The Island Colony Hotel is located steps away from the center of Waikiki�s world-renowned shopping, entertainment and dining experiences, as well as world famous Waikiki beach. The property offers all of the amenities that make it a popular destination of leisure travelers around the world, including a pool, spa, sauna, restaurant and activities center.

�We are pleased to continue the growth of our Marc Resorts subsidiary and the expansion of our property management and rental business. We are excited about the growing opportunities we have in this segment. Our continued focus on increasing the scope of our property management and rental business also simultaneously adds incremental value to our core vacation ownership sales business,� stated L. Steven Miller, president and chief executive officer of Sunterra Corporation.

Michael V. Paulin, president of Marc Resorts and senior vice president of Sunterra Corporation, commented, �This contract represents a strong endorsement of Sunterra�s ability to effectively and profitably manage vacation ownership and other resorts and hotels as well as signifying Marc�s increasing prominence in the resort management industry.�

Sunterra Corporation is the largest international owner and manager of vacation ownership resorts, with 89 resort locations around the world and more than 250,000 owner families. 

Through its Marc Hotels Resorts subsidiary, Sunterra also manages 21 resorts in Hawaii. The Company�s operations consist of (i) marketing and selling vacation interests, (ii) developing, acquiring and operating vacation ownership resorts, (iii) financing customers� purchases and (iv) providing resort rental, management and maintenance services.  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 Parts 1 and 2 of Sunterra�s Annual Report on Form 10-K for the year ended December 31, 1998, and current reports of Form 8-K.