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  KSL Resorts Now Managing the Former Marriott Managed
Rancho Las Palmas Resort & Spa
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444 room Destination Resort Receiving $30 million in Improvements
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LA QUINTA, Calif. - -July 17, 2006 -- KSL Capital Partners, LLC (KSLCP) has announced that it has closed on its acquisition of the Rancho Las Palmas Resort & Spa from Strategic Hotels & Resorts, Inc. (NYSE:BEE). 

This acquisition marks the first investment for KSLCP's new private equity fund, and continues KSLCP's focus on resort-oriented travel and leisure assets. 

A former Marriott-managed hotel, the Rancho Las Palmas Resort & Spa is a 444-room destination hotel with an adjacent 27-hole golf course and world-class spa. Located in the heart of Rancho Mirage, Calif., the resort draws regional, national and international visitors. 

KSLCP plans a $30 million renovation and upgrade to the existing resort over the first 24 months following the acquisition. Improvements to the resort will begin immediately and will expand and improve the quality of guest facilities throughout the resort, including a comprehensive hotel room renovation, new retail and restaurant venues, an expanded pool and water feature complex, and improvements to the club and golf facilities. Given the resort's large campus and unique guest room layout, the resort will remain open throughout the renovation. 
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As of July 15, 2006 the Rancho Las Palmas Resort will no longer be managed by Marriott International and will no longer be affiliated with the Marriott Hotels and Resorts Brand. The hotel will be managed by KSL Resorts and operated as an independent hotel. Marriott Reward certificates will not be accepted as payment for room/tax after this date, nor will the Marriott Miles be issued for stays after this date. Existing rates and reservations will be honored.

A History of Rancho Las Palmas

In 1876, Southern Pacific Railroad cut a track through the San Gorgonio Pass to Los Angeles, paving the way for settlement in the Palm Springs desert. Word spread quickly of the region’s healthy climate and the healing powers of its hot springs.

It would be another 70 years before Los Angeles architect H.L. “Hank” Gogerty purchased 320 acres of unimproved land and graded an airstrip to accommodate private planes. Visitors flying in would lodge in surplus army barracks brought in from Beaumont and dine in an old cottage converted into a dining room. This cottage eventually became the base for the Rancho Las Palmas Country Club. A bar and swimming pool were added in 1950, and one year later the property formally opened as the Desert Air Hotel.

Hollywood stars and heads of state, including President Eisenhower and later Presidents Nixon, Ford and Reagan, began flocking to the desert resort, many arriving in their own private planes. Bob Hope, Frank Sinatra and President Ford were among the notables so taken by the climate that they eventually settled here.

In 1973, Rancho Mirage was incorporated, becoming the 16th city in Riverside County. Development quickly flourished.

A 1976 groundbreaking for the Rancho Las Palmas Country Club was followed one year later by groundbreaking on the Rancho Las Palmas resort and its grand opening under the Marriott Corporation in February 1979. While celebrities such as Cary Grant, Roy Rogers and Dale Evans looked on, guest of honor Bob Hope opened the festivities by hitting a golf shot through a ribbon which burst into flames, leading to fireworks and an exultant release of balloons.

Rancho Las Palmas was the first desert resort to remain open year-round, and it established immediate appeal as a getaway of choice for celebrities.

In 1999, the resort unveiled a 20,000-square-foot, European-style spa as part of a $32- million refurbishment. In 2006, the former Marriott resort was acquired by KSL Resorts, whose renovation plans will burnish the original glamour of Rancho Las Palmas while creating a world-class desert resort for the 21st century.

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KSLCP will retain KSL Resorts, an independent resort management company, to manage the property. Current properties managed by KSL Resorts include the historic Hotel del Coronado in San Diego, Calif. and renowned La Costa Resort and Spa in Carlsbad, Calif. KSL Resorts has previously owned and operated some of the most famous resorts in the world, including the Arizona Biltmore Resort & Spa, Doral Resort & Spa, Grand Wailea Resort Hotel & Spa and La Quinta Resort and Club. 

About KSL Capital Partners, LLC 
KSL Capital Partners, LLC is a private equity fund specializing in travel and leisure businesses. For further information, please visit the company's website at www.kslcapital.com

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Contact:

Kate Wark
212-284-9938
kwark@mg-pr.com

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Also See: KSL Capital Partners to Acquire the Marriott Rancho Las Palmas Resort & Spa from Strategic Hotels & Resorts, Inc. for $56.0 million; Plans a $30 million Renovation / May 2006
Strategic Hotels & Resorts Inc. Reaches Agreement to Pay Up to $10.4 million for Termination Fees and Related Severance Cost to Terminate Marriott's Management Contract at the Marriott Rancho Las Palmas Resort in Rancho Mirage, California / April 2006

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