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Ed Scheetz, President and Chief Executive Officer of Morgans Hotel Group Resigns;
Fred J. Kleisner Named Interim President and CEO

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NEW YORK - September 20, 2007- The Board of Directors of Morgans Hotel Group Co. (NASDAQ: MHGC) (“MHG”) today announced that W. Edward Scheetz has resigned by mutual agreement with the Company as President and Chief Executive Officer and as a director of the Company in order to permit him to address personal issues. The Company also announced today that Fred J. Kleisner, a director of the Company, has been named as interim President and Chief Executive Officer, effective immediately. 

The Company has retained Spencer Stuart to assist the Board in its search for a permanent chief executive officer. Mr. Scheetz has agreed to make himself available to assist the Company in the transition following his resignation. 

“We are extremely fortunate to have someone of Fred’s caliber taking over as interim CEO,” said David T. Hamamoto, Chairman of Morgans Hotel Group. “Fred has already been the CEO of a publicly traded hotel company, and as a director of MHG, he knows our business strategy and operations well and has a detailed understanding of the Company’s strengths and future direction. Over the course of Fred’s career, he has accumulated a depth of experience in the hotel and leisure industry as well as substantial expertise in the boutique hotel sector.” 

Mr. Kleisner said, “I look forward to working with the MHG Board and management team as we continue to build on the success of our strategy.” 

Mr. Hamamoto added, “The Board would like to acknowledge the contributions of Ed Scheetz and extends its gratitude for the progress MHG made during his tenure.” 

Mr. Kleisner served as the Chief Executive Officer of Wyndham International from 2000 to 2005. He was also named Chairman of the Board of Directors in October of that year. He previously served as President and Chief Operating Officer of The Americas for Starwood Hotels & Resorts Worldwide, Inc. His more than 40 years of experience in the industry also includes senior positions with Westin Hotels and Resorts, where he was President and Chief Operating Officer from 1995 to 1998; Interstate Hotels Company, where he was Executive Vice President and Group President of Operations from 1990 to 1995; The Sheraton Corporation, where he was Senior Vice President, Director of Operations, North America Division-East from 1985 to 1990; and Hilton Hotels, where for 16 years he served as General Manager of several landmark hotels, including The Waldorf=Astoria and The Waldorf Towers in New York, The Capital Hilton in Washington, D.C. and The Hilton Hawaiian Village in Honolulu. 

Mr. Scheetz has entered into a separation agreement and release with the Company pursuant to which he will retain his vested and unvested equity awards. No additional payment will be made in connection with the separation. 

Outlook 

The Company’s operational performance and financial condition remain strong. The Company reaffirms its guidance for the full year 2007, which was provided in its earnings release on August 2, 2007. 

About Morgans Hotel Group 

Morgans Hotel Group Co. (NASDAQ: MHGC), which is widely credited with establishing and developing the rapidly expanding boutique hotel sector, operates and owns, or has an ownership interest in, Morgans, Royalton and Hudson in New York, Delano and The Shore Club in Miami, Mondrian in Los Angeles and Scottsdale, Clift in San Francisco, and Sanderson and St Martins Lane in London. In February 2007, MHG and an equity partner acquired the Hard Rock Hotel & Casino in Las Vegas and related assets. MHG has other property transactions in various stages of completion including projects in Miami Beach, Florida, Chicago, Illinois, SoHo, New York and Las Vegas, Nevada, and continues to vigorously pursue its strategy of developing unique properties at various price points in international gateway cities and select resort destinations. 

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Contact:

Morgans Hotel Group
Jennifer Foley, 212-277-4166
www.morganshotelgroup.com

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Also See: Morgans Hotel Group Appoints Scott Williams as Chief Marketing Officer; Starwood Veteran to Lead Marketing and Branding at MHG / July 2007
Fred Kleisner's Desk is Looking Spare, As the Chairman CEO of Wyndham International Inc. Passes the Reins Over to New Owner, Blackstone Group / September 2005
Fred Kleisner Leaves Starwood; Joins Wyndham as President and COO / July 1999
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