�We had a number of significant accomplishments during the quarter,� said A.F. Petrocelli, chairman and CEO of Prime. �We are pleased with our 2.4% REVPAR growth despite soft conditions in several markets and almost $2 million of lost revenue caused by Hurricane Floyd. 

We were also very pleased with our brand development. Our HomeGate to Wellesley conversion is on target for November 1 and we continue to sign AmeriSuites franchise agreements. Asset divestiture activity was also strong. We received $31 million from the sale of three AmeriSuites hotels and entered into contracts to sell non-core assets such as the Frenchman�s Reef Marriott hotel in St. Thomas U.S.V.I. and five HomeGate hotels. With the proceeds from the sales, we repurchased almost 3 million shares of our stock and continue to reduce our debt levels. We will continue to pursue our strategy of growing our brands, reducing our real estate holdings and utilizing excess cash flow to repurchase stock and reduce debt.� 

For the quarter, revenues increased to $140.8 million and earnings before interest, taxes, depreciation and amortization (EBITDA) increased to $46.9 million as compared to revenue of $121.0 million and EBITDA of $35.4 million in the third quarter of 1998. Total net income, which included a pre-tax valuation reserve for non-core assets held for sale of $24.5 million and pre-tax gains from asset transactions of $2.8 million, was $1.4 million or $.03 per share. Total net income for the 1998 third quarter was $8.9 million, or $.17 per share, and included pre-tax charges of $6.4 million related to hotel development and severance costs.  For the nine months ended September 30, 1999, Prime reported income before asset sales and special charges of $42.8 million, or $.81 per share, compared to $41.6 million, or $.78 per share, for the same period in 1998. Total net income, which includes gains on sales of assets, special charges and the cumulative effect of a change in accounting principle in 1999, was $23.9 million or $.45 per share, for the nine months ended September 30, 1999 compared to $42.8 million, or $.80 per share, for the same period in 1998. 

Hotel Operations 

Prime�s comparable owned hotels achieved a 2.4% REVPAR growth rate for the quarter.  The Company estimates that, excluding the effects of Hurricane Floyd, REVPAR growth would have approximated 3.6%.  For the quarter, the comparable owned AmeriSuites hotels generated a 2.5% REVPAR increase, as average daily rates (�ADR�) remained relatively stable at $80.91, and occupancy advanced by one and one half percentage points to 71.4%.  The remaining AmeriSuites, which have been open for less than a full year, achieved an $85.01 ADR and a 61.7% occupancy rate.  The comparable owned full-service hotels achieved a 3.6% REVPAR increase, as ADR increased by 2.5% to $110.22 and occupancy increased by one percentage point to 77.7%.  Prime�s Wellesley Inns, all of which are comparable, reported a REVPAR equal to the prior year as ADR increased by 1.1% to $58.31, and occupancy decreased by one percentage point to 70.5%.  The HomeGate Studios  Suites hotels, which are being converted to the Wellesley Inns  Suites brand, achieved a $55.85 ADR and a 54.3% occupancy rate. 

Brand Development 

Prime is seeking to continue the expansion of its brands through franchising.  The Company has generated a high degree of interest in its AmeriSuites brand with seven new AmeriSuites franchise agreements signed during the quarter.  Since it received approval to begin franchising in mid 1998, Prime has executed 27 new franchise agreements and has 32 applications pending.  Currently, four of these sites are under construction with five to six additional franchised sites scheduled to begin construction in the fourth quarter. 

Prime is on target with plans to convert 38 of its 43 HomeGate Studios Suites to its Wellesley Inn Suites brand by November 1. Prime believes that the conversion will create efficiencies by adding critical mass to the Wellesley chain, improving franchising prospects and enhancing cash flow at existing hotels by shifting the customer focus from extended stay to transient. The Company also intends to convert two other hotels in operation to its Wellesley chain. 

Since the beginning of the year, Prime has opened 22 hotels and, upon completion of the HomeGate to Wellesley conversion, will have 97 AmeriSuites and 66 Wellesley Inn Suites in operation. The Company has also resumed corporate development with the construction of AmeriSuites hotels in the Baltimore and Orlando markets and is reviewing plans to construct AmeriSuites on sites it already owns in the Detroit, San Jose and San Francisco areas. 

Other Events 

During the quarter, Prime generated approximately $31 million from the sales of three AmeriSuites hotels. Prime has several other potential AmeriSuites hotel sales under negotiation and expects to utilize any proceeds for the repurchase of stock and/or the reduction of debt.  Additionally, Prime also entered into contracts to sell several non-core assets including the Frenchman�s Reef Marriott hotel in St. Thomas U.S.V.I. and the remaining five Homegate hotels which are not part of the Wellesley conversion. 

Since the beginning of the quarter, the Company repurchased approximately 2.9 million shares of its common stock at an average price of $8.50 per share. 

To date in 1999, the Company has repurchased 5.4 million shares at a total cost of $50 million. On October 26, the Company�s Board of Directors authorized the repurchase of an additional $100 million of its stock. The Company and its bank group have also amended the terms of the Company�s revolving credit facility to allow for future stock repurchases equal to 50% of the proceeds from asset sales in an aggregate purchase amount not to exceed $100 million. 

During the quarter, Prime entered into new management contracts to provide hotel management services for three hotels. Two of the hotels are located in California and one is in North Carolina. Prime intends to continue to pursue new management opportunities and currently has several additional agreements under negotiation.  Prime Hospitality Corp., one of the nation�s premier lodging companies, owns, manages, develops and franchises 209 hotels throughout the United States and the U.S Virgin Islands. The Company owns and operates three proprietary brands that compete in different segments: AmeriSuites® (all-suites), HomeGate Studios Suites® (extended-stay) and Wellesley Inns® (limited-service). Prime has announced that its Wellesley and HomeGate chains will merge November 1, 1999 to form the new Wellesley Inn Suites® brand. Also within its portfolio are owned and/or managed hotels operated under franchised agreements with national hotels chains including Hilton, Marriott, Radisson, Sheraton, Crowne Plaza, Holiday Inn, Ramada, Comfort Inn and Howard Johnson. 
 

Statements in this press release, other than statements of historical information, are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.