"Building the best management team and organization in the industry is our top priority. The new team and structure give us both the leadership strength as well as the functional alignment we need to achieve our aggressive business objectives," stated L. Steven Miller.

The Company is now organized under the following six integrated business units, with the heads of each area reporting directly to Mr. Miller: Sales; Marketing; Owner Services; Finance and Administration; Legal; and Sunterra Europe. As a result of the new alignment, two significant management changes were made to better utilize the talents of Jim Noyes and Charles Frey, both of whom will assume new responsibilities.

The Sales business unit is under the direction of Jim Noyes, Executive Vice-President-Sales, a key contributor to the Company's dramatic growth. Mr. Noyes will focus on the development and operation of a fully integrated global sales system designed to maximize the demand for the Company's resorts. In 1999, the Company's major initiative in the sales business unit is ensuring the success of Club Sunterra, its points-based vacation ownership system. Sunterra will not name a replacement to fill Mr. Noyes' previously held position of Chief Operating Officer.

Mr. Charles Frey, Senior Vice President, is responsible for the direction of the Owner Services business unit, which comprises all service functions related to owners, guests and visitors. These functions include hospitality management and call center operations (reservation, travel and membership services), as well as construction for both newly acquired and existing resorts. Additionally, this unit will manage all company-wide central services.

Mr. Frey was previously Senior Vice President responsible for accounting and administrative functions throughout the organization.

The Finance and Administration business unit comprises all finance, treasury, accounting, investor relations, as well as human resources functions, information technology, risk management and acquisition and development. This business unit is directed by Richard Goodman, newly appointed Executive Vice President and Chief Financial Officer.

The growing presence of Sunterra's worldwide operations created demand for a centralized legal oversight and regulatory function which is led by Thomas Bell, Senior Vice President and General Counsel. The Legal business unit manages all legal affairs on a company-wide basis, including shareholder matters, federal filings, legislative development, other legal matters and governmental agency relations.

The Sunterra Europe business unit, under the direction of Richard Harrington, Managing Director-Sunterra Europe, manages all European operations, which Mr. Harrington has guided into the market leading position. Under the leadership of a senior executive to be appointed in the near future, the Marketing business unit is responsible for the development and commercialization of the Company's products, markets and the awareness of its brand. The Company is currently evaluating candidates to head the Marketing business unit.

As indicated above, Sunterra also announced today that in the fourth quarter of 1998 it will record after-tax charges of $3.1 million related to the consolidation of corporate offices in Orlando and to the write-down of certain partnership interests. In conjunction with the corporate realignment and the previously announced consolidation of all corporate functions to its Orlando headquarters, Sunterra is closing regional offices in Chicago, Ill., and San Mateo and Los Angeles, Calif. -- and will incur severance and other office-closing costs.

In addition, as a result of the AICPA's Statement of Position 98-5 (SOP 98-5) "Reporting on the Costs of Start-Up Activities," Sunterra will incur a $1.5 million cumulative adjustment, net of taxes, for the period ending December 31, 1998. Sunterra has elected early adoption of SOP 98-5, which then requires both the write-off of all previously capitalized start-up costs as of January 1, 1998, and also the expensing of all costs of start-up activities as incurred, effective January 1, 1998. The charge will be reflected on Sunterra's income statement as a cumulative change in accounting principle, net of taxes.

About Sunterra Corporation

Sunterra Corporation is the world's largest vacation ownership company, with 87 resort locations around the world and more than 210,000 owner families.  Through its Marc Hotels  Resorts subsidiary, Sunterra also manages units at resorts in Hawaii.

This release contains forward-looking statements, which include Sunterra's future prospects and other forecasts and statements of expectations. Actual results might differ materially from those expressed in any forward looking statements made by Sunterra due to, among other things, factors related to the timing and terms of future mortgages receivable financings and sales and those factors identified in Sunterra's filings with the Securities and Exchange Commission, including those set forth in Items 1 and 2 of Sunterra's Annual Report on Form 10-K for the year ended December 31, 1997.