ATLANTA, Ga., January 4, 2004—Lodgian, Inc. (AMEX: LGN), one of the nation’s largest independent owners and operators of full-service hotels, today announced that it has sold two hotels as part of  the company’s previously announced plan to dispose of 19 non-strategic hotels from its hotel portfolio.  The hotels—the Holiday Inn in Memphis, Tenn., and the Holiday Inn in Florence, Ky.—were sold to undisclosed buyers for an aggregate of $3.7 million.  Including these two properties, Lodgian has sold 12 hotels since the program was announced in 2003.  The company has seven hotels and one parcel of land remaining in its disposition program.

“We continue to aggressively market the remaining hotels held for sale, but timing of the dispositions is difficult to predict with any accuracy,” said W. Thomas Parrington, Lodgian’s president and chief executive officer.  “Our goal is to complete the program during the first half of 2005, depending on a number of individual market factors.”

 Parrington noted that the company remains on track to complete its multi-year renovation program at its core properties by the end of the 2005 second quarter.  “We also are starting to ramp up our acquisition program on a selective basis as we move into the latter stages of our disposition program,” he said.

The Sold Hotels
The 173-room Holiday Inn in Memphis, Tenn., was sold on December 20, 2004 for $2.1 million, with the net proceeds of $2.0 million being used to reduce the company’s debt.  For the past 12 months, the hotel reported ($101,000) of EBITDA (a non-GAAP measure) and a net loss (a GAAP measure) of $521,000.

The 105-room Holiday Inn in Florence, Ky. was sold on December 13, 2004 for $1.6 million, and all of the net proceeds were used to reduce debt.  The hotel reported ($135,000) of EBITDA (a non-GAAP measure) and a net loss (a GAAP measure) of $466,000 for the trailing 12 months.

Below is a reconciliation of GAAP net loss with EBITDA:

To date, the company’s disposition program has produced the sale of the 12 hotels, two land parcels and an office building, which enabled the company to reduce its debt by $42 million. 

About Lodgian

Lodgian is one of the largest independent owners and operators of full-service hotels in the United States.  At the end of the 2004 third quarter adjusted for the sale of these two hotels, the company manages a portfolio of 85 hotels with 16,088 rooms located in 30 states and Canada.  Of the company’s 85-hotel portfolio, 72 are under the InterContinental Hotels Group (Crowne Plaza, Holiday Inn, Holiday Inn Select and Holiday Inn Express) and Marriott brands (Courtyard by Marriott, Fairfield Inn and Residence Inns), and 10 are affiliated with four other nationally recognized hospitality franchises.  Three hotels are independent, unbranded properties.  For more information about Lodgian, visit the company’s Web site: www.lodgian.com.

Forward-Looking Statements

This press release includes forward-looking statements related to Lodgian’s operations that are based on management’s current expectations,estimates and projections. These statements are not guarantees of future performance and actual results could differ materially. The words “may,”“should,” “expect,” “believe,” “anticipate,” “project,” “estimate,” “plan,” and similar expressions are intended to identify forward-looking statements. Certain factors are not within the company’s control and readers are cautioned not to put undue reliance on forward-looking statements. These statements involve risks and uncertainties including, but not limited to, the company’s ability to generate sufficient working capital from operations and other risks detailed from time to time in the company’s SEC reports. The company undertakes no obligations to update events to reflect changed assumptions, the occurrence of unanticipated events or changes to future results over time.