Bristol Hotels & Resorts Will Fall Short of Consensus Earnings Estimates in 3rd & 4th Quarters.

DALLAS--(BUSINESS WIRE)--Oct. 15, 1999--

Bristol Hotels & Resorts (NYSE:BH) announced today that it will have a material shortfall from analysts' consensus estimates for the third and fourth quarters of 1999 due to weaker than budgeted revenues in its hotel portfolio, as well as a shift in business mix that has resulted in lower operating margins.

The Company will announce third quarter earnings and expectations for the fourth quarter following its November 10, 1999, Board of Directors Meeting. Third quarter earnings are expected to be in the range of $.08 to $.10 per diluted share compared to the consensus estimate of $.23.

In spite of increasingly competitive markets, third quarter 1999 revenue performance compared favorably to the industry. The Company's leased hotels posted year-over-year increases in occupancy, average rate and revpar of 1.5% points, 4.6% and 6.8%, respectively. Hotels that were renovated in 1998 posted year-over-year revpar gains of 38.0% in the third quarter. These results are in line with the latest quarterly expectations of FelCor Lodging Trust, the lessor of the majority of Bristol's operated hotels; however, actual revenue was significantly below Bristol's original budget for the quarter.

"We are pleased with our market share performance, but competitive pricing has caused a serious deterioration of our operating margins after rent expense," noted J. Peter Kline, Chairman and Chief Executive Officer. "Earlier in the year, more than 80 percent of our shortfall to budgeted revenue was attributable to occupancy and we successfully maintained margins to make up for the shortfall. In the third quarter, about 70 percent of our shortfall to budgeted revenue was attributable to room rates. The effect of this shift is that we are serving more guests at lower than expected rates. This has been exacerbated by pressure on labor costs, higher sales and marketing costs to respond to increased competition, and by a more than 50 percent increase in the cost of guest frequency programs. In addition, we have experienced significant pressure on food and beverage costs. Consequently, since percentage rent payments are based on total revenues without regard for the mix of rate and occupancy, the additional operating costs resulted in lower margins."

According to Kline, the Company has taken a number of significant steps in response to the situation. "We are obviously conducting in-depth analyses of our revenue shortfalls and operating cost structure in order to accurately project the implications for the balance of 1999 and for next year. These activities are being incorporated into the budget process for next year and have resulted in the following actions:

-- In September 1999, the Company realigned its operating

organizational structure. Previously, Bristol operated with 11

geographic "Area Management" organizations that reported to two

regional vice presidents. The new organizational structure

eliminates the "Area Management" staffs and creates the following

four operating divisions, which align the hotels by product type:

(1) Crowne Plazas and other upscale hotels, (2) resorts and

full-service properties with more than 300 rooms, (3)

full-service hotels with fewer than 300 rooms, and (4)

limited-service hotels. General managers report directly to one

of four division management teams generally consisting of a vice

president of operations and division vice president of sales and

revenue management. The Company believes the elimination of a

layer of management will allow information and directives to flow

to the hotels faster and to be better understood. Additionally,

the structure will allow each divisional team to become experts

in their hotel type.

-- The national sales organization has been expanded to more

effectively pursue business opportunities with major corporate

accounts and to leverage existing relationships across the entire

portfolio of hotels. This organization interfaces directly with

Bass Hotels & Resorts' world-wide sales effort, and a pilot cross

referral system is being tested. Bass Hotels & Resorts has also

recently expanded its staff dedicated to national sales

production.

-- The Company's national purchasing program is being expanded and

new compliance procedures have been initiated to maximize

national rebate programs and reduce food and beverage costs.

-- A new employee retention initiative has been launched. Many of

the revenue shortfalls can be attributed to high turnover in the

hotel-level sales organization. It is expected that the

investment in retention will be more than offset by the reduced

cost of recruiting and training new employees.

-- The Company's major redevelopment projects are nearly complete

which will significantly reduce future distractions to

operations. For most properties, 2000 projects will be limited to

only normal ongoing FF&E replacements. As such, the Company has

begun to substantially eliminate its construction and design

department and will rely on outsourcing to handle redevelopment

projects after December 31, 1999.

Bristol Hotels & Resorts (NYSE:BH) is one of the largest independent hotel operators in the United States and operates the largest number of Bass Hotels & Resorts branded hotels in the world. Bristol's 110 hotels include nearly 30,000 rooms in 24 states and Canada. The Company's hotels operate primarily in the mid-priced to upscale segments of the industry and are located in 19 of the top 25 lodging markets in the United States. Bristol operates nearly 90 Crowne Plaza and Holiday Inn properties and is a leading franchisee in Bass' $1.5 billion modernization program. By the year 2000, Bristol will have overseen the investment of $400 million in the redevelopment of Crowne Plaza and Holiday Inn hotels. Bristol offers additional information and reservations capability on its pages on the World Wide Web -- http://www.bristolhotels.com.

Certain matters discussed in this press release may be construed as forward-looking within the meaning of the Private Litigation Reform Act of 1995 and as such may involve known and unknown risks, uncertainties, and other factors which may cause actual results, performance or achievements of the Company to be different from any future results, performance or achievements expressed or implied by such forward-looking statements. Although the Company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. These risks are detailed from time to time in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances.