Candlewood Hotel Company Announces Third Quarter Results.

WICHITA, Kans.--(BUSINESS WIRE)--December 16, 1996--Candlewood Hotel Company, Inc. (Nasdaq NM: CNDL), an owner, developer and franchisor of business extended-stay hotels, today announced results for the third quarter and nine months ended September 30, 1996. For the third quarter, the Company reported revenues of $0.3 million and a net loss of $0.2 million, or four cents per share. For the nine-month period, the Company reported revenues of $0.4 million and a net loss of $1.0 million, or 19 cents per share. Per share data for the three- and nine-month periods are reported on a pro forma basis for comparison only. During the reporting periods, which were prior to the Company's November 5 initial public offering (IPO), the Company operated as Candlewood Hotel Company, L.L.C. (Candlewood LLC), a limited liability company. Candlewood LLC was formed in the fourth quarter of 1995 and, as a result, there are no comparable year-to-year data. The results of operations for the third quarter are not necessarily indicative of the results which may be expected for the entire year.

Revenues for the third quarter came from the operation of the Company's first hotel, which opened in Wichita, Kansas in May 1996. "Although the hotel was in a start-up phase during the third quarter of 1996, we are pleased with the operating results of the property and the progress made during the quarter towards creating a solid foundation for growth," said Jack DeBoer, Candlewood chairman and chief executive officer. He noted that as of December 1, 1996, a total of four Company-owned and two franchise hotels were under construction.

Candlewood Hotel Company, Inc., headquartered in Wichita, owns, develops and franchises a value-oriented, extended-stay hotel brand targeted to the business traveler. -0-

                      Candlewood Hotel Company
            3Q 1996 Financial and Operating Highlights
                              Unaudited


In thousands, except    For the 3 months    For the 9 months ended
per share amounts       ended Sept. 30(a)          Sept. 30(a)
                              1996                    1996

Revenues                      $263                    $383

Operating income (loss)       (249)                 (1,034)

Net income (loss)             (231)                 (1,005)

Per share data, pro forma

    (Loss) income            (0.04)                  (0.19)

Weighted shares
  outstanding, pro forma 5,175,000               5,175,000

(a) During the reporting periods, which were prior to the Company's
November 5 initial public offering (IPO), the Company operated as
Candlewood Hotel Company, L.L.C., (Candlewood LLC) a limited
liability company.  Candlewood LLC was formed in the fourth quarter
of 1995 and, as a result, there are no comparable year-to-year data.

Development Highlights as of December 1, 1996

Number of hotels open                 1
Number of hotels under construction
    Company-owned                     4
    Franchise                         2
Sites under contract                 22
Sites under negotiations             23

CONTACT: Candlewood Hotel Company, Inc.

Warren Fix, Chief Financial Officer

[phone]

or

Jerry Daly, media [phone]