Equity Inns Expects First Quarter and Full Year 2007 Funds from Operations to Exceed Expectations

Business Wire, March 29, 2007

- First Quarter FFO per Share Expected to be in the Range of $0.36 to $0.37 -

- Updates Full Year 2007 FFO -

- Better Than Expected Operations Drives Improved Cash Flow -

GERMANTOWN, Tenn. -- Equity Inns, Inc. (NYSE: ENN), the third largest hotel real estate investment trust (REIT), today announced that the Company expects funds from operations (FFO) for the first quarter 2007 to be in the range of $0.36 to $0.37 per diluted share versus previous expectations of $0.31 to $0.33 per diluted share. The Company expects net income applicable to common shareholders for the first quarter 2007 to be in the range of $0.07 to $0.09 per diluted share. The better than expected performance is primarily due to the Company achieving higher than anticipated results from hotel operations due to higher average daily rate.

The Company is increasing its full year 2007 FFO guidance to a range of $1.45 to $1.52 per share from its initial range of $1.40 to $1.48 per share. In addition, Equity Inns is raising its 2007 full year net income per diluted share to $0.30 to $0.38 from its previous per share range of $0.25 to $0.33.

Howard Silver, President and Chief Executive Officer commented, "As we communicated earlier this year, we anticipated that normalized results for the first quarter of 2007 would be difficult to predict because of the unusual positive impact that unexpected hurricane business had on the Company's financial performance in the first quarter of 2006. Our expectations proved to be conservative, resulting in better than expected gross operating margins during the first quarter of 2007."

The Company anticipates providing a full report of its first quarter 2007 earnings on May 7, 2007.

Forward Looking Statements

Certain matters discussed in this press release which are not historical facts are "forward-looking statements" within the meaning of the federal securities laws and involve risks and uncertainties. The words "may," "plan," "project," "anticipate," "believe," "estimate," "forecast, "expect," "intend," "will," and similar terms are intended to identify forward-looking statements, which include, without limitation, statements concerning our outlook for the hotel industry, acquisition and disposition plans for our hotels and assumptions and forecasts of future results for fiscal year 2007. Forward-looking statements are not guarantees of future performance and involve numerous risks and uncertainties which may cause our actual financial condition, results of operations and performance to be materially different from the results of expectations expressed or implied by such statements. General economic conditions, future acts of terrorism or war, risks associated with the hotel and hospitality business, the availability of capital, risks associated with our debt financing, hotel operating risks and numerous other factors, may affect our future results and performance and achievements. These risks and uncertainties are described in greater detail in Item 1.A. of our 2006 Annual Report on Form 10-K filed on February 28th, 2007, and our other periodic filings with the United States Securities and Exchange Commission (SEC). We undertake no obligation and do not intend to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Although we believe our current expectations to be based upon reasonable assumptions, we can give no assurance that our expectations will be attained or that actual results will not differ materially.

Notes to Financial Information

The Company operates as a self-managed and self-administered real estate investment trust, or REIT. Readers are encouraged to find further detail regarding Equity Inns' organizational structure in its annual report on Form 10-K for the year ended December 31, 2006 as filed with the SEC.

Non-GAAP Financial Measures

Included in this press release are certain "non-GAAP financial measures," which are measures of the Company's historical or future financial performance that are different from measures calculated and presented in accordance with generally accepted accounting principles, or GAAP, within the meaning of applicable SEC rules. These include: (i) Funds From Operations, (ii) Adjusted Funds From Operations and (iii) Adjusted EBITDA. The following discussion defines these terms, which the Company believes can be useful measures of its performance.

Funds from Operations

The National Association of Real Estate Investment Trusts, or NAREIT, defines funds from operations, or FFO, as net income (loss) applicable to common shareholders, excluding gains (or losses) from sales of real estate, the cumulative effect of changes in accounting principles, real estate-related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. FFO does not include the cost of capital improvements or any related capitalized interest.

Equity Inns uses FFO per diluted share as a measure of performance to adjust for certain non-cash expenses such as depreciation and amortization because historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Because real estate values have historically risen or fallen with market conditions, many industry investors have considered presentation of operating results for real estate companies that use historical cost accounting to be less informative. NAREIT adopted the definition of FFO in order to promote an industry-wide standard measure of REIT operating performance. Accordingly, as a member of NAREIT, Equity Inns adopted FFO as a measure to evaluate performance and facilitate comparisons between the Company and other REITs, although FFO and FFO per diluted share may not be comparable to those measures, or similarly titled measures, as reported by other companies. Additionally, FFO is used by management in the annual budget process.