Eagle Hospitality Announces Second Quarter Results; RevPAR Increases 15.7 Percent

Business Wire, August 10, 2005

COVINGTON, Ky. -- Eagle Hospitality Properties Trust, Inc. (NYSE:EHP):

Highlights:

--Net Income to Common Shareholders of $1.8 million

--RevPAR increases 15.7 percent

--EBITDA of $8.2 million

--FFO of $0.23 per diluted share

--Executed $140.0 million of acquisitions

--Successfully completed $100.0 million preferred stock offering and $53.1 million fixed-rate secured debt financing

--Declared quarterly dividend of $0.175 per share, resulting in an annualized 7.3 percent yield based upon the August 10, 2005, closing stock price of $9.60

--Conference call scheduled for August 11, 2005, at 10:00 AM ET, to discuss results.

Eagle Hospitality Properties Trust, Inc. (NYSE:EHP) today announced net income available to common shareholders for the second quarter 2005 of $1.8 million, or $0.10 per diluted share, compared with $1.6 million for the Predecessor in the prior-year period.

Funds from operations ("FFO") increased 54.8 percent to $5.4 million, or $0.23 per diluted share, for the quarter compared with $3.5 million for the prior-year period.

Earnings before interest, income taxes, depreciation and amortization ("EBITDA") were $8.2 million for the quarter compared with $6.7 million for the prior-year period. The current year EBITDA includes approximately $1.9 million of corporate overhead and stock-based compensation amortization, which was not incurred during the prior year period. FFO and EBITDA are non-GAAP operating measures. Please see the disclosure at the end of this release regarding these non-GAAP measures.

Room revenue per available room ("RevPAR") for the quarter ended June 30, 2005, increased 15.7 percent to $85.78 compared with $74.13 for the same period in 2004. Average daily rate ("ADR") rose to $117.35, a 7.5 percent improvement over the comparable period in 2004, while occupancy rose 7.6 percent to 73.1 percent. The Company's key operating statistics and hotel EBITDA tables include results for both the current and prior-year periods for the hotels owned by Eagle Hospitality as of June 30, 2005, as if owned for the entire current year and prior year periods. The Chicago Marriott Southwest at Burr Ridge, which opened in August 2004, is excluded from the calculations of both RevPAR and hotel EBITDA. The Hilton Glendale and Embassy Suites San Juan Hotel & Casino are also excluded, since both hotels were purchased in late June 2005.

Bill Blackham, Eagle Hospitality's President and Chief Executive Officer, said, "The impressive RevPAR growth generated by our portfolio exceeded our expectations. This was largely attributable to strong corporate group and convention demand experienced at several of our hotels, as well as healthy improvements exhibited by the individual business traveler segment throughout most of the portfolio. The portfolio RevPAR growth was led by the Hyatt Rochester, Hilton Cincinnati Airport and the Cincinnati Landmark Marriott hotels, all of which experienced RevPAR gains of more than 19.0 percent in the quarter versus the comparable period in 2004. The continually improving economy combined with the lift expected at several of our recently refurbished hotels should continue to generate robust revenue and cash flow improvements for our portfolio for the balance of the year. We are also beginning to see evidence of increased pricing power at several hotels, which is encouraging."

The 270-room Embassy Suites Phoenix-Scottsdale Resort, which was the Company's first acquisition on February 25, 2005, for $33.0 million, continued to perform above expectations for the second quarter as it also did in the short period that it was owned by the Company during the first quarter. Significant personnel changes including the hiring of a new general manager and sales management team, in addition to a property-wide cost containment program instituted by the resort's manager, Commonwealth Hotels Inc., have produced immediate cash flow improvements at the resort. For the second quarter of 2005 versus the prior year period, RevPAR increased more than 16.0 percent and hotel EBITDA improved approximately $0.6 million, an increase of more than 203.6 percent over the prior year.

The Company's hotels generated $9.2 million of hotel EBITDA in the quarter compared with $7.0 million during the comparable period in 2004. Second quarter hotel EBITDA margins improved 430 basis points from the comparable period in 2004 to 35.1 percent. The hotel EBITDA margin improvement was largely due to the 15.7 percent portfolio RevPAR gain and a 15.6 percent growth in food and beverage revenue combined with stringent expense containment.

Mr. Blackham added, "We are delighted with the hotel operating margin expansion in the quarter. Despite continued increases in wage costs, health benefits and energy expenses, our hotel managers were able to produce significant margin improvements. Rooms and food and beverage departmental expenses were very well contained. In addition, the portfolio experienced a reduction in property insurance costs, property taxes and management fees versus the prior year period."