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 Recognizing Profitable Repositioning Opportunity Sunburst Hospitality
Acquires 110 room Quality Inn Resort in Ocean City, Maryland
for $18 million

Silver Spring, MD – February 12, 2007 – Sunburst Hospitality announced today that the firm acquired the beachfront Quality Inn Hotel and Resort located in Ocean City, Maryland, for $18 million. This significant hotel acquisition, transacted at an excellent discount to replacement cost, balances Sunburst’s intuitive repositioning strategy. Sunburst Hospitality is distinguished for their expertise in optimizing the value of hotel and resort properties.

Following the sale, Sunburst Hospitality will operate the hotel under the Quality Inn brand and evaluate the potential to rebrand the property as an upscale resort. Sunburst will execute a multi-million dollar renovation, which the company anticipates will add considerable value to the property.

“The Quality Inn, Ocean City, (Oceanfront at 33rd St) is an ideal value-added opportunity. The hotel’s premier location, combined with Sunburst’s expertise in optimizing intrinsic worth will significantly increase the hotel’s value,” commented Kevin Hanley, President of Sunburst Hospitality.

Foreseeing the tremendous market potential, Sunburst has targeted resort properties located throughout the Mid-Atlantic. Situated along an expansive beachfront, the Quality Inn Ocean City has several notable features which Sunburst plans to improve. Each of the hotel’s 110 rooms is a spacious suite which Sunburst considers essential to their plans to upgrade and rebrand the resort. Full-service resort activities would be supported by the hotel’s beachfront, pool areas, spa deck and opportunity to expand guest activities along the water. The hotel’s overall building construction is excellent providing Sunburst a solid structure upon which to execute the renovation. 

“Sunburst has the capacity to execute a distinctive upgrading of the hotel. This, combined with our operational acumen, will drive the resort into achieving its highest profit potential,” said Mr. Hanley.

“The Quality Inn, Ocean City, is an excellent example of our objective to maximize the value of our portfolio through opportunistic acquisitions,” continued Mr. Hanley. As we close on this property, we have several others in our sights.”

About Sunburst Hospitality

Sunburst Hospitality Corporation is a leading hotel owner and manager of nationally recognized hotels and operates a portfolio of more than 40 hotels in 16 states. Sunburst's hotels are branded as Comfort Inns and Suites, Best Western, Clarion Hotels, Holiday Inn Express, Quality Inn, and Sleep Inn. 

Sunburst is committed to developing and successfully implementing strategies to maximize the value of its operating hotels. James A. MacCutcheon, the company's CEO, has been with the company and its predecessor organizations since 1987. Mr. MacCutcheon and Sunburst’s President, Kevin Hanley, have a successful record of managing in advance of industry cycles.

Sunburst recognizes that its best investments are those that it makes in its people. The Company is a recognized industry leader in developing and implementing best practices in the human resources area. Innovative compensation and benefit programs are in place at all levels of the company. Sunburst remains committed to developing opportunities for the career advancement of its associates while maximizing the value of assets in its portfolio.

Contact:

Sharon Lemon
www.sunbursthospitality.com
651.324.8469

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Also See: Two and Half Mile Long Boardwalk in Ocean City, Maryland Keeps Visitors Coming Back / June 2004
Sunburst Hospitality Corporation Reports Significant Accomplishments in 2006 / December 2006

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