Days Inns signs development agreement for China; 2,500 rooms to be opened in next 24 months.

PARSIPPANY, N.J.--(BUSINESS WIRE)--Dec. 26, 1995--Days Inns of America Inc., the world's largest mid-market hotel franchisor, announced today it has signed a Master License Agreement for the development of three-star hotels in the People's Republic of China.

Days Inns, with 1,715 franchised hotels worldwide, is part of HFS Inc., the world's largest franchisor of hotels and residential real estate brokerage offices. Its stock is listed on the New York Stock Exchange under the symbol "HFS."

The agreement is subject to final regulatory approval and the formation and funding of the operating company, Days Inn China. Days Inn China will be sponsored by a consortium of Chinese commercial enterprises involved in transportation, tourism and economic development.

The territory in the Master License Agreement is the People's Republic of China, including Hong Kong and Macau, excluding the province of Taiwan, China International Capital Corporation Limited, Beijing, was advisors to the master licensee.

As master licensee, Days Inn China will sell Days Inn franchises and establish a complete system to support franchisees including quality assurance, marketing, advertising, training, reservations and guest services.

The agreement, which was developed under the auspices of the People's Republic of China's National Tourism Administration, calls for Days Inn China to have 2,500 guest rooms open or under development within 24 months, 4,000 guest rooms within 36 months, and 6,000 rooms within 48 months of the effective date.

"Days Inns will be the first international three-star hotel chain in China, a country of more than 1.2 billion people," said John Snodgrass, HFS Inc. president and COO. "The purpose of the venture is to promote tourism, develop quality lodging and a highly trained, professional workforce."

"Days Inns was approached to franchise the hotels following an exhaustive study of international three and four-star hotel brands. Obviously we are pleased by the selection by this extremely discerning organization, it is recognition of the distribution, high perceived value, worldwide growth and professionalism of the Days Inn brand," he added.

"Given the rapid growth of the tourism industry in China, technology transfer in the lodging industry is critical for the development of our business," said Yue Yang, general manager of Richman Hotel Management Limited, and a member of HCS, the Hotel Chain System Preparatory Task Force. "The selection of Days Inns will bring a wealth of experience to us."

Days Inns signed three master licensing agreements in 1995 for the development of hotels in Colombia, India and South Africa.

"Days Inns will continue to enter into agreements with knowledgeable foreign businesspersons with a demonstrated track record for success in a particular region or country looking to develop three-star lodging," said Snodgrass.

David Young, vice president of international sales and development for HFS Inc. and Days Inns said negotiations over the next several months are expected to culminate in agreements for the development of Days Inns in Japan, Argentina, Austria, Egypt, Switzerland and the United Arab Emirates.

"The boom in demand for affordable, three-star lodging is increasing, especially in these countries which are experiencing increased business and leisure travel," Young added.

Days Inn currently has 45 properties in Canada, eight in Mexico, two in Holland, one in Puerto Rico and one in Israel. Existing agreements call for the development of 20 more properties in Canada, five in India, three in the Philippines, one in Israel and one in Colombia. Days Inn will also experience property development in Malaysia and Thailand in the upcoming years.

In lodging, HFS Inc. has approximately 4,700 Days Inn, Howard Johnson, Knights Inn, Park Inn International, Ramada, Super 8 and Villager Lodge franchised hotels with over 450,000 rooms in the United States, Canada, Latin America and Europe. In residential real estate, HFS has approximately 6,000 CENTURY 21 franchised offices in the United States and 14 other countries and territories.

HFS recently announced an agreement to purchase in January 1996 the Travelodge franchise system in North America, which comprises approximately 450 hotels and motels with about 36,000 rooms. The company also announced an agreement in principle to purchase in February 1996 the Electronic Realty Associates (ERA) system, which comprises about 2,500 real estate brokerage offices in the United States and 14 other countries.

CONTACT: Days Inns of America Inc.

Brian Feldman, 201/952-8481