Interstate Hotels & Resorts Named to Manage First Extended-Stay Hotel in Iowa City, Iowa; Under-Construction Property Part of New Downtown Mixed-Use Development.

ARLINGTON, Va. -- Interstate Hotels & Resorts (NYSE: IHR), the nation's largest independent hotel management company, today announced that it has been selected to manage a luxury, all-suite hotel currently under construction in downtown Iowa City, Iowa. The 56-suite, extended-stay property is part of a $27 million, mixed-use development called Plaza Towers, which also will feature a 14,000-square-foot grocery store; 4,000 square feet of ground-level retail space; a state-of-the-art health club; a conference center; 27 apartments; and 28 condominiums. The Plaza Towers project is expected to be completed by late 2005.

"Iowa City is experiencing a development boom, and Plaza Towers will be a dynamic addition to the downtown area," said Steve Jorns, Interstate's chief executive officer. "We fully expect this development to become the focal point of the downtown area and to further enhance its desirability and attractiveness to both business and leisure travelers. Because we also manage the nearby Sheraton, we will be able to take advantage of a number of operating synergies and economies of scale. When completed, we believe this hotel and this multi-use project will set a new standard for quality and luxury in Iowa City."

"Interstate has a national reputation for delivering excellent results and more experience managing hotels than anyone else in the country," said Marc Moen, principal of Plaza Towers, LLC. "We feel fortunate to have an operator of their stature working with us on this unique project. As an independent, non-affiliated manager, they were the perfect choice for this hotel, which will be operated as an independent property."

Located at 221 East College Street, the Plaza Towers development, with its two signature towers (13 and 14 stories, respectively), is within minutes of the University of Iowa, the Hancher Performing Arts Center, Proctor and Gamble, Mercy Hospital, Lear Corp. and the VA Hospital.

When completed, the full-service, extended-stay hotel, which will be housed on floors four through six of the towers, will offer 56 luxury suites, featuring fully equipped, custom-built kitchens; floor-to-ceiling/wall-to-wall windows; luxurious bathrooms with walls of clear and frosted glass; high-speed Internet access; and contemporary minimalist furnishings. Hotel amenities will include a dramatic lobby staffed 24 hours; room service; an upscale 4,000 square foot restaurant and lounge; a state-of-the-art 24-hour health club; a holistic healing center, including massage therapy; and a 6,000 square foot roof terrace.

Interstate Hotels & Resorts operates approximately 270 hospitality properties with more than 60,000 rooms in 40 states, the District of Columbia, Canada, Russia, and Portugal. BridgeStreet Corporate Housing Worldwide, an Interstate Hotels & Resorts' subsidiary, is one of the world's largest corporate housing providers. BridgeStreet and its network of Global Partners offer more than 8,500 corporate apartments located in 84 MSAs throughout the United States and internationally. For more information about Interstate Hotels & Resorts, visit the company's Web site: www.ihrco.com.

This press release contains "forward-looking statements," within the meaning of the Private Securities Litigation Reform Act of 1995, about Interstate Hotels & Resorts, including those statements regarding future operating results and the timing and composition of revenues, among others, and statements containing words such as "expects," "believes" or "will," which indicate that those statements are forward-looking. Except for historical information, the matters discussed in this press release are forward-looking statements that are subject to certain risks and uncertainties that could cause the actual results to differ materially, including changes in the national economy, economic conditions generally and the real estate market specifically, the threat of future terrorist attacks, governmental actions, legislative and regulatory changes, availability of debt and equity capital, interest rates, competition, supply and demand for lodging facilities in our current and proposed market areas, and the company's ability to manage integration and growth. Additional risks are discussed in Interstate Hotels & Resorts' filings with the Securities and Exchange Commission, including Interstate Hotels & Resorts annual report on Form 10-K for the year ended December 31, 2003.