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Strategic Hotel Capital Begins Significant Repair
Work on the Hyatt Regency New Orleans

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CHICAGO, Oct. 12, 2005 - Strategic Hotel Capital, Inc. (NYSE: SLH) today announced that given the preliminary discussions and progress with its insurance brokers and insurers' representatives, management anticipates that its casualty and business interruption insurance will cover the majority of the damage and lost business to the hotel.

Significant repair work was begun in the last two weeks, including the installation of over 700 temporary windows to prevent further water damage. The roof has been temporarily patched, the atrium windows repaired, and debris is being removed from all the public spaces. Approximately a half-dozen engineering and construction teams are still in the process of completely assessing the damage.

The property is insured for both damage and business interruption to a total limit of $350 million, with a deductible estimated to be approximately $11 million. Additionally, the business interruption insurance covers the actual loss sustained during the period of restoration, as well as a 12-month ramp-up period thereafter.

Commenting on the existing renaissance opportunity, Laurence Geller, chief executive officer of Strategic Hotel Capital stated, "The employees of the Hyatt Regency New Orleans did simply an outstanding job at providing extraordinary service under the worst possible circumstances. In rebuilding and reinstating our hotel, we will provide that same dedication and are working with state and local government officials to create a public-private partnership that will result in a more vibrant Hyatt-Superdome district than existed prior to this tragedy. Tourism is the engine that drives this New Orleans economy, with over 10 million visits annually generating $156 million in state tax revenues, for an overall economic impact of $5 billion. New Orleans is one of the crown jewels of America, and the Hyatt Regency, as one of the largest rooms and meeting space providers, will once again play a major role in the rebirth and growth of one of the country's premier destinations."

The company has begun discussions with architects, interior planners and consultants on the renovation plans, and management anticipates being able to provide further updates on these plans, as well as the impact to earnings during the upcoming third quarter conference call.

During and subsequent to the hurricane, the hotel accommodated and fed more than 3,800 people, including guests, hotel employees and their families, the mayor and city workers, emergency workers and members of the media. The hotel is currently secured by a reduced workforce. Strategic Hotel Capital, in conjunction with the Global Hyatt Corporation, has established a Worldwide Hyatt Relief fund for employees and funded a significant initial corporate donation.

Strategic Hotel Capital, Inc. is a real estate investment trust, which owns and asset manages high-end hotels and resorts. The company has ownership interests in 17 properties with an aggregate of 7,934 rooms. 

This press release contains forward-looking statements about Strategic Hotel Capital, Inc. (the "Company"). Except for historical information, the matters discussed in this press release are forward-looking statements subject to certain risks and uncertainties. Actual results could differ materially from the Company's projections or expectations. 

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Contact:

Strategic Hotel Capital, Inc.
http://www.shci.com

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Also See: Strategic Hotel Capital Estimates Hyatt Regency New Orleans Losses Due to Storm Damage and Lost Business Could Exceed $100 million; Discussing Public/private Partnership for the Renovation of the Hotel and its Immediate Neighborhood / October 2005
Strategic Hotel Capital, Inc. Reports Fourth Quarter Net Loss of $9.4 million; RevPAR Up 5.8% at 11 North American Hotels / Hotel Operating Statistics / March 2005


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