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Red Lion Hotels Sells the 149-room Red Lion Colonial Hotel in
Helena, Montana to Helena Colonial L.L.C. for $5.6 Million

The Hotel will Maintain the Red Lion Brand


SPOKANE, Wash., July 26, 2012-- Red Lion Hotels Corporation (NYSE: RLH) announced today it has entered into an agreement to sell the Red Lion Colonial Hotel in Helena, Mont., to Helena Colonial L.L.C. The purchase price for the sale is $5.6 million and the close date is scheduled for July 31, 2012. The buyer has indicated that it intends after closing to enter into a franchise license agreement with Red Lion Hotels Franchising Inc. and maintain the Red Lion brand on the hotel.

"The sale of our hotel property in Helena fits with our strategy of selling certain non-core assets to pay down debt, invest in our brand and increase shareholder value," said Jon E. Eliassen, President and Chief Executive Officer of Red Lion Hotels Corporation. "The buyer has informed us that it intends to invest substantial additional capital in the property, and we anticipate that the hotel's enhanced appeal will be attractive to our Red Lion guests in Helena."

The 149-room Red Lion Colonial Hotel has 15,500 square feet of meeting space, the largest group space in the market, and underwent a major renovation in 2006. It is located approximately one mile from the Montana State Capitol building. Helena Colonial L.L.C. is using Stockman Bank, based in Montana, to finance the acquisition.

About Red Lion Hotels Corporation:
Red Lion Hotels Corporation is a hospitality and leisure company primarily engaged in the ownership, operation and franchising of midscale hotels under its Red Lion® brand. As of March 31, 2012, the RLH hotel network was comprised of 48 hotels located in nine states and one Canadian province, with 9,010 rooms and 452,387 square feet of meeting space.  The company also owns and operates an entertainment and event ticket distribution business. For more information, please visit the company's website at www.redlion.com.

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Contact: 

Pam Scott
Red Lion Hotels Corporation
509-777-6393 (d)
509-570-4610 (c)
Pam.Scott@redlion.com
www.RedLion.com


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