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Morgans Hotel Group Enters Mangement Agreement for New Build Mondrian
Brand to be Located in the Old City of Istanbul, Turkey

Will Also Have Ownership Interest of 20% Through $10 million Equity Contribution


NEW YORK, Dec. 20, 2011-- Morgans Hotel Group Co. (NASDAQ: MHGC) ("Morgans" or the "Company") today announced that it has entered into a hotel management agreement for an approximately 128-room Mondrian-branded hotel to be located in the Old City area of Istanbul, Turkey. This hotel is expected to be the seventh Mondrian hotel in the expansion of the Company's iconic brand.

Upon completion and opening of the hotel, Morgans will operate the hotel pursuant to a 20-year management agreement, with a 10-year extension option. The hotel is scheduled to open in 2014.

"We are very excited to announce the development of Mondrian Istanbul, our fourth management contract for a Mondrian-branded hotel in an international location that we have announced this year," said Michael Gross, Chief Executive Officer of Morgans Hotel Group. "As an important gateway city, Istanbul serves as a bridge between Asia and Europe, where we will provide our guests with an exciting lifestyle hotel experience that only Morgans can provide, while generating an attractive return for the Company. We are looking forward to a long and successful relationship with the property's owner, Bella Group."

The future hotel will be located in an area referred to as the Old City of Istanbul, which is the oldest part of Istanbul, and the location of most of its historical attractions, such as the Topkapi Palace, the Hagia Sophia, the Sultanahmet Mosque, or Blue Mosque, the Grand Bazaar, the 1,500 year-old Basilica Cistern and numerous other attractions and local restaurants. The hotel is expected to include a 128-room Mondrian hotel, original food and beverage options conceived by The Light Group, function space, a spa, renovated from an existing historic Turkish bath, and additional facilities and amenities indicative of a lifestyle hotel. Morgans will contribute approximately $10 million in the form of equity and key money and will have a 20% ownership interest in the venture owning the hotel.

Already this year the Company announced it has entered into hotel management agreements for Mondrian-branded hotels located in Doha in Qatar, Nassau in The Bahamas, and London in the U.K.

About Morgans Hotel Group
Morgans Hotel Group Co. (NASDAQ: MHGC) is widely credited as the creator of the first "boutique" hotel and a continuing leader of the hotel industry's boutique sector. Morgans Hotel Group operates Morgans, Royalton and Hudson in New York, Delano and Shore Club in South Beach, Mondrian in Los Angeles, South Beach and New York, Clift in San Francisco, Ames in Boston, Sanderson and St Martins Lane in London, and a hotel in Playa del Carmen, Mexico. Morgans also owns, or has ownership interests in, several of these hotels. Morgans Hotel Group has other property transactions in various stages of completion including a Delano in Cabo San Lucas, Mexico, a Delano in Turkey, a Mondrian in Doha, Qatar, a Mondrian in Nassau, The Bahamas, a Mondrian in London, and a hotel in New York to be branded with one of MHG's existing brands. Morgans also owns a 90% controlling interest in The Light Group, a leading lifestyle food and beverage company. For more information please visit www.morganshotelgroup.com.

Forward-Looking and Cautionary Statements
This press release may contain certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to, among other things, the operating performance of our investments and financing needs and prediction of certain future other events. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "may," "expect," "anticipate," "estimate" "believe," "project," or other similar words or expressions. These forward-looking statements reflect our current views about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause our actual results or other future events to differ materially from those expressed in any forward-looking statement. Important risks and factors that could cause our actual results to differ materially from those expressed in any forward-looking statements include, but are not limited to economic, business, competitive market and regulatory conditions such as: a sustained downturn in economic and market conditions, particularly levels of spending in the business, travel and leisure industries; continued tightness in the global credit markets; general volatility of the capital markets and our ability to access the capital markets; our ability to refinance our current outstanding debt and to repay outstanding debt as such debt matures; our ability to protect the value of our name, image and brands and our intellectual property; risks related to natural disasters, such as earthquakes, volcanoes and hurricanes; hostilities, including future terrorist attacks, or fear of hostilities that affect travel; and other risk factors discussed in Morgans' Annual Report on Form 10-K for the fiscal year ended December 31, 2010, and other documents filed by Morgans with the Securities and Exchange Commission from time to time. All forward-looking statements in this press release are made as of the date hereof, based upon information known to management as of the date hereof, and Morgans assumes no obligations to update or revise any of its forward-looking statements even if experience or future changes show that indicated results or events will not be realized.
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Contact:


Morgans Hotel Group
Web Site: http://www.morganshotelgroup.com


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Also See: Morgans Hotel Group to Manage the First Mondrian Hotel in Europe, the 360-Room Hotel to Open at Sea Containers on London's River Thames / December 2011

Morgans Hotel Group Closes on Purchase of The Light Group Positioning Company to Increase Food & Beverage Revenues / December 2011

Morgans Hotel Group Enters Definitive Agreement to Sell the Sanderson and St Martins Lane Hotels in London for Approximately $295 million to Capital Hill Hotels Limited; MHG Will Continue to Operate Hotels Under Long-term Management Agreements / October 2011

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Baha Mar Signs Management Agreements with Hyatt Hotels, Morgans Hotel Group and Rosewood Hotels and Resorts to Build Next Generation Destination Resort; The 1,000-acre, $3.4 Billion Resort, Gaming and Entertainment Complex is Projected to Create 12,000 New Jobs and Contribute Nearly $1 Billion to the Economy in Nassau, The Bahamas / August 2011

Morgans Hotel Group to Keep the Delano Hotel in South Beach, Florida in Portfolio: Planning $5 million in Upgrades to Property / August 2011

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Morgans Hotel Group Reaches Settlement Agreement with Lenders on Joint Venture with Hard Rock; Equity Interests in the Hard Rock Hotel & Casino in Las Vegas Have Been Transferred and Management Agreement has Been Terminated / March 2011

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Baha Mar, Created by Sarkis Izmirlian, Attracts Joint Venture Partners; Harrah's Will Operate 1,000-room Caesars Resort Hotel and Casino, Starwood Will Operate a 300-room W, a 300-room St. Regis, a 700-room Westin,  and a 700-room Sheraton / November 2005



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