest in its WestCoast Kalispell Center Hotel to GVD Commercial Properties, Inc.; Will Expand, Renovate and Rebrand Hotel to Red Lion / July 2005

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