Affiliate of U.S.-based Hotel Owner/Manager Opens First Mideast Office in Israel.

WESTPORT, Conn./TEL AVIV, Israel--(BUSINESS WIRE)--Oct. 29, 1996--

HEI Mid-East Hotels Signs First Management Contract

HEI Mid-East Hotels, an affiliate of Westport, Conn.-based HEI Hotels, has commenced operations and opened its first Middle East office in Tel Aviv, Israel. The new company will both manage and acquire hotels throughout the region, according to Stephen Mendell, HEI Mid-East Hotels president.

"Although the market will continue to be cyclical in relation to political events, we believe the long-term outlook is that the Mideast hotel industry is poised for substantial growth," Mendell said. "We see tremendous opportunities to buy hotels for our own account as well as manage properties for others. We will adapt our successful hotel operating systems to enhance profitability."

Mendell said that the company intends to acquire existing hotels as well as develop new properties. HEI Mid-East will manage franchised and independent hotels. "Over the next five to 10 years, we see the potential to own and/or manage 20-25 hotels throughout the Middle East," he commented. "We expect to open at least one other office in the region in the next year."

Mendell was a co-founder of U.S.-based HEI Hotels in 1985. He was managing director of HEI's sister company Hospitality Valuation Services (HVS) International's London office from 1990 to 1995 where he conducted numerous hotel consulting projects throughout the Middle East. Other key HEI Mid-East executives include Joel Russo, vice-president-development, and Neil Kaye, corporate director-operations. Russo transferred from HVS International, having been based in London and worked extensively throughout Israel and the Middle East. Kaye has considerable hotel operations background in both U.S. and Middle East, managing such brands as Sheraton and Doubletree. Kaye also has extensive experience in hotel management in Israel, including the Dan Accadia Hotel in Herzliya.

HEI Mid-East also announced that it has signed a long-term agreement to manage the Avia Hotel in Yehud, Israel. The property is the only hotel at Ben Gurion Airport, the primary international airport in Israel, handling some seven million passengers per year. The 105-room hotel, built in the mid-1960s, will undergo a $2 million renovation next spring. Upon completion, the hotel will be repositioned as an upscale, full service hotel.

HEI Hotels is one of the nation's fastest growing hotel ownership/management companies. The company specializes in upscale, full-service hotels with 200 to 500 rooms. HEI currently owns and manages a portfolio of 20 hotels valued in excess of $400 million with approximately 5,000 rooms under such brands as Marriott, Sheraton, Hilton, Ramada, Omni, Crowne Plaza and Embassy Suites. The company expects to acquire another $100 million of hotel real estate by year-end and $200 million in 1997.

HEI Mid-East Hotels intends to be one of the region's largest hotel ownership and management companies in the Middle East by the turn of the century. The company's headquarters are in Tel Aviv, Israel.

CONTACT: Jerry Daly

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