The expansion project will include the addition of approximately 950 guest rooms, including an all-suite 15-story tower with upgraded amenities, approximately 60,000 square feet of meeting and convention space, and approximately 35,000 square feet of casino space. In addition, the project includes the expansion of the Hard Rock�s award-winning pool, several prominent new food and beverage outlets, a new and larger �Joint� live entertainment venue, 30,000 square feet of new retail space, as well as a new spa and health club. As part of the project, the Hard Rock�s existing suites and common areas will be renovated to revitalize the property and bring it up to MHG�s best-in-class brand standard. The project, which is scheduled to begin this year, is expected to be fully completed by mid-2009. 

Klai Juba Architects is leading the architectural planning of the expansion. The firm, which led the expansion and upgrade of the property in 1999, has also led other highly successful projects in Las Vegas including the Four Seasons Hotel, Sky Las Vegas, and Mandalay Bay. 
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Renderings of the major expansion and renovation project
for the Hard Rock Hotel & Casino in Las Vegas.
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The expansion, which is expected to begin during the fall of this year and be fully completed during mid-2009, will add approximately 550 guest rooms in a new tower to be constructed on the existing property site, and will use 8 acres of the adjacent 23-acre land parcel to build a new all-suite VIP tower with an additional 400 suites. The project will also include the expansion of the Hard Rock�s casino and pool, as well as the addition of a new spa and health club and several new restaurants and bars, and a new nightclub. MHG and DLJMB are currently evaluating several options for the remainder of the 23-acre land parcel. 

Renovations to the existing property will begin immediately, with upgrades to existing suites, restaurants and bars, retail shops, and common areas, and a new ultra lounge and poker room. These renovations are scheduled to be completed by the first quarter of 2008, with certain elements to be completed earlier. 

Upon completion, the Hard Rock will have approximately 1500 fully modern, state-of-the-art rooms and all of the services and amenities of the larger, impersonal casino hotels, while preserving an intimate and exclusive environment with unique advantages such as its world-class pool and comfortable boutique feel. As previously announced, DLJMB agreed to fund 100% of the equity capital required to expand the Hard Rock property, up to a total of an additional $150 million. MHG will have the option to fund the expansion project proportionate to its equity interest in the joint venture. A credit agreement provides for a loan of up to an additional $600 million for the Hard Rock renovation and expansion. 

About Morgans Hotel Group 
Morgans Hotel Group Co. (Nasdaq: MHGC) which is widely credited with establishing and developing the rapidly expanding boutique hotel sector, owns and operates Morgans, Royalton and Hudson in New York, Delano and The Shore Club in Miami, Mondrian in Los Angeles and Scottsdale, Clift in San Francisco, and Sanderson and St Martins Lane in London. In February 2007, MHG and an equity partner acquired the Hard Rock Hotel & Casino in Las Vegas and related assets. MHG has other property transactions in various stages of completion including projects in Miami Beach, Florida, and Las Vegas, Nevada, and continues to vigorously pursue its strategy of developing unique properties at various price points in international gateway cities in the United States, Europe, South America, Asia and around the world. 

Statements contained in this press release which are not historical facts are forward-looking statements as the term is defined in the Private Securities Litigation Reform Act of 1995. 

Eric Brielmann
212-355-4449

www.morganshotelgroup.com